City of Lancaster v. Pennsylvania Public Utility Commission, 022120 PACCA, 251 M.D. 2019

Docket Nº:251 M.D. 2019
Opinion Judge:PATRICIA A. MCCULLOUGH, JUDGE
Party Name:City of Lancaster, Borough of Carlisle, and Borough of Columbia, Petitioners v. Pennsylvania Public Utility Commission, Respondent
Judge Panel:BEFORE: HONORABLE PATRICIA A. McCULLOUGH, MICHAEL H. WOJCIK, BONNIE BRIGANCE LEADBETTER, Senior Judge
Case Date:February 21, 2020
Court:Commonwealth Court of Pennsylvania
 
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City of Lancaster, Borough of Carlisle, and Borough of Columbia, Petitioners

v.

Pennsylvania Public Utility Commission, Respondent

No. 251 M.D. 2019

Commonwealth Court of Pennsylvania

February 21, 2020

OPINION NOT REPORTED

Argued: December 12, 2019

BEFORE: HONORABLE PATRICIA A. McCULLOUGH, MICHAEL H. WOJCIK, BONNIE BRIGANCE LEADBETTER, Senior Judge

MEMORANDUM OPINION

PATRICIA A. MCCULLOUGH, JUDGE

Before this Court in our original jurisdiction are the preliminary objections (POs) of the Pennsylvania Public Utility Commission (PUC or Commission) to the petition for review (PFR) filed by the City of Lancaster, Borough of Carlisle, and Borough of Columbia (collectively, Municipalities). For the reasons that follow, we sustain the POs in part and overrule them in part and, in so determining, dismiss Count I with prejudice and permit Count II to proceed.

Background

On April 29, 2019, the Municipalities filed a PFR in the nature of a complaint seeking relief under the Declaratory Judgments Act1 and averred as follows.

The Municipalities have each created Historic Districts pursuant to what is commonly known as the Historic District Act (Act).2 Through the enactment of ordinances, the Municipalities have established rules and regulations applicable in their Historic Districts (Historic District Ordinances). (PFR, ¶¶8-14.) 15. The Municipalities, including properties located in the Historic Districts, are served by a natural gas distribution company [NGDC], operating pursuant to the rules and regulations of the PUC.

16. Section 59.18 of the PUC's regulations, 52 Pa. Code §59.18 [52 Pa. Code §59.18 or Section 59.18] contains the PUC's regulations for gas meter, regulator, and service line location.

17. On May 22, 2014, the PUC adopted a final rulemaking order amending 52 Pa. Code §59.18 (the "Final Rulemaking Order").

18. Prior to its amendment by the Final Rulemaking Order, Section 59.18 permitted meters to be located: "[i]nside the building, preferably in a dry, well-ventilated place not subject to excessive heat, and as near as possible to the point of entrance of the pipe supplying service to the building."

19. In its Final Rulemaking Order, the PUC amended Section 59.18 to require: "[u]nless otherwise allowed or required in this section, meters and regulators must be located outside and aboveground." 52 Pa. Code §59.18(a)(1).

20. Section 59.18(d) permits utilities to locate meters in the interior of buildings under certain limited circumstances . . . .3

21. The [NGDC] serving the Municipalities has commenced, in all three municipalities, a meter relocation program pursuant to [52 Pa. Code §59.18].

22. The [NGDC] serving the Municipalities has relocated meters from the interior of buildings to the exterior of buildings in the Historic Districts of all three municipalities.

23. Under [52 Pa. Code §59.18], the PUC is vested with absolute discretion in the [NGDC], allowing the [NGDC] to perform its meter relocations without complying with the Historic District Ordinances and with no regard for the effect on the Historic Districts.

43. In applying Section 59.18 within the territorial limits of the Municipalities, the PUC has required utilities to locate meters in exterior locations in the Historic Districts without consideration of the Historic District Ordinances.

44. The [NGDC] serving the Municipalities has relocated meters to exterior locations in the Historic Districts without consideration for the Historic District Ordinances or the effect on the Historic Districts.

(PFR, ¶¶15-23, 43-44.)

In Count I, the Municipalities allege that 52 Pa. Code §59.18 contravenes article I, section 27 of the Pennsylvania Constitution, Pa. Const. art. I, §27, known as the Environmental Rights Amendment (ERA).[4] The Municipalities aver that 52 Pa. Code §59.18 "fails to protect the historic resources of the Commonwealth," (PFR, ¶41), in the following particulars: a. Making interior location of meters in historic districts the exception, rather than the rule.

b. Failing to set standards a utility must follow when installing a meter in a historic district, to protect historic resources.

c. Leaving ultimate determination of the location of meters in historic districts at the sole discretion of the public utility.

d. Purporting to exempt public utilities from local historic district requirements.

e. Failing to require public utilities to comply with local historic district permitting requirements.

f. Failing to define the "consideration" required of public utilities when locating meters in historic districts.

g. The word "only" in the introductory sentence to Section 59.18(d)(1) suggests that whether or not a utility need even consider indoor meter location in historic districts is entirely at its discretion . . . .

h. The word "only" in the foregoing sentence discourages indoor meter location in historic districts.

(PFR, ¶41(a)-(h).) For relief, the Municipalities request an order declaring 52 Pa. Code §59.18 unconstitutional and decreeing "that the placement of meters shall be subject to any ordinance properly adopted by a Pennsylvania municipality pursuant to the [] Act." (PFR, Count I, Wherefore clause.)

In Count II, the Municipalities assert that 52 Pa. Code §59.18 constitutes an improper "sub-delegation" of legislative authority to private entities, i.e., NGDCs. According to the Municipalities, "the PUC has granted public utilities unfettered discretion to determine whether meters will be located on the interior or exterior of homes in historic districts within the territorial limits of the Municipalities" and, therefore, 52 Pa. Code §59.18 "is an invalid and unconstitutional sub[-]delegation of its statutorily-imposed obligation to make and enforce regulations not contrary to law." (PFR, ¶¶55, 57.) For relief, the Municipalities request an order declaring 52 Pa. Code §59.18 unconstitutional and decreeing "that the placement of meters shall be subject to any ordinance properly adopted by a Pennsylvania municipality pursuant to the [] Act." (PFR, Count II, Wherefore clause.)

On June 26, 2019, the PUC filed six POs. Initially, the PUC asserted a demurrer to Count I, contending that this cause of action, as pled, is legally insufficient and effectively foreclosed based upon preemption principles and our decision in UGI Utilities, Inc. v. City of Reading, 179 A.3d 624 (Pa. Cmwlth. 2017). The PUC further asserted that Counts I and II should be dismissed because the Municipalities failed to exhaust available administrative remedies and failed to join a necessary party, i.e., the NGDC that allegedly refused to locate gas meters inside certain buildings. In addition, the PUC contended that Counts I and II should be dismissed on the grounds that the Municipalities failed to aver facts sufficient to demonstrate that they sustained direct and immediate harm; the allegations are legally insufficient to justify pre-enforcement review of 52 Pa. Code §59.18; and the Municipalities are seeking an advisory opinion in that they have not alleged the existence of an actual case or controversy.

On August 9, 2019, the Municipalities filed an answer to the POs. Thereafter, the parties filed briefs in support of their respective positions. On December 12, 2019, this Court entertained oral argument on the POs. We now turn to the merits of those POs.

Discussion5

PO No. 1

In its first PO, the PUC contests the legal sufficiency of Count I, contending that the averments fail to state a claim upon which relief can be granted. The PUC asserts that in PPL Electric Utilities Corp. v. City of Lancaster, 214 A.3d 639 (Pa. 2019), our Supreme Court broadly held that the General Assembly intended its regulatory framework to occupy the entire area of utility regulation at the state level. Consequently, the PUC submits, as a matter of "field preemption," its regulations, including 52 Pa. Code §59.18, supersede any local regulation or ordinance that falls within the ambit of that field. From this premise, the PUC argues that "the Municipalities failed to reconcile that the [ERA] was [not] enacted until 1971 and that it is silent on the impacts of long-standing, pre[]existing law involving regulation of public utilities without expressly referring to the topic." (PUC's Br. at 12.) At its essence, the PUC maintains that the ERA does not apply to its regulations given the longstanding and broad nature of the grant of legislative authority that the General Assembly has bestowed upon it as a regulatory agency.

In addition, the PUC relies on our decision in City of Reading and reads that case as barring (or, at bare minimum, severely undermining) the Municipalities' claim that 52 Pa...

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