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ALLIED DEVELOPMENT AND BUILDING CORPORATION v. PENNSYLVANIA PUBLIC UTILITY COMMISSION AND COLUMBIA GAS PENNSYLVANIA (06/29/81)

decided: June 29, 1981.

ALLIED DEVELOPMENT AND BUILDING CORPORATION, PETITIONER
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION AND COLUMBIA GAS OF PENNSYLVANIA, INC., RESPONDENTS



Appeal from the Order of the Pennsylvania Public Utility Commission in case of Allied Development and Building Corporation v. Columbia Gas of Pennsylvania, Inc., No. 21652-1976.

COUNSEL

Edwin J. Strassburger, with him Dennis S. Shilobod, Messer & Shilobod, P.C., for petitioner.

Larry Gesoff, Assistant Counsel, with him Shirley Rae Don, Deputy Chief Counsel, and Joseph J. Malatesta, Jr., Chief Counsel, for respondent, Pennsylvania Public Utility Commission.

William U. Jacoby, with him Thomas E. Morgan, for respondent, Columbia Gas of Pennsylvania, Inc.

President Judge Crumlish and Judges Wilkinson, Jr., Rogers, Blatt, Craig, Williams, Jr. and Palladino. Judges Mencer and MacPhail did not participate. Opinion by Judge Williams, Jr. Judge Wilkinson, Jr. did not participate in the decision in this case. Judge Mencer did not participate in the decision in this case.

Author: Williams

[ 60 Pa. Commw. Page 209]

Because of severe shortages of natural gas in the early seventies, the Pennsylvania Utility Commission (PUC) issued an Order on February 1, 1972, directing the gas utilities under its jurisdiction to submit to it procedures for the curtailment of gas service, as part of the utilities' tariffs. Columbia Gas of Pennsylvania, Inc. (Columbia) complied on August 8, 1975, by filing a proposed tariff supplement with an effective date of November 1, 1975. Under this tariff Columbia allocated natural gas to certain of its larger users relative to their consumption during previous years; penalty provisions for allocation overruns were included in the tariff terms. Columbia informed its customers of the tariff and of their respective allocations. Appellant herein, Allied Development and Building Corporation (Allied) was notified by letter of August 11, 1975.

When Allied exceeded its authorized usage in the winter of 1975-1976, Columbia imposed a $21,736 penalty upon Allied, in accordance with the approved tariff provisions. Allied then filed a formal complaint with the PUC, alleging that the penalty was unjust, discriminatory, and unreasonable, in that (1) the allocation was unreasonably low, (2) the PUC did not have the power to permit a utility to impose a penalty on a user at that time, and (3) the penalty, not being justifiable as a fair return on the fair value of the gas, is not a just and reasonable rate, and is therefore contrary

[ 60 Pa. Commw. Page 210]

    to the Public Utility Code (Code), 66 Pa. C.S. § 101 et seq.

The Administrative Law Judge (ALJ) dismissed the case on stipulated facts, directing specific discussion to the three assertions Allied made in support of its complaint. First, in response to the allegation that the base volume allocation was unreasonably low because the pertinent building was not fully occupied during the period upon which the allocation was based, the ALJ quoted from a previous PUC decision,*fn1 in which the PUC had denied such relief. He noted that the overrun was due to a voluntary business decision, rather than a unique or unusual circumstance beyond the control of the user which might justify an exception.

Second, in discussing the averment that the imposition of penalties for the use of gas that was actually available for sale would be inequitable, the ALJ again referred to precedent in refusing to grant relief. He noted again that previous decisions that permitted penalty remission for overuse depended upon attendant special circumstances not present in this case, not the availability of gas. Further buttressing his argument was a discussion of the underlying purpose of the curtailment policy -- to alleviate the threat of a shortage and to promote energy conservation. This policy would be rendered nugatory by the broad grant of exemptions.

Third, in reference to the contention that the PUC had no authority under the Code to permit Columbia to impose penalties, the ALJ concluded that the term "penalty", as here used, is not within the ambit of Article XIII,*fn2 but is rather a monetary assessment by

[ 60 Pa. Commw. Page 211]

    which the PUC can control the consumption of the gas to assure continued usage and availability to the public. As such, he maintained, the penalty is implicitly included in the broad powers which the ...


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