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decided: June 30, 1965.


Appeals from order of Superior Court, March T., 1965, Nos. 29, 30 and 31, affirming order of Pennsylvania Public Utility Commission, Nos. 90296, 90297 and 90298, in case of Drexelbrook Associates v. Pennsylvania Public Utility Commission.


Irving R. Segal, with him Guy G. deFuria, Harold B. Bornemann, and deFuria, Larkin & deFuria, and Schnader, Harrison, Segal & Lewis, for appellant.

Daniel F. Joella, Assistant Counsel, with him Joseph C. Bruno, Chief Counsel, for Pennsylvania Public Utility Commission, appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts. Dissenting Opinion by Mr. Justice Cohen. Mr. Justice Eagen concurs in this dissenting opinion.

Author: Roberts

[ 418 Pa. Page 432]

Applications to the Public Utility Commission were filed by the Philadelphia Electric Company and the Philadelphia Suburban Water Company seeking approval of the transfer by sale of certain equipment.*fn1 Commission approval would enable the applicants to transfer distribution, service-supply and metering equipment to Drexelbrook Associates, a registered limited partnership which owns and manages a real estate development known as "Drexelbrook". Drexelbrook, located in Drexel Hill, Delaware County, is a garden-type apartment village with 90 buildings, containing 1223 residential units, 9 retail stores, various public areas, and a club with a dining room, swimming pool, skating rink, and tennis courts.

The equipment involved in the proposed transfer was installed originally by the applicants in the buildings and stores of the development and is presently used by the applicants to furnish gas, water and electric service directly to Drexelbrook tenants. Upon conclusion of the transfers, water service would be supplied by the water company directly to Drexelbrook Associates at four metering points and gas and electric service would be supplied by the electric company to Drexelbrook Associates at a single metering location.*fn2 Drexelbrook Associates would purchase gas, electricity,

[ 418 Pa. Page 433]

    and water from the applicants at the proposed metering points. In turn, it would assume the obligation and sole responsibility for furnishing and distributing gas, electricity, and water to its tenants and for servicing and maintaining the transferred facilities.

With respect to electricity and gas, Drexelbrook Associates assumes that it would qualify for wholesale tariff rates at such single metering points,*fn3 and proposes to retain the transferred meters in order to measure each of its tenant's individual consumption. It has agreed to bill each tenant on the basis of such consumption at the same rate which the tenant would pay if he received service individually and directly from the electric company, thereby enabling it to make a profit. In like manner, Drexelbrook Associates assumes that, with respect to water, it would also qualify for the applicable wholesale tariff rates based on single point water metering service.*fn4 It proposes to continue to furnish water to apartment tenants on the existing basis by including the charges for water services within the rent. Evidently, remetering of water at a profit is contemplated only with respect to the swim club and store tenants.

The commission dismissed the applications without hearing on August 19, 1963. Drexelbrook Associates then asked the commission to reopen the matter and to grant it leave to intervene and offer evidence in support of the applications. The request was granted but after a subsequent hearing the commission, by a vote

[ 418 Pa. Page 434]

    of 3-2, dismissed the applications on June 8, 1964. Thereafter, Drexelbrook Associates appealed to the Superior Court*fn5 which divided equally, thereby affirming the commission's order. A majority of the Superior Court then certified the case to this Court for consideration and decision.*fn6

In dismissing the applications, the commission held that upon consummation of the proposed transfers of the designated service and metering equipment, appellant would become subject to the provisions of the Public Utility Law.*fn7 For that reason, the commission concluded that it would be necessary for appellant to seek commission authorization to furnish the public utility services now rendered by the applicants.

The term "public utility" is defined in Section 2 of the Public Utility Law as including "persons or corporations . . . owning or operating in this Commonwealth equipment or facilities for: (a) producing, generating, transmitting, distributing, or furnishing natural or artificial gas, electricity . . . to or for the public for compensation; (b) diverting, developing, pumping, impounding, distributing or furnishing water to or for the public for compensation. . . ."*fn8 (Emphasis supplied.) The question presented is whether ...

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