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CITY ERIE v. PENNSYLVANIA ELECTRIC COMPANY AND PENNSYLVANIA PUBLIC UTILITY COMMISSION (03/23/78)

decided: March 23, 1978.

CITY OF ERIE, PENNSYLVANIA, PETITIONER
v.
PENNSYLVANIA ELECTRIC COMPANY AND PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENTS



Appeal from the Order of the Pennsylvania Public Utility Commission in case of City of Erie v. Pennsylvania Electric Company, Complaint Docket No. 21781.

COUNSEL

Thomas D. Colbridge, Assistant City Solicitor, for petitioner.

John Aulouiek, with him Steven A. McClaren, Assistant Counsel, Daniel F. Joella, Assistant Counsel, and Barnett Satinsky, Chief Counsel, for respondents.

Judges Crumlish, Jr. and Blatt, sitting as a panel of two. Opinion by Judge Blatt.

Author: Blatt

[ 34 Pa. Commw. Page 327]

The City of Erie (Erie) has petitioned us to review an order of the Pennsylvania Public Utility Commission (PUC) denying Erie's request that the Pennsylvania

[ 34 Pa. Commw. Page 328]

Electric Company (PEC) be prohibited from collecting a state tax surcharge.

On March 10, 1970, the PUC issued an order labeled "State Tax Adjustment Procedure" which permitted public utilities, including PEC to impose a surcharge on customers, based on calculations specifically prescribed in the order, for the purpose of recovering a portion of legislatively imposed tax increases levied on the utilities during the latter part of 1969 and in February of 1970. The PUC explained in its order that the temporary*fn1 measure was necessary because it would be impossible for it to review the more than 600 individual rate increase requests with the promptness required to avoid "serious deterioration of service to the public." Erie alleges that it did not become aware of the imposition of the surcharge until 1975, when PEC began to list the surcharge as a separate item on Erie's bill, and on June 21, 1976 it filed a complaint with the PUC requesting that PEC be enjoined from collecting the surcharge in the future and that it be ordered to refund the surcharge money already paid by Erie. Erie argued that the tax surcharge was an illegal delegation of the legislature's taxing power, that the PUC lacked the authority to institute the state tax adjustment procedure, and that its action in doing so violated Article VIII, Section 8 of the Pennsylvania Constitution by lending the credit of the Commonwealth to public utilities. The PUC rejected these arguments and dismissed the complaint in an order entered on August 23, 1976. Erie has now asked us to review this PUC order.

In reviewing any PUC order, this Court is limited to considering only whether or not constitutional rights were violated, an error of law was committed,

[ 34 Pa. Commw. Page 329]

    or whether or not the PUC's findings, determination, or order are supported by substantial evidence. Stiteler v. Bell Telephone Co., 32 Pa. Commonwealth Ct. 319, 379 A.2d 339 (1977).

Erie argues that the PUC's March 10, 1970 order usurps the legislative function of taxation by placing the tax burden directly upon the users of electricity rather than upon the utility, as the legislature had intended. A similar argument, however, was raised and dismissed by our Superior Court in Borough of Lansdowne v. Public Service Commission, 74 Pa. Superior Ct. 203 (1920) (allocatur denied), in which Lansdowne had contended that, by fixing the rates to be charged by the local water company for fire hydrant ...


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