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DEPARTMENT HIGHWAYS COMMONWEALTH v. PENNSYLVANIA PUBLIC UTILITY COMMISSION. (11/18/57)

November 18, 1957

DEPARTMENT OF HIGHWAYS OF COMMONWEALTH, APPELLANT,
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION.



Appeal, No. 4, March T., 1957, from order of Pennsylvania Public Utility Commission, February 14, 1956, No. 80979, in case of Department of Highways of Commonwealth of Pennsylvania v. Pennsylvania Public Utility Commission et al. Order affirmed.

COUNSEL

Joseph J. Laws, Special Counsel, with him John R. Rezzolla, Jr., Chief Counsel, Joseph L. Donnelly, Deputy Attorney General, and Thomas D. McBride, Attorney General, for Department of Highways, appellant.

Miles Warner, Assistant Counsel, with him Jack F. Aschinger, Assistant Counsel, and Thomas M. Kerrigan, Acting Counsel, for Public Utility Commission, appellee.

Walter T. Wardzinski, with him Thomas J. Munsch, Jr. and Henry G. Wasson, Jr., for Duquesne Light Company, intervening appellee.

David Dunlap, with him John T. Brown and H. Robert Barnes, for Equitable Gas Company, intervening appellee.

Before Rhodes, P.j., Hirt, Gunther, Wright, Woodside, Ervin, and Watkins, JJ.

Author: Woodside

[ 185 Pa. Super. Page 4]

OPINION BY WOODSIDE, J.

This is an appeal from an order of the Pennsylvania Public Utility Commission imposing upon the Pennsylvania Department of Highways a portion of the cost of relocating utilities ordered removed from a public highway by the commission in connection with a highway-railway crossing improvement.

The question is whether the commission has the power to impose upon the Commonwealth any of the cost of relocating the utilities which are within the right-of-way of a public highway.

The question is primarily one of statutory construction, but it also involves basic governmental considerations, and is important because the determination may ultimately involve millions of dollars.

The Department of Highways desired to relocate, widen and improve state highway routes 70 and 72 in Etna Borough, Sharpsburg Borough and Shaler Township, Allegheny County, and to construct a limited access highway across the tracks of The Baltimore & Ohio Railway Company within the limits of these municipalities. Because a crossing improvement was involved, the Department of Highways, in compliance with the Public Utility Law, petitioned the Pennsylvania Public Utility Commission for approval of its plans and asked the commission to allocate the costs.

[ 185 Pa. Super. Page 5]

After a hearing, the commission filed its order which contained 41 paragraphs dealing with numerous phases of the project and its cost. We are concerned here with paragraph 35 which ordered the Department of Highways to pay Duquesne Light Company and Equitable Gas Company 60% of the cost of relocating their facilities which were within the limits of existing highways. In paragraph 15 the commission ordered the public utility companies to remove and relocate these facilities. Commissioner Houck voted against the allocation of the cost of relocating these facilities "stating that he is of the opinion that where (public utility companies') facilities occupy public streets the cost of removal and reconstruction should be borne by the utilities."

The commission ordered Peoples Natural Gas Company and The Bell Telephone Company of Pennsylvania, "having so agreed", to relocate their facilities within the limits of any existing highways at their own cost and expense. It also ordered the Department of Highways, "having agreed to do so" to pay the cost of relocating the utilities owned and operated by the Borough of Etna, and to pay for property damages. Involved in these damages was the cost of the necessary removal and relocating of utilities not located on the highway right-of-way. The commission also ordered the Department of Highways to pay The Baltimore and Ohio Railroad Company a substantial part of the cost of relocating its tracks.

The Department of Highways appealed from the allocation of costs made in paragraph 35 of the commission's order. The Equitable Gas Company and Duquesne Light Company intervened as appellees and, along with the Pennsylvania Public Utility Commission, filed briefs and presented oral arguments.

[ 185 Pa. Super. Page 6]

It may be helpful to relate briefly the historical background of the locating and relocating of the facilities of public utility companies within highway rights-of-way.

It has long been the policy of this Commonwealth, and most other states, to permit public utility companies to place their facilities upon highway rights-of-way, so long as such facilities do not interfere with the public use of the highways. See Bell Telephone Company of Pennsylvania v. Lewis, 317 Pa. 387, 177 A. 36 (1935). Use of the streets by the public utility companies is subject to the earlier and superior rights of the public. It has been held that the police power to control and regulate the highways so as to protect the public health and safety is one that cannot be bargained away by legislative or municipal grant. Such authority is both paramount and inalienable. Scranton Gas and Water Company v. Scranton, 214 Pa. 586, 590, 591, 64 A. 84 (1906).

The public utility companies so using the highway rights-of-way do not obtain any property rights therein. Philadelphia Electric Co. v. Philadelphia, 301 Pa. 291, 302, 152 A. 23 (1930); Bell Telephone Company of Pennsylvania v. Pennsylvania Public Utility Commission, 139 Pa. Superior Ct. 529, 534, 12 A.2d 479 (1940). The Commonwealth, through any designated agency, may compel the public utility companies to remove or relocate their facilities at the company's expense. Philadelphia Suburban Water Co. v. Pennsylvania Public Utility Commission, 168 Pa. Superior Ct. 360, 366, 78 A.2d 46 (1951); Keystone Telephone Co. v. Philadelphia & Reading Railway Co., 56 Pa. Superior Ct. 384, 386 (1914).

It does not follow, however, as we shall hereafter point out, that the Commonwealth does not have the power to pay the public utility companies the cost of

[ 185 Pa. Super. Page 7]

    relocating such facilities under certain circumstances providing it expresses the intent to do so through statute. See Soldiers and Sailors Memorial Bridge, 308 Pa. 487, 491, 162 A. 309 (1932). For years the taxpayers have been paying railroad companies for the cost of relocating their facilities erected on highway rights-of-way, and this has been done even when the dangerous condition sought to be eliminated was originally caused by the railroad's construction over a highway which prior thereto had been safe. Lancaster County v. Public Service Commission, 77 Pa. Superior Ct. 495, 500 (1921); Tarentum Borough v. Pennsylvania Public Utility Commission, 171 Pa. Superior Ct. 156, 161, 90 A.2d 853 (1952).

The refusal to pay for the relocation of utilities, other than railroads, is based upon the theory that inasmuch as public utility companies are not required to pay for the use of the highway, the Commonwealth has no obligation to them when it requires them to change their facilities because of changes which the Commonwealth desires to make in the highway. It might also be argued that if the Commonwealth was required to pay the cost of relocating utilities, it would become an element of consideration in each proposed construction, and in some cases the cost of such relocation might stand in the way of highway improvement.

The cost of relocating the utilities enters into the rate structure of the public utility companies, and is paid for by the companies' rate payers. It is error to intimate or suggest that such cost is borne by the officials or even the stockholders of the companies. The question of whether the cost of the required relocation of telephone poles erected upon the rights-of-way with authority of the Commonwealth, should be paid on the telephone bills or at the gasoline pumps has been a matter of governmental concern for some years. The public,

[ 185 Pa. Super. Page 8]

    and as a general rule practically the same segment of the public, pays either way, for nearly everybody pays both utility bills and taxes into the Motor License Fund.

When Congress passed the Federal-Aid Highway Act of May 6, 1954, c. 181, P.L. 350, 68 Stat. 71, and the United States Government entered upon its extensive road program, attention was focused on the problem anew. The Highway Research Board made an analysis of the legal aspects of the relocation of public utilities due to highway improvement which is contained in its Special Report 21.

The federal government is bearing approximately 50% of the cost of the highway improvement before us. On some other highway construction it bears 90% of the cost. The federal law presently provides that railroads which are required to eliminate grade crossings of their tracks within public highways are entitled to reimbursement regardless of the state laws on the subject; but it does not presently provide for reimbursement of the cost of other utility relocations, except in those states where the state is obliged by law or otherwise, to bear this cost. Thus, if state "A" receives from the federal government 90% of the cost of utility relocating on inter-state highways because the policy of that state is to bear this cost, while state "B" receives nothing from the federal government for utility relocations because its policy is not to bear this cost, the citizens of state "B" will pay on their utility bills for utility relocations in their state, and will also pay in their federal gasoline tax for a part of the cost of relocating utilities in state "A".

This situation encouraged the introduction of bills in various state legislatures to require the state (and thus the federal government) to pay for the relocation of utilities located within the highway rights-of-way.

[ 185 Pa. Super. Page 9]

Opposition to this proposed legislation arose among automobile clubs, and others, who saw in it a substantial reduction of available funds for desperately needed highway construction. For this and other reasons the proposals in most states were not enacted into law.

In Pennsylvania House Bill No. 984 (Session of 1957) passed the House and Senate, but was vetoed by the Governor July 16, 1957. The bill provided that whenever the Secretary of Highways should determine that any utility located in, on or above, any highway should be relocated to accommodate a reimbursable federal-aid highway project the cost of relocation should be paid by the Commonwealth out of the Motor License Fund.

The public utility companies have no constitutional right to demand from the Commonwealth the cost of relocating their facilities located on a public highway. They acquire no property right in the highways: See cases cited above. They cannot claim costs of such relocation as consequential damages, without statutory authority. Westmoreland Chemical & Color Co. v. Public Service Commission, 294 Pa. 451, 458, 144 A. 407 (1928); Pennsylvania Co. v. Philadelphia, 351 Pa. 214, 217, 40 A.2d 461 (1945). They cannot recover such relocation costs under the common law.

Equitable Gas Company and Duquesne Light Company, intervening appellees, do not contend that they have any property right in the highway rights-of-way by virtue of which they can compel the Commonwealth to pay for relocating their facilities located on public highways. It is their contention that the Commonwealth, through the legislature, has authorized the Pennsylvania Public Utility Commission to determine in crossing improvement cases whether the facts merit the payment by the Commonwealth of all or a part of the cost of relocating the utilities which it orders relocated,

[ 185 Pa. Super. Page 10]

    and if so, to order the payment of such cost by the Department of Highways.

The Commonwealth has exercised its control over its highways through many different agencies, including municipalities, counties, the Department of Highways, The Pennsylvania Public Utility Commission, the Delaware River Joint Commission, the Delaware River Port Authority and others. Bell Telephone Co. of Pennsylvania v. Lewis, supra, 317 Pa. 387, 177 A. 36 (1935); the Delaware River Joint Commission Case, 342 Pa. 119, 19 A.2d 278 (1941); the Delaware River Port Authority v. Pa. Public Utility Commission, 180 Pa. Superior Ct. 315, 119 A.2d 855 (1956).

The legislature placed "matters pertaining to the state highway system, its construction and maintenance, under the authority of the Department of Highways, subject to the limitation that where any highway, state, county, or township, is crossed by the facilities of a public utility, then matters pertaining to the crossing are subject to the exclusive jurisdiction of the Public Utility Commission." Somerset County v. Pennsylvania Public Utility Commission, 132 Pa. Superior Ct. 585, 598, 599, 1 A.2d 806 (1938); Department of Highways v. Pennsylvania Public Utility Commission, 141 Pa. Superior Ct. 376, 14 A.2d 611 (1940). The legislature gave this control of highways at railroad crossings to the Public Service Commission by The Public Service ...


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