Appeal from the Order of the Pennsylvania Public Utility Commission in the case of Huntingdon, Inc. and Ryland Homes, Inc. and Eric Peterson and Mary Elizabeth Peterson, h/w v. Newtown Artesian Water Company, No. C-812383 (P-810264).
Richard P. McBride, with him Herbert K. Sudfeld, Jr., McBride, Murphy & Sudfeld, for petitioners.
Velma A. Boozer, with her Robert P. Meehan, Assistant Counsel, Louise Russell Knight, Deputy Chief Counsel, and Charles F. Hoffman, Chief Counsel, for respondent.
Brenden E. Brett, with him D. Mark Thomas, Thomas & Thomas, for intervenor.
Judges Williams, Jr., Doyle and Barbieri, sitting as a panel of three. Opinion by Judge Doyle.
[ 76 Pa. Commw. Page 388]
Huntingdon, Inc. and Ryland Homes, Inc. appeal an order of the Pennsylvania Public Utility Commission (PUC) which directed it to pay a sum in the amount of $138,624.00 to the Newtown Artesian Water Company (Newtown) or suffer termination of water service to Huntingdon's residential development.
Huntingdon, Inc. (Huntingdon) is the developer of a seventy-nine acre residential development in Bucks County known as Sturbridge.*fn1 Prior to the start of construction on the site, Huntingdon approached Newtown to secure water service for the proposed development. Newtown, in a letter dated July 18, 1977, indicated an estimated figure of $76,470.00 to provide for off-site water storage and booster pumping capacity needed to extend service to Sturbridge. On September 30, 1977, Huntingdon filed a complaint before the PUC disputing the $76,470.00 sum for off-site capital contribution as a condition precedent to the provision of water service to the development. On May 2, 1978, Huntingdon and Newtown entered into an extension deposit agreement with an attached preliminary memorandum delineating estimated charges for
[ 76 Pa. Commw. Page 389]
the extension of service to the development. Included in the total was the sum of $76,470.00 for other estimated off-site costs.*fn2 Huntingdon executed the agreement but deposited $76,470.00 less than the total estimated in the memorandum. On October 10, 1978, at the request of Huntingdon, the complaint before the PUC was discontinued without prejudice.
Huntingdon proceeded with the development of Sturbridge, installing water distribution lines, main extensions and facilities within the development which were connected to an existing ten inch water main owned by Newtown which lies beneath the roadway of Route 413 abutting the development. As of February 27, 1981, approximately sixty single family homes had been constructed, sold and occupied in Sturbridge and had been provided water service by Newtown. On or about that date Newtown refused to provide further service to the remaining lots*fn3 in the development until Huntingdon made payment of $138,624.00 claimed to be due as a contribution for off-site improvements made on behalf of Newtown in providing water service to Sturbridge. Proceedings were then instituted before the PUC which resulted in the appeal now before this Court.*fn4 The factual genesis of the problem here presented follows:
[ 76 Pa. Commw. Page 390]
Prior to 1978, Newtown was serving between 1,000 and 1,500 customers and operating four wells and one storage tank with a capacity of 650,000 gallons. In 1973 or 1974, Huntingdon was only one among eight or nine developers requesting water supply from Newtown. In 1976, in response to the growth pressures represented by the requests of the developers, Newtown, pursuant to an agreement with eight developers, not including Huntingdon, formed a wholly owned ...