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WESTERN PENNSYLVANIA WATER COMPANY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION (02/28/77)

decided: February 28, 1977.

WESTERN PENNSYLVANIA WATER COMPANY
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION, APPELLANT



COUNSEL

Peter W. Brown, Counsel, Dominic J. Ferraro, Asst. Counsel, Harrisburg, for appellant.

Gregory M. Harvey, Philadelphia, for appellee.

Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy, and Nix, JJ. Manderino, J., did not participate in the consideration or decision of this case. Roberts, J., filed a dissenting opinion in which Jones, C. J., joins.

Author: Pomeroy

[ 471 Pa. Page 349]

OPINION OF THE COURT

In this appeal we are again asked by the Pennsylvania Public Utility Commission to establish the proposition that the Commission has been statutorily empowered to order a public utility to extend its service to customers located outside of its certificated service area. In an earlier litigation, the Commonwealth Court held the Commission powerless so to order. Akron v. Pa. P.U.C., 2 Pa. Commw. 625 (1971). This Court vacated the order of the Commonwealth Court in that case, but for a procedural reason which did not reach the merits of the Commission's contention. Akron Borough v. Pa. P.U.C., 453 Pa. 554, 310 A.2d 271 (1973). In this case, the Commonwealth Court has again held that the Commission lacks that power. Western Pennsylvania Water Company v. Pa. P.U.C., 10 Pa. Commw. 533, 311 A.2d 370 (1973). We granted allocatur because of the important question of administrative law presented. On this record

[ 471 Pa. Page 350]

    we again do not reach the merits of the question of agency power which is tendered, but remand for further proceedings.

I.

A brief historical summary is in order:

In 1966 the Commission, departing from its own precedents, ordered a municipality, operating as a public utility beyond its own boundaries but within a certificated service area, to provide water service to a customer located outside the certificated area. Hoffman v. City of Erie, 42 Pa.P.U.C. 656 (1966). Two years later, the Commission entered a similar order against a privately-owned water company. Kriley v. Butler Water Company, 43 Pa.P.U.C. 586 (1968). Neither of these orders of the Commission was appealed to a court.

In 1967 a private citizen filed a complaint with the Commission against Akron Borough, a municipal corporation which was acting as a public utility in providing water service beyond its municipal boundaries but within a certificated service area, seeking to obtain an extension of service to land of the complainant. The Commission undertook to hear and determine that complaint, but Akron Borough filed a suit within the original jurisdiction of the Commonwealth Court and sought an injunction against the Commission so proceeding.*fn1 The Commonwealth Court held the Commission powerless to act and granted the injunction.*fn2 On appeal to this Court, we vacated the injunction and remanded with direction to dismiss the Borough's complaint. It was our view that the

[ 471 Pa. Page 351]

Legislature, in enacting the provision of the Public Utility Law authorizing such suits, did not "intend to create any different test for determining in what circumstances a superior court . . . would be justified in prohibiting proceedings in an inferior tribunal" than is customarily applied in determining whether a common law writ of prohibition would issue. 453 Pa. at 564-65, 310 A.2d 271. We noted that absent some administrative hearing at which the facts underlying a complaint seeking service extension might be established, we were being asked to interpret the Public Utility Law and to weigh constitutional questions in vacuo.*fn3

In 1972, subsequent to the Commonwealth Court's opinion in Akron Borough (1971) but prior to this Court's opinion in Akron Borough (1973), appellee here, the Western Pennsylvania Water Company, a private public utility corporation, filed an application with the Commission for a certificate of public convenience permitting the company to provide water service to 17 additional customers along a short stretch of road in Butler County outside of its certificated area. The application was routine and was unopposed; no hearing on it was held. On February 13, 1973, the Commission granted

[ 471 Pa. Page 352]

    the application, but subject to a condition which was as follows:

"It being a condition of such certification that Western Pennsylvania Water Company recognize, and accede to, the right of the Commission to order extension of service in the future should such be appropriate in the Commission's view."

The Water Company refused to accept the certificate so conditioned, and appealed to the Commonwealth Court.*fn4 In a "long form" opinion and order dated May 1, 1973,*fn5 the Commission frankly stated that its purpose in including the condition was to avoid the Commonwealth Court's holding in Akron Borough that the Commission was without power to order a utility to provide service beyond its certificated service area.

The Commonwealth Court, as earlier stated, held the Commission to be without such jurisdiction and hence powerless to insist on the condition. The court therefore vacated that portion of the Commission's May 1, 1973 order which set forth the disputed jurisdictional condition above quoted, but affirmed in all other respects.

II.

It comes as a surprise that the Commission should seek to avoid the Commonwealth Court's holding in Akron Borough by insisting that a utility such as appellee subscribe to a concept of the Commission's power which is the exact opposite of that entertained by that court.*fn6 Administrative agencies are creatures of the legislature

[ 471 Pa. Page 353]

    and have only those powers which have been conferred by statute. Day v. Public Service Commission, 312 Pa. 381, 167 A. 565 (1933); Community College of Delaware County v. Fox, 20 Pa. Commw. 335, 342 A.2d 468 (1975); City of Pittsburgh v. Milk Marketing Board, 7 Pa. Commw. 180, 299 A.2d 197 (1973). An administrative agency cannot by mere contrary usage acquire a power not conferred by its organic statutes. Commonwealth v. American Ice Co., 406 Pa. 322, 178 A.2d 768 (1962). It is settled that jurisdiction of a court cannot be extended or conferred by agreement. Calabrese v. Collier Township Municipal Authority, 430 Pa. 289, 240 A.2d 544 (1968); Appeal of Kramer, 445 Pa. 238, 282 A.2d 386 (1971); McConnell v. Schmidt, 234 Pa. Super. 400, 339 A.2d 578 (1975); Employees of Oil City Hospital v. Service Employees International Union, Local 227, AFL-CIO, 18 Pa. Commw. 192, 335 A.2d 537 (1975); it must follow, a fortiori, that an administrative agency cannot acquire jurisdiction by agreement. Nor is it for the agency to seek to create or assure its own jurisdiction by insisting that applicants subscribe to the agency's view of what public policy requires. Drexelbrook Associates v. Pa. P.U.C., 418 Pa. 430, 212 A.2d 237 (1965).*fn7

[ 471 Pa. Page 354]

It follows that the Commission, in attempting to insert the disputed jurisdictional condition into the certificate of public convenience, was engaging in a futile act. If, the Commonwealth Court to the contrary, the legislature has in fact endowed the Commission with the power it claims, then the condition would be a truism. If the Commission has no such jurisdiction, then the attempt to create such jurisdiction by agreement with the Water Company would be invalid. We are of the view that the Commission's attempt to resolve a dispute of statutory jurisdiction by imposition in a certificate of a condition supportive of its view is an error of law. See 66 P.S. § 1437 (1959).*fn8

[ 471 Pa. Page 355]

Because we must reject the Commission's attempt to settle a difficult question of its own jurisdiction in the fashion it has here employed, we must decline once again, as we did in Akron Borough, to pass upon the merits either of the Commission's claim of jurisdiction to order a utility to extend service to a point beyond its certificated service area, or of the Water Company's claim that its constitutional rights would be infringed and its property unlawfully confiscated were the Commission to exercise the power it asserts. As we observed in our Akron Borough decision, "[t]he line between constitutional regulation and unconstitutional taking is almost never discernible in absence of a concrete factual situation." 453 Pa. at 565, 310 A.2d at 277. Regrettably, we again have no "concrete factual situation" from which to adjudicate either the jurisdictional or constitutional issues which are involved.*fn9

[ 471 Pa. Page 356]

While we do not understand from this record that there are facts connected with the instant application which might have caused the Commission to refuse to grant a certificate without the disputed condition, we nevertheless recognize that the possibility exists. See 4 K. C. Davis, Administrative Law Treatise, § 2910 at 183-84 (1958). Rather than affirm the order of the Commonwealth Court which excised the disputed condition from the P.U.C.'s order and affirmed the order as thus altered, we will vacate the order of the Commonwealth Court and vacate the order of the Commission granting the certificate of public convenience, and remand to the Commission for further proceedings consistent with this opinion.

It is so ordered.

ROBERTS, Justice, dissenting.

The issue presented is whether the Pennsylvania Public Utility Commission (PUC) has the authority to condition a grant of a certificate of public convenience upon an agreement by a utility to permit the PUC to order future extensions of service beyond the certificated area.*fn1 A necessarily related question ...


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