City of Lancaster v. Pa. Pub. Util. Comm'n

• Court: Pennsylvania Supreme Court
• Writing for the Court: JUSTICE BROBSON
• Citation: City of Lancaster v. Pa. Pub. Util. Comm'n, 313 A.3d 1020 (Pa. 2024)
• Docket Number: 107 MAP 2022
• Decision Date: 25 April 2024
• Parties: CITY OF LANCASTER, Borough of Carlisle, and Borough of Columbia, Appellees v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Appellant
• topic: Administrative Law,Public Sector Law,Utilities

313 A.3d 1020

CITY OF LANCASTER, Borough of Carlisle, and Borough of Columbia, Appellees

v.PENNSYLVANIA PUBLIC UTILITY COMMISSION, Appellant

No. 107 MAP 2022

Supreme Court of Pennsylvania.

Argued: November 29, 2023

Decided: April 25, 2024

West Codenotes

Negative Treatment Reconsidered

52 Pa. Code § 59.18

Prior Version Recognized as Unconstitutional

77 Pa. Stat. Ann. § 511.2(1)

Appeal from the Order of the Commonwealth Court at No. 251 MD 2019 dated October 11, 2022.

Kriss E. Brown, Esq., Joseph P. Cardinale Jr., Esq., James Anthony Mullins, Esq., David E. Screven, Esq., Pennsylvania Public Utility Commission, for Appellant Pennsylvania Public Utility Commission.

Michael Elmer Peters, Esq., John A. Van Luvanee, Esq., Eastburn and Gray, P.C., for Appellees City of Lancaster, Borough of Carlisle, and Borough of Columbia.

TODD, C.J., DONOHUE, DOUGHERTY, WECHT, MUNDY, BROBSON, JJ.

OPINION

JUSTICE BROBSON

In this direct appeal, the Pennsylvania Public Utility Commission (PUC) challenges a decision of the Commonwealth Court concluding that Section 59.18 of the PUC’s regulations, 52 Pa. Code § 59.18, violates Article II, Section 1 of the Pennsylvania Constitution and is, therefore, unenforceable.¹ Pertinently, the Commonwealth Court held that Section 59.18 unlawfully delegates unfettered authority to natural gas distribution companies (NGDCs) to determine the location of gas meters in historic districts of the Commonwealth. Upon careful review, we conclude that the General Assembly never enacted a statute vesting the PUC with any legislative authority under Article II, Section 1—i.e., imposing any duty on the PUC—to locate gas meters in historic districts that would give rise to any constitutional concerns regarding delegation. Accordingly, we reverse.

I. BACKGROUND

In 2014, the PUC amended Section 59.18 of its regulations, which, in part, addresses gas meters in historic districts. Section 59.18 provides, in pertinent part:

(a) General requirements for meter and regulator location.

(1) Unless otherwise allowed or required in this section, meters and regulators must be located outside and aboveground.

(2) Except in the case of an emergency, a utility shall provide written notice to a utility customer by first class mail or by personal delivery at least 30 days prior to relocating and subsequently installing a meter or regulator outside the customer’s building. …

….

(5) When selecting a meter or service regulator location, a utility shall consider potential damage by outside forces.

(6) The meter location must accommodate access for meter reading, inspection, repairs, testing, changing and operation of the gas shut-off valve.

(7) When feasible and practical to do so, the meter location must accommodate the installation of the service line in a straight line perpendicular to the main.

(8) Meters and service regulators may not be installed in the following locations:

(i) Beneath or in front of windows or other building openings that may directly obstruct emergency fire exits.

(ii) Under interior stairways.

(iii) Under exterior stairways, unless an alternate means of egress exists and the meter and service regulator are installed in a well-vented location under stairs constructed of noncombustible material.

(iv) A crawl space.

(v) Near building air intakes under local or State building codes.

(vi) In contact with soil or other potentially corrosive materials.

….

(d) Inside meter locations.

(1) Inside meter locations shall be considered only when:

(i) The service line pressure is less than 10 psig.

(ii) A meter is located in a building that meets one of the following criteria:

….

(D) A building is located within a locally designated historic district or is eligible for the listing, or a building is individually designated under a local ordinance as a. historic landmark or is eligible for the listing.

(iii) Protection from ambient temperatures is necessary to avoid meter freeze-ups.

(iv) A utility determines that a meter is subject to a high risk of vandalism based on the utility’s prior experience.

(v) A utility determines that an outside meter location is neither feasible nor practical.

(2) Except for low pressure systems with service line pressure less than 10 psig, regulators must be located outside when a meter is located inside.

(3) Installed inside meters must be attached to an operable outside shut[-]off valve.

(4) Meters installed within a building must be located in a ventilated place not less than 3 feet (914 millimeters)

from a source of ignition or source of heat which may damage the meter.

52 Pa. Code § 59.18 (emphasis added).

[1] The City of Lancaster, Borough of Carlisle, and Borough of Columbia (Municipalities) have historic districts created pursuant to what is commonly referred to as the Municipal Historic Districts Law (MHDL).² In 2019, the Municipalities filed a petition for review (Petition) in the Commonwealth Court’s original jurisdiction, seeking relief on two counts under the Declaratory Judgments Act³ concerning the validity of Section 59.18 of the PUC’s regulations. Relevant here, in Count II of the Petition, the Municipalities averred that Section 59.18 violates Article II, Section 1 of the Pennsylvania Constitution because "Section 59.18 cedes the PUC’s statutorily-granted authority to enact rules and regulations ‘not inconsistent with law’ [under Section 501(b) of the Pennsylvania Public Utility Code (Code),⁴ 66 Pa. C.S. § 501(b),] to" NGDCs and, therefore, grants NGDCs "unfettered discretion to determine whether meters will be located on the interior or exterior of homes in historic districts" in the Municipalities. (Petition ¶¶ 47-49, 55, 56 (quoting 66 Pa. C.S. § 501(b)).) Rather, the Municipalities insisted that Article II, Section 1 requires the General Assembly to make legislative choices and that the PUC, therefore, could not " ‘subdelegate’ its regulatory authority to an outside party without clear legislative intent permitting it to do so."⁵ (Id. ¶ 50, 54.) As to relief, the Municipalities asked the Commonwealth Court to declare that Section 59.18 is "unconstitutional, improper, and illegal" and to decree "that the placement of [gas] meters shall be subject to any ordinance properly adopted by a Pennsylvania municipality" pursuant to the MHDL. (Petition, Count II "Wherefore" clause, A-B.)

The PUC filed preliminary objections to the Petition. As to Count II, the PUC claimed that the Municipalities failed to exhaust administrative remedies and allege facts demonstrating direct and immediate harm to properties within their historic districts as a result of the amendments to Section 59.18 of the PUC’s regulations and that the Municipalities sought an advisory opinion without the existence of an actual case or controversy. A three-judge panel of the Commonwealth Court disagreed with the PUC’s averments as to Count II, overruled those preliminary objections, and directed the PUC to file an answer.⁶ See City of Lancaster v. Pa. Pub. Util. Comm’n (Pa. Cmwlth., No. 251 M.D. 2019, filed Feb. 21, 2020). The PUC filed an application for reconsideration of the Commonwealth Court’s decision, which the Commonwealth Court denied.

The Municipalities subsequently filed an application (Application) with the Commonwealth Court, seeking summary relief on their claim that the PUC unconstitu- tionally delegated unfettered legislative authority to NGDCs via Section 59.18 of the PUC’s regulations as to the location of gas meters in historic districts. More specifically, the Municipalities asserted that the PUC delegated legislative authority to NGDCs without adequate standards to: (1) guide NGDCs in determining where to place a meter at a property located in a historic district; and (2) prevent arbitrary NGDC decisions mandating meter relocations. (Application at 9-10; Municipalities’ Br. in Support of Application at 24, 27.) The Municipalities reiterated that, in the absence of those standards, Section 59.18 "delegates the PUC’s statutorily-granted authority to enact rules and regulations to private companies," and, as a result, violates Article II, Section 1 of the Pennsylvania Constitution. (Application at 9; Municipalities’ Br. in Support of Application at 13, 27.) The Municipalities further averred that the Code failed to provide an adequate review process of NGDCs’ meter placement decisions. (Application at 9-10; Municipalities’ Br. in Support of Application at 30-32.)

The PUC contended, in response to the Application that

Section 59.18 of the [PUC’s] regulations … does not vest absolute discretion in NGDCs with respect to the location of natural gas meters. Section 59.18 clearly states that a[ ] NGDC must consider the location of a natural gas meter inside a building in a historic district. If the NGDC determines that it cannot accommodate a natural gas meter inside the building, the aggrieved party can ultimately have the [PUC] review this determination pursuant to Section 701 of the [Code], 66 Pa. C.S. § 701,⁷ and Section 5.21 of … the [PUC]’s [r]egulations, 52 Pa. Code § 5.21.⁸

(PUC Br. in Opposition to Application at 17-18, 22.) The PUC also generally relied on Section 1501 of the Code, 66 Pa. C.S. § 1501, titled "Character of service and facilities," which provides, in relevant part:

Every public utility shall furnish and maintain adequate, efficient, safe, and reasonable service and facilities, and shall make all such repairs, changes, alterations, substitutions, extensions, and improvements in or to such service and facilities as shall be necessary or proper for the accommodation, convenience, and safety of its patrons, employees, and the public.

(Id. at 18.)

In a reported opinion, an en banc panel of the Commonwealth Court granted the Municipalities’ Application, finding the Municipalities’ claims persuasive that Section 59.18 of the PUC’s regulations unconstitu- tionally delegates legislative authority to NGDCs to determine the location of gas meters in historic districts. City of Lancaster v....