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YORK ET AL. v. PENNSYLVANIA PUBLIC UTILITY COMMISSION (10/04/72)

decided: October 4, 1972.

YORK ET AL., APPELLANTS,
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION



Appeal from order of Commonwealth Court, No. 25 C.D., 1971, affirming order of Pennsylvania Public Utility Commission, Dec. T., 1970, Docket Nos. A. 93644-5-6, S.C. 3285 and C. 18244-5, in case of City of York and County of York and Commonwealth of Pennsylvania v. Pennsylvania Public Utility Commission and General Telephone Company of Pennsylvania, York Telephone and Telegraph Company and Princeton Telephone Company.

COUNSEL

Spencer R. Liverant, with him George M. Elsesser, Jr., David W. Bupp, City Solicitor, Jack H. Barton, County Solicitor, and Liverant, Senft and Cohen, for appellants.

J. Shane Creamer, Attorney General, with him Thomas J. Oravetz, Edward J. Weintraub, and Lawrence T. Hoyle, Jr., Deputy Attorneys General, for Commonwealth, intervening appellant.

Philip P. Kalodner, with him Dominic J. Ferraro, for Pennsylvania Public Utility Commission, appellee, and Charles E. Thomas, with him Jack F. Aschinger, and Metzger, Hafer, Keefer, Thomas & Wood, for intervening appellees, General Telephone Co., et al.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy and Nix, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Eagen concurs in the result. Mr. Justice Manderino took no part in the consideration or decision of this case.

Author: Roberts

[ 449 Pa. Page 138]

This is an appeal from an order of the Commonwealth Court affirming an order of the Pennsylvania Public Utilities Commission [hereinafter P.U.C. or Commission] approving the merger of three telephone companies. The Commonwealth Court's order also denied a request by the Attorney General of Pennsylvania to intervene as an appellant in the proceedings in the Commonwealth Court. For the reasons which we shall set forth in full below, we affirm the order of the Commonwealth Court.

I

The controversy which is the basis of this appeal originated in 1966 when the General Telephone Company of Pennsylvania [hereinafter General], the York Telephone and Telegraph Company [hereinafter York Co.] and the Princeton Telephone Company [hereinafter Princeton], pursuant to Section 202 of the Public Utility Law,*fn1 applied to the P.U.C. for a certificate of public convenience approving their proposal to merge York and Princeton into General. The three telephone companies are each owned by the same holding company, General Telephone and Electronics Corporation,

[ 449 Pa. Page 139]

    and the same individual serves as president of all three companies. The City of York and the County of York [hereinafter complainants] filed complaints with the P.U.C. against the telephone companies' application. In addition, the City and County of York also filed complaints directed against York Co.'s redemption, as a part of the merger plan, of its first mortgage bonds.

On October 3 and 4, 1967, hearings were held before a P.U.C. examiner on the application and complaints. Following presentation of evidence by the applicants, the hearings were continued until a future date.

After a considerable delay caused in part by a dispute over certain discovery that was sought by complainants, a further hearing was held before an examiner on March 5, 1969. Thereafter the matter of the application and complaints was argued before the Commission. On December 21, 1970, the P.U.C. issued its order approving the merger and dismissing the complaints of the City and County of York.

Complainants pursued an appeal to the Commonwealth Court from the P.U.C.'s December 21, 1970, order, and obtained a supersedeas staying the Commission's order pending the Commonwealth Court's decision on the merits of the appeal. General, York Co., and Princeton were permitted to intervene as party appellees in the appeal of the City and County of York.

On May 3, 1971, the Attorney General of Pennsylvania petitioned the Commonwealth Court for leave to intervene as an appellant on behalf of the Commonwealth of Pennsylvania. The intervening appellees filed a motion to deny this petition.

On May 5, 1971, the Commonwealth Court heard oral argument on the appeal from the P.U.C. order of December 21, 1970. The Commonwealth Court permitted the Attorney General to appear and argue on the merits of the appeal subject to later consideration

[ 449 Pa. Page 140]

    of whether intervention should be allowed. On June 1, 1971, the Commonwealth Court heard argument on the Attorney General's petition to intervene.

On September 14, 1971, the Commonwealth Court issued an order affirming the order of the P.U.C. and denying the Attorney General's petition to intervene.*fn2 The Attorney General and the City and County of York subsequently petitioned this Court for allowance of appeal which was granted on November 30, 1971.

II

Complainants' first contention is that this Court's decision in Northern Pennsylvania Power Co. v. Pennsylvania Public Utility Commission, 333 Pa. 265, 5 A.2d 133 (1939), sets forth a standard for determining the permissibility of mergers of utilities subject to the jurisdiction of the Public Utility Commission which is not in accord with the standard adopted by the Legislature in the Public Utility Law. We agree.

Section 202 of the Pennsylvania Public Utility Law*fn3 provides that: "Upon the application of any public utility and the approval of such application by the commission, evidenced by its certificate of public convenience first had and obtained, . . . it shall be lawful . . . [f]or any public utility . . . to acquire from, or to transfer to, any person or corporation, . . . by any method or device whatsoever, including a consolidation, merger, sale or lease, the title to, or the possession or use of, any tangible or intangible property used or useful in the public service. . . ."

[ 449 Pa. Page 141]

Section 203 of the Public Utility Law*fn4 makes it clear that a certificate of public convenience approving a merger is not to be granted unless the Commission is able to find affirmatively that public benefit will result from the merger. That section provides in pertinent part: "A certificate of public convenience shall be granted by order of the commission, only if and when the commission shall find or determine that the granting of such ...


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