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decided: March 29, 1967.


Appeals from order of Pennsylvania Public Utility Commission, Nos. 18106 and 18107, in case of Allegheny Center Associates v. Pennsylvania Public Utility Commission et al.


Frank L. Seamans, with him William H. Pentz, and Eckert, Seamans & Cherin, for appellant.

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

Charles E. Thomas, with him Jack F. Aschinger, Thomas J. Munsch, Jr., Walter T. Wardzinski, and Metzger, Hafer, Keefer, Thomas & Wood, for intervening appellee.

Ervin, P. J., Wright, Watkins, Montgomery, Jacobs, Hoffman, and Spaulding, JJ. Opinion by Hoffman, J. Dissenting Opinion by Wright, J.

Author: Hoffman

[ 209 Pa. Super. Page 335]

This is an appeal by Allegheny Center Associates (Allegheny), owners and operators of a roofed-over mall "commercial center" from an order of the Pennsylvania Public Utility Commission. The issue, simply stated, is whether it was unreasonable for the Duquesne Light Company to refuse to supply single point electric service at wholesale rates to Allegheny for resale

[ 209 Pa. Super. Page 336]

    or redistribution to prospective tenants.*fn1 The pertinent facts follow:

Prior to June 1, 1965, Duquesne's Tariff Rule No. 18 provided:

"18. Resale. Electric energy supplied to customers shall not be resold, except when supplied to customers operating office buildings and buildings of similar character, in which event it may be resold by the customer to tenants, provided such tenants occupy the premises designated in the contract between the customer and the Company, and the rates charged such tenants by the customer correspond to the rates charged by the Company for a like and contemporaneous service." (Emphasis supplied).

Under this Rule, owners of certain buildings were permitted to purchase single point electric service at wholesale rates. This electricity would then be resold by the owners to their tenants at rates which would correspond to the regular rates charged to customers for similar service by Duquesne.

On March 31, 1965, Duquesne filed a tariff supplement with the Public Utility Commission revising Tariff Rule No. 18. It was intended that this rule become effective June 1, 1965. New Rule 18 provided:

"18. Redistribution. All electric energy shall be consumed by the customer to whom the Company furnishes

[ 209 Pa. Super. Page 337]

    such energy, except that (1) a customer operating a separate office building or separate apartment building, and (2) any other customer who, upon showing that special circumstances exist, obtains the written consent of the Company may redistribute electric energy to tenants of such customer, but only if such tenants are not required to make a specific payment for such energy. This rule shall not affect any practice undertaken prior to June 1, 1965."

The effect of proposed Rule 18 would be to make all submetering and resale of electricity invalid after June 1, 1965. The proposed rule, at the same time, would permit owners of certain buildings to redistribute electricity, but only when the tenants of those buildings were not required to make specific payments for such. Proposed Rule 18, however, would specifically preserve practices undertaken prior to June 1, 1965.

On May 24, 1965, two separate complaints were filed by Allegheny before the Pennsylvania Public Utility Commission. Complaint C. 18106 alleged that Allegheny was entitled to single point electric service at wholesale rates for resale or redistribution. Duquesne filed an answer admitting that it had refused to furnish such electric service but averring that such service was prohibited under old Rule 18.

Complaint C. 18107 alleged that proposed Rule 18 creates an unreasonable preference in favor of customers already receiving service under old Rule 18. Duquesne's answer to this Complaint denied that proposed Rule 18 would create an unreasonable preference.

On May 27, 1965, the Commission itself instituted an investigation into the reasonableness of proposed Rule 18, which investigation was docketed at C. 18109. Concurrently, the Commission suspended proposed Rule 18 until December 1, 1965. The rule was further suspended until March 1, 1966 by order of the Commission

[ 209 Pa. Super. Page 338]

    dated November 22, 1965. On February 21, 1966, the new rule was stayed pending a final determination by the Commission in these proceedings.

The Commission, on May 16, 1966, held that Duquesne's refusal of single point service to Allegheny was not unreasonable, because the proposed commercial center "is not an office building or a building of similar character within the meaning and intendment of present Rule 18, nor a separate office building or separate apartment building within the meaning and intendment of proposed Rule 18." The Commission also found that neither old nor proposed Rule 18 were unreasonable or discriminatory.

On appeal, Allegheny contends that its commercial center is entitled to single point service at wholesale rates because it is an office building or building of similar character within the meaning of old Rule 18.*fn2 Allegheny argues, in the alternative, that it is entitled to such service even if it does not come within the exception of old Rule 18 because both old and new Rules 18 would be discriminatory as to it. In view of our decision in this case, as it subsequently appears in this opinion, we find it unnecessary to reach the second question raised.

[ 209 Pa. Super. Page 339]

After carefully reviewing the evidence in this case, we conclude that the proposed commercial center is a building similar in character to an office building within the meaning of old Rule 18. In reversing the finding of the Commission on this point, we are mindful of the very great weight which must be accorded to the findings of the Public Utility Commission. Clemmer v. Pennsylvania Public Utility Commission, 207 Pa. Superior Ct. 388, 217 A.2d 800 (1966). Nonetheless, we find in the instant case that the evidence, as a whole, was not legally sufficient to support the Commission's order.

Although we shall not recite all of the details with respect to the proposed center, the following facts are pertinent. The commercial center is a five level structure. The Pittsburgh Parking Authority owns the first three levels which will be leased to Northside Parking Corporation and used as a garage. The lowest two levels in this structure are underground. Part of the third level will be leased to Allegheny to house two stores. Allegheny will construct and own the fourth and fifth levels which will comprise a single building under one roof, having a common covered mall or court upon which all stores front.*fn3 The electrical distribution center, which is built into the building, can receive untransformed power at a single point and submeter it to Allegheny's tenants on the third, fourth and fifth levels.*fn4 The Commission found that Allegheny will be leasing most of its available space to commercial tenants, but that there would probably be some offices in the building.

[ 209 Pa. Super. Page 340]

The evidence adduced at the Commission's hearing clearly demonstrated that old Rule 18 has, in the past, been interpreted to apply to a wide variety of multi-tenanted, multi-purpose buildings under one roof. Thus, numerous examples were presented by Allegheny to demonstrate that single point service had been extended to many buildings in Pittsburgh which contained commercial tenants as well as offices.*fn5

Allegheny attempted to distinguish these situations by suggesting that a building of similar character within the meaning of old Rule 18 is one which is used primarily for offices and which incidentally contains several commercial tenants.

The inaccuracy of this suggestion was most clearly pointed up, however, by the concession of Duquesne's own witnesses that apartment buildings and hotels are also considered buildings similar in character to office buildings.*fn6

The testimony of Duquesne's own witnesses reflects, therefore, that there was no requirement that a building

[ 209 Pa. Super. Page 341]

    contain a preponderance of offices to qualify for single point service under old Rule 18. The only rational conclusion which does emerge from the testimony is that old Rule 18 applied to a wide variety of multitenanted, multi-purpose buildings under one roof. The proposed commercial structure clearly falls within that definition.*fn7

We conclude, therefore, that the proposed commercial center is "an office building or a building of similar character" under old Rule 18 as that term has traditionally been interpreted by Duquesne. The Commission's finding that the center does not fall within that category is inconsistent with the established practice in Duquesne's service area as reflected in the testimony of Duquesne's own witnesses. Duquesne has for many years allowed single point service to a wide variety of multi-tenanted, multi-purpose buildings, including office buildings, office buildings with commercial tenants, apartment buildings and hotel buildings. To disallow service to this multi-purpose building, therefore, would constitute an unreasonable discrimination and should not be permitted. Public Utility Law, ยง 402, 66 P.S. 1172.

Order reversed and record remanded to the Commission with directions to order intervening appellee to grant appellant single point service for resale or redistribution.


Order reversed.

[ 209 Pa. Super. Page 342]

Dissenting Opinion by Wright, J.:

The issues which these appeals concern are primarily administrative in character and peculiarly within the province of the Commission to determine. The problems involved were thoroughly and intelligently analyzed by the Commission. Its findings, having substantial basis in the voluminous record, are reasonable and in conformity with the law. I would affirm the Commission's order.

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