Jersey City Incinerator Authority v. Department of Public Utilities of N. J.

• Decision Date: 30 December 1976
• Citation: 146 N.J.Super. 243,369 A.2d 923
• Parties: JERSEY CITY INCINERATOR AUTHORITY and City of Jersey City, Appellants, v. DEPARTMENT OF PUBLIC UTILITIES OF NEW JERSEY and Board of Public Utilities Commissioners of New Jersey, Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 243

146 N.J.Super. 243

369 A.2d 923

JERSEY CITY INCINERATOR AUTHORITY and City of Jersey City, Appellants, v. DEPARTMENT OF PUBLIC UTILITIES OF NEW JERSEY and Board of Public Utilities Commissioners of New Jersey, Respondents.

Superior Court of New Jersey,

Appellate Division.

Argued Nov. 29, 1976.

Decided Dec. 30, 1976.

Lewis M. Holland, Jersey City, for appellant Jersey City Incinerator Authority (Chasan, Leyner, Holland & Tarrant, Jersey City, attorneys).

Michael F. Rehill, Oradell, for appellants City of Jersey City and City Council of Jersey City (Donald J. Williamson, P.A., Oradell, attorney).

Carla Vivian Bello, Deputy Atty. Gen., for respondent Bd. of Public Utility Com'rs (William F. Hyland, Atty. Gen., attorney; Stephen Skillman, Asst. Atty. Gen., of counsel).

Norman A. Doyle, Jr., Kearny, for respondent Town of Kearny.

Before Judges BISCHOFF, MORGAN and E. GAULKIN.

The opinion of the court was delivered by

BISCHOFF, J.A.D.

These consolidated appeals require a determination of whether the Board of Public Utilities Commissioners (PUC) has jurisdiction over a municipal incinerator authority so as to compel it to continue to operate its solid waste facility and incinerator until permission to discontinue its operation is granted by the PUC pursuant to N.J.S.A. 48:2--24.

The statutes are silent on this issue and, thus, the resolution of it must rest upon the result of our search for the often elusive 'legislative intent.'

The Jersey City Incinerator Authority (Authority) was created under he Incinerator Authority Law (N.J.S.A. 40:66A--1 Et seq.). The Authority constructed an incinerator plant in 1957 following a sale of bonds. The plant was thereafter operated, using Authority personnel and equipment, until October of 1967 when the Authority entered into a negotiated contract (I.e., without seeking competitive bids) with North Jersey Incinerator Company (North Jersey) for the operation of the plant. In accordance with the terms of the contract the Authority sold all of its trucks and equipment to North Jersey for $68,000. The operating personnel of the Authority were employed by North Jersey. While this contract was later invalidated because it was not awarded on the basis of competitive bids, the vehicles and equipment were never returned to the Authority.

After invalidation of the 1967 contract with North Jersey in January 1968, the Authority complied with statutory bidding requirements and awarded North Jersey a contract for operation of the incinerator plant. Since then the Authority's function has been limited to (1) financing and supervising performance of its contract with North Jersey for operation of the incinerator, and (2) supervising a contract with Hudson City Sanitation Company for scavenging in Jersey City. The annual budget of the Authority, which was $3,410,774 in 1971, is underwritten by the City of Jersey City.

The Solid Waste Utility Control Act of 1970 (N.J.S.A. 48:13A--1 Et seq.) charges PUC with 'the duty of setting and enforcing standards and rates for regulating economic aspects of solid waste collection, disposal and utilizaion services.' N.J.S.A. 48:13A--2.

For many years the incinerator had been operated in violation of state air pollution codes and, commencing in November 1970, in violation of many orders of the Department of Environmental Protection (DEP) to cease emitting smoke into the atmosphere. When the Authority failed to comply with these orders, DEP brought suit in 1972 against the Authority and North Jersey seeking to enjoin the air pollution at the incinerator plant.

The difficulties encountered in attempts to bring the plant into compliance with state and federal emission standards culminated in the city engaging consultants to analyze the incinerator and report on its potential for compliance with State pollution control codes. The consultants concluded that the plant could not be improved and operated in such a manner as to comply with anti-pollution codes.

On November 6, 1974 the Authority passed a resolution which preliminarily recited that:

(1) the incinerator plant is in serious violation of air pollution control codes and cannot be upgraded so as to conform to the codes;

(2) it was not economically or environmentally feasible to construct a new plant, and

(3) continued operation of the plant would be harmful to the atmosphere and constituted a serious hazard to the health of the surrounding area.

The resolution contained references to other factors not here germane and then resolved that:

(1) the executive director secretary of the Authority 'is directed to advise the collection contractor Hudson City Sanitation Company to collect, transport and deliver all solid waste collected from the City of Jersey City to the Municipal Sanitary Landfill in Kearny,' and

(2) the executive director of the Authority, 'upon the exercise of his discretion is directed to advise North Jersey Incinerator Company to stop the incineration of solid waste.'

Operation of the incinerator was terminated.

On November 12, 1974 PUC ordered the immediate reopening of the plant and directed both the Authority and North Jersey to show cause:

(1) why the order to operate the plant should not be made permanent;

(2) why they had not petitioned for permission to discontinue or curtail operation pursuant to N.J.S.A. 48:2--24 and N.J.A.C. 14:3--10.11 and

(3) why the matter should not be referred to the Attorney General for prosecution, leading to the imposiion of appropriate fines and penalties pursuant to N.J.S.A. 48:13A--12.

On November 18, 1974 the City of Jersey City (city), by resolution, adopted and ratified the action of the Authority and petitioned for leave to intervene before the PUC, which was granted. Following a hearing, PUC rendered a decision holding that both the Authority and North Jersey were public utilities within the scope of Title 48 and, as such, they could not discontinue service without prior PUC prmission and directed that:

(1) operation of the incinerator be resumed, and

(2) an appropriate petition for leave to discontinue operation be filed.

Both the Authority and the city filed separate notices of appeal.

On June 2, 1975 this court granted a stay of the order of PUC conditioned upon the Authority's filing a petition for leave to discontinue operation of the incinerator. Such a petition was filed and proceedings thereon were conducted simultaneously with the completion of the record and briefs on the appeals to this court.

We stayed the appeals pending completion of the hearing on the petition for discontinuance. At the termination of those proceedings PUC issued a decision and order, dated May 3, 1976, making the following findings:

1. The cost of re-opening and operating the incinerator now would be prohibitive.

2. Reasonable alternate service is presently available and, based upon the implementation of the Hackensack Meadowlands Commission's master plan, should remain available for the foreseeable future at reasonable cost.

3. The public interest does not now require the re-opening of this facility.

4. The Authority discontinued service at this incinerator on November 7, 1974 without petitioning for, or receiving the permission of this Board as required by law. N.J.S.A. 48:13A--1, etc., N.J.S.A. 48:2--24, and N.J.A.C. 14:3--10.11(b).

5. The Authority failed to re-open the incinerator facility notwithstanding the Board's Order of November 12, 1974 and notwithstanding the Board's Order of March 27, 1975. It also failed to avail itself of the option in the latter order of filing for discontinuance with the Board and therefore staying the implementation of the Order to re-open. After direction from the Appellate Division, Superior Court, some eight months after the unilateral closing, the Authority petitioned the Board for discontinuance of service.

6. The Council, by its resolution of November 18, 1974 adopted and ratified the Authority's action in closing the facility and refused to permit solid waste to continue to be incinerated at the ficility in violation of the Board's Order of November 12, 1974. N.J.S.A. 48:2--24.

The decision granted permission to discontinue the solid waste service at the incinerator and, further:

(I)n the event our exercise of jurisdiction herein is affirmed, the Board HEREBY ASSESSES a penalty of $1,000.00 against the Jersey City Incinerator Authority and a penalty of $2,500.00 against the City Council of Jersey City for the reasons expressed herein, for violation of N.J.S.A. 48:2--42 (48:2--24) for ordering, authorizing and requiring the discontinuance of utility service at the incinerator in question without prior Board approval * * *.

The city and the Authority appeal from the assessment of penalties and all appeals have now been consolidated.

The precise and rather narrow issue presented is whether the Authority, having been created pursuant to N.J.S.A. 40:66A--1, is subject to the jurisdiction of PUC so that it can be compelled to continue the operation of its incinerator.

The general grant of jurisdiction to PUC is contained in N.J.S.A. 48:2--13, which provides in pertinent part:

The board shall have general supervision and regulation of and jurisdiction and control over all public utilities as hereinafter in this section defined and their property, property rights, equipment, facilities and franchises so far as may be necessary for the purpose of carrying out the provisions of this Title.

The term 'public utility' shall include every individual, co-partnership, association, corporation, or joint stock company, their lessees, trustees or receivers appointed by any court whatsoever, their successors, heirs or assigns, that now or hereafter may own, operate, manage or control within this State any railroad, street railway, traction railway, autobus, charter bus operation, special bus operation, canal, express, subway, pipeline, gas, electric light, heat power, water, oil, sewer, solid...