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decided: September 21, 1982.


Appeal from the Order of the Pennsylvania Public Utility Commission in case of United States Steel Corporation v. The Peoples Natural Gas Company, No. C-79030772.


Henry M. Wick, Jr., with him Charles J. Streiff, Wick, Vuono & Lavelle, and J. F. Wilson, for petitioner.

Robert A. Christianson, Assistant Counsel, with him Steven A. McClaren, Deputy Chief Counsel, and Joseph J. Malatesta, Jr., Chief Counsel, for respondent.

Walter R. Hall, II, with him Susan L. Gordon, Morgan, Lewis & Bockius, and Robert M. Jacob, for intervenor, The Peoples Natural Gas Company.

Daniel Clearfield, Assistant Consumer Advocate, with him Walter W. Cohen, Consumer Advocate, for intervenor, Walter W. Cohen, Consumer Advocate of Pennsylvania.

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

Author: Crumlish

[ 69 Pa. Commw. Page 136]

United States Steel Corporation (USS) appeals from a Public Utility Commission (PUC or Commission) order dismissing USS' complaint. We affirm.

This dispute evolves from a PUC short-form order, adopted October 26, 1978, and entered October 27, 1978 (October 27th order) which authorized Peoples Natural Gas Company (Peoples or utility), a natural gas provider, to file tariffs*fn1 designed to produce total annual operating revenues of $136,610,565.00, resulting in an annual revenue increase of $3,573,974.00.*fn2 As a prerequisite to the tariff's implementation, Peoples was required to file with the Commission detailed calculations demonstrating compliance with the October 27th order. As directed, Peoples filed Supplement No. 19 to Tariff Gas -- Pa. P.U.C. No. 37

[ 69 Pa. Commw. Page 137]

(Supplement No. 19) which allegedly delineated a rate structure designed to provide the PUC-sanctioned operating revenues. At a November 21, 1978 public session, the Commission initially approved Supplement No. 19, as recommended by its technical staff which had reviewed the supplement's supporting data following two ex parte conferences with the utility. The PUC, by long-form order dated February 2, 1979, gave the tariffs final approval.

On March 20, 1979, USS filed a complaint with the PUC under Section 701 of the Public Utility Code (Code),*fn3 alleging:

First, that Supplement No. 19 failed to comply with the October 27th order in that the supplement's rates were designed to generate annual revenues in excess of the PUC-approved amount;*fn4 and

[ 69 Pa. Commw. Page 138]

    legally sufficient to sustain the burden of proof imposed by the Commission's November 8, 1979 order. The motion was granted and the PUC affirmed. USS appealed here. Peoples and the Consumer Advocate of Pennsylvania have intervened.

Initially, we note that our scope of review is limited to a determination of whether constitutional rights have been violated or an error of law has been committed, or whether the Commission's findings, determinations or order are supported by substantial evidence. See Philadelphia Electric Co. v. Public Utility Commission, 61 Pa. Commonwealth Ct. 325, 433 A.2d 620 (1981).

USS first claims that the Commission erred by imposing the burden of proof on USS, the complainant. We agree that the burden properly rests with the utility,*fn8 however, we are precluded from considering this error in our determination since USS failed to present this issue before the PUC, thereby waiving any objection.*fn9

[ 69 Pa. Commw. Page 140]

USS next contends that, even if the burden of proof were properly placed, it presented a prima facie case, sufficient to overcome Peoples' motion to dismiss. Section 703(b) of the Code*fn10 provides in part that: "[t]he commission may dismiss any complaint without a hearing if, in its opinion, a hearing is not necessary in the public interest." The PUC relies on this subsection as one support of its decision to dismiss USS' complaint without the presentation of a rebuttal by Peoples. We disagree.

[ 69 Pa. Commw. Page 141]

Section 703(b) clearly vests the Commission with the discretion to hold hearings on a complaint, and a decision to dismiss a complaint without a hearing will be reversed only if there were an abuse of discretion. Where, however, the PUC has ordered a hearing, it is an abuse of discretion to terminate that hearing upon completion of the direct case solely on the basis of section 703(b) discretion. The PUC seems to argue that USS' direct case and Peoples' rebuttal constituted separate "hearings" within the meaning of section 703(b), and that the administrative law judge (and ultimately the Commission) could, in its discretion, dismiss the complaint following USS' direct case without an additional hearing (i.e., Peoples' rebuttal). However, we interpret "hearing" as one continuous proceeding that may extend over a sustained period of time, with definite factual and legal issues to be tried, in which all parties involved have a right to be heard. Once the Commission has deemed, in its discretion, to proceed with a hearing on a complaint, generally the PUC must pursue that hearing to its natural termination. Hence, the Commission cannot terminate the hearing after presentment of the direct case on the Page 141} basis of section 703(b) discretion alone. We are, however, compelled to agree, for a separate reason, that Peoples' motion to dismiss, or motion for compulsory non-suit,*fn11 was properly granted.

A compulsory non-suit motion allows the defendant (Peoples) to test the sufficiency of the plaintiff's (USS) evidence. See Atlantic Richfield Co. v. Razumic, 480 Pa. 366, 390 A.2d 736 (1978). A non-suit may be entered only in a clear case, and the plaintiff must be given the benefit of all favorable testimony and every reasonable inference arising therefrom, see Harasty v. Borough of West Brownsville, 50 Pa. Commonwealth Ct. 186, 412 A.2d 688 (1980), with all conflicts resolved in the plaintiff's favor. See Martino v. Great Atlantic and Pacific Tea Co., 419 Pa. 229, 213 A.2d 608 (1965).

USS' expert witness, Mr. Edward J. Rager, alleged that the Supplement No. 19 rates achieved a revenue increase 185% greater than that allowed by the October 27th order. A painstaking review of the record, however, reveals that Rager based his testimony on

[ 69 Pa. Commw. Page 142]

    various crucial assumptions regarding possible interpretations of the October 27th order. The witness candidly admitted uncertainty concerning the PUC's intent underlying the order and acknowledged that, if his foundational assumptions were incorrect, his conclusions likewise would be incorrect.*fn12 Moreover, the mere existence of Rager's alternative interpretation of the October 27th order (resulting in an alternate rate structure) does not, by itself, cast doubt on Supplement No. 19's rates. In light of the burden of proof assumed by USS, and considering the equivocal nature of Rager's testimony and the emphasis placed on his foundational assumptions, we conclude that USS failed to establish a prima facie case and, hence, that Peoples' dismiss motion was granted properly.

USS' final contention (although not entirely clear) appears to center on the propriety of the Commission's February 2, 1979 order which gave final approval of Supplement No. 19. USS seems to argue that it was denied the opportunity to inquire fully into Supplement No. 19 before the supplement's acceptance by the February 2, 1979 PUC order. Although the PUC's technical staff had conferred ex parte with Peoples prior to the supplement's approval, USS had the opportunity to participate fully during the rate proceedings, including discovery, evidence presentation and adversary argument. Furthermore, the complaint before us concerns Peoples' alleged non-compliance with the Commission's October 27th order. Nowhere in the pleading is the propriety of the February 2,

[ 69 Pa. Commw. Page 1431979]

order questioned.*fn13 Hence, we find this claim meritless.



The Pennsylvania Public Utility Commission order, C-79030772 adopted September 18, 1980, and entered October 1, 1980, is hereby affirmed.

Judges Blatt and MacPhail dissent.

Judges Mencer and Palladino did not participate in the decision in this case.



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