decided: July 24, 1979.
WESTINGHOUSE ELECTRIC CORPORATION, PETITIONER
PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENT; THE BELL TELEPHONE COMPANY OF PENNSYLVANIA ET AL., INTERVENORS
Appeals from the Orders of the Pennsylvania Public Utility Commission in case of Pennsylvania Public Utility Commission v. The Bell Telephone Company of Pennsylvania, R.I.D. No. 367.
Robert H. Griswold, with him McNees, Wallace & Nurick, for petitioner.
Bohdan R. Pankiw, with him Charles F. Hoffman, Assistant Counsel, Steven A. McClaren, Deputy Chief Counsel, and George M. Kashi, Acting Chief Counsel, for respondent.
Richard D. Spiegelman, Assistant Consumer Advocate, with him Mark P. Widoff, Consumer Advocate, for intervenors.
President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Mencer, Rogers, Craig and MacPhail. Judges Blatt and DiSalle did not participate. Opinion by Judge Rogers.
[ 44 Pa. Commw. Page 408]
In 1976 The Bell Telephone Company (Bell) filed new tariffs with the Pennsylvania Public Utility Commission showing proposed changes in its intrastate telephone rates calculated to produce additional revenues of $137,635,000 and expense savings of $10,585,000. The PUC suspended Bell's proposed tariff revisions
[ 44 Pa. Commw. Page 409]
and instituted an investigation. The thirty-seven complaints filed against the new tariffs, including those of the Consumer Advocate and Westinghouse Electric Corporation, were consolidated with the investigation proceedings. By order entered in short form on December 28, 1977 and in long form on April 4, 1978, the PUC approved an increase in revenue of $38,669,000 granting increases to specific services and allocating the remaining revenue deficiency 60 percent to vertical services and 40 percent to basic services.*fn1 Bell filed tariff revisions, effective February 12 and March 1, 1978 to meet the $38,669,000 revenue deficiency.
In response to Bell's request for modification filed on April 19, 1978 the PUC entered an order on May 11, 1978 approving an additional $9,413,000 in revenue requirements resulting from a correction of technical errors in computing Bell's tax liability made in the April 4, 1978 order. The May 11 order also required Bell to file within 30 days three alternate plans for allocating the additional $9.4 million.*fn2 At a public meeting held on May 23, 1978 the PUC approved that plan submitted by Bell which allocated the $9.4 million in a ratio of 90 percent to vertical services and 10 percent to basic services.
Westinghouse, a heavy user of vertical services, has filed two petitions for review which we have consolidated
[ 44 Pa. Commw. Page 410]
for briefing, argument and disposition. The first, No. 1346 C.D. 1978, seeks review of the PUC's May 11, 1978 order which modified the April 4, 1978 order by increasing Bell's revenue requirements. The second, No. 1364 C.D. 1978, seeks review of the PUC's "informal order" of May 23, 1978 which approved the allocation of $9.4 million, 90 percent to vertical services and 10 percent to basic services. Westinghouse does not dispute the PUC's allowance of additional revenues in the amount of $9,413,000. It complains that the order of May 11, 1978 and the informal order of May 23, 1978 were invalid because they were entered subsequent to the filing of Bell's petition for review of the PUC's December 28, 1977 short form order and also because Westinghouse was not afforded notice and an opportunity to be heard before the PUC issued the amendatory orders. The Consumer Advocate has intervened and, as does Westinghouse, says that a hearing is necessary on the allocation of the $9.4 million in additional revenues.
The PUC did not lose its power to amend its April 4, 1978 order by the filing of Bell's petition for review. Pa. R.A.P. 1701 provides pertinently:
(a) General Rule. Except as otherwise prescribed by these rules, after an appeal is taken or a petition for allowance of appeal is filed in a matter or review of a quasi-judicial order is sought, the lower court or other government unit may no longer proceed further in the matter.
(b) Authority of lower court or agency after appeal. After an appeal is taken or a petition for allowance of appeal is filed in a matter or review of a quasi-judicial order is sought, the lower court or other government unit may:
[ 44 Pa. Commw. Page 411]
(3) Grant reconsideration of the order which is the subject of the appeal or petition if:
(i) an application for reconsideration of the order is filed in the lower court or other government unit within the time provided or prescribed by law; and
(ii) an order expressly granting reconsideration of such prior order is filed in the lower court or other government unit within the time prescribed by these rules for the filing of a notice of appeal, petition for allowance of appeal or petition for review of a quasi-judicial order with respect to such prior order, or within any shorter time provided or prescribed by law for the granting of reconsideration.
A timely order granting reconsideration under this paragraph shall render inoperative any such notice of appeal or petition for allowance of appeal or petition for review of a quasi-judicial order theretofore or thereafter filed or docketed with respect to the prior order, and the clerk of any court in which such an inoperative notice or petition is filed or docketed shall upon praecipe of any party note on the docket that such notice or petition has been stricken under this rule. Where a timely order of reconsideration is entered under this paragraph, the time for filing a notice of appeal or petition for allowance of appeal or petition for review begins to run anew after the entry of the decision on reconsideration, whether or not that decision amounts to a reaffirmation of the prior determination of the lower court or other government unit.
[ 44 Pa. Commw. Page 412]
Bell's request for modification of the April 4, 1978 long form order, filed on April 19, 1978, as provided for at 52 Pa. Code § 3.291, was a request for reconsideration contemplated under Pa. R.A.P. § 1701(b)(3). The note to Rule 1701 states the purpose of subdivision (b)(3) is to permit a party to file both a petition for review and a request for reconsideration and then if the administrative agency finds the request for reconsideration lacks merit, the "prior appeal paper will remain in effect, and appeal will have been taken without the necessity to watch the calendar for the running of the appeal period." The PUC's May 11, 1978 order granting Bell's petition for modification therefore rendered inoperative Bell's petition for review of the December 28, 1977 short form order.
[ 44 Pa. Commw. Page 413]
We agree with Westinghouse, however, that the PUC was required to provide all interested parties with notice and an opportunity to be heard before allocating the $9.4 million increase in revenues. Section 703(g) of the Public Utility Code, 66 Pa. C.S. § 703(g) states: "The commission may, at any time, after notice and after opportunity to be heard as provided in this chapter, rescind or amend any order made by it. . . ." (Emphasis added.) The PUC action in approving the 90 percent to vertical services and 10 percent to basic services allocation plan for the $9.4 million in additional revenues after the correction of technical errors in the April 4, 1978 order effectively changed the rate structure of a final order which had allocated a remaining revenue deficiency on the basis of 60 percent to vertical services and 40 percent to basic services. This action clearly effected a substantive change in, and not a mere clarification of, a prior order. Compare Lang v. Pennsylvania Public Utility Commission, 207 Pa. Superior Ct. 312, 217 A.2d 750 (1966) and West Penn Power Co. v. Pennsylvania Page 413} Public Utility Commission, 174 Pa. Superior Ct. 123, 100 A.2d 110 (1953) with County of Beaver v. Pennsylvania Public Utility Commission, 28 Pa. Commonwealth Ct. 511, 369 A.2d 509 (1977).
Accordingly, we enter the following:
And Now, this 24th day of July, 1979, the action of the Pennsylvania Public Utility Commission taken at a public meeting on May 23, 1978 approving a plan for allocating a $9,413,000 increase in revenues in a ratio of 90 percent to vertical services and 10 percent to basic services is hereby vacated and the matter remanded for proceedings conforming to Section 703 of the Public Utility Code, 66 Pa. C.S. § 703. The Commission's order of May 11, 1978 is affirmed.
Order approving allocation vacated. Case remanded.