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LACKAWAXEN WATER & SEWER COMPANY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION (10/02/84)

decided: October 2, 1984.

LACKAWAXEN WATER & SEWER COMPANY, PETITIONER
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENT



Appeals from the Orders of the Pennsylvania Public Utility Commission in the cases of Charles Fingerle v. Lackawaxen Water & Sewer Company, No. C-812607, and Masthope Property Owners Council et al. v. Lackawaxen Water & Sewer Company, No. C-812384 etc.

COUNSEL

Christopher C. Conner, with him, Charles B. Zwally, Shearer, Mette & Woodside, for petitioner.

Terrance J. Fitzpatrick, Assistant Counsel, with him, Louise A. Knight, Deputy Chief Counsel, and Charles F. Hoffman, Chief Counsel, for respondent.

Judges Rogers, Palladino and Barbieri, sitting as a panel of three. Opinion by Judge Barbieri. Judge Palladino concurs in the result only. Dissenting Opinion by Judge Rogers.

Author: Barbieri

[ 85 Pa. Commw. Page 378]

The Lackawaxen Water & Sewer Company (Lackawaxen) appeals here from two orders of the Pennsylvania Public Utility Commission (Commission) directing it, inter alia, to "return" sewer and water line connection fees paid by property owners in two developments known as Masthope Rapids and Falling Waters at Masthope. We reverse.

Masthope Rapids and Falling Waters at Masthope are resort communities which were developed on two contiguous parcels of land by Masthope Rapids, Inc. and Falling Waters at Masthope, Inc. respectively. As these communities were built a common water and sewer system was installed by the developers. Individual lots were then sold subject to a restrictive covenant which required the purchaser or his or her successor in title to pay a $250 sewer line and a $250 water line

[ 85 Pa. Commw. Page 379]

    connection fee to the developers if and when the landowner decided to connect his or her property to the communities' water and sewer system. These utility systems commenced operations in 1977 without the benefit of a certificate of public convenience, but charged no fees other than the aforementioned connection fees.

At some point thereafter which is not disclosed in the record before us the water and sewer systems within the communities were transferred to Lackawaxen. Lackawaxen then sought and obtained a certificate of public convenience and commenced monthly charges for water and sewer service in April of 1981 pursuant to a duly filed tariff. Thereafter, on March 9, 1981, the Masthope Property Owners Council (Council), purporting to represent all Masthope Rapids property owners, filed a formal complaint with the Commission alleging therein, inter alia, that "Lackawaxen . . . is attempting to charge the individual property owners a hook-up fee of $250.00, which we believe to be contrary to law." Twelve other Masthope Rapids property owners apparently filed similar complaints, although these do not appear in the record before us, and these thirteen complaints were consolidated for disposition. In addition, a separate complaint was filed on August 21, 1981, by Charles Fingerle, a resident of Masthope Rapids, which also raised the question of the legality of the $250 water and sewer line connection fees.

Following a hearing on the Council's complaint, the issuance of an initial decision, the filing of exceptions, the disposition of these exceptions, an appeal by the complainants to the Commission, and the issuance of a remand order by the Commission, the administrative law judge (ALJ), without taking any additional evidence, issued an Initial Decision On Remand in which he concluded, inter alia, (1) that the sewer and water line connection fees which had been

[ 85 Pa. Commw. Page 380]

    paid by the residents of Masthope Rapids and Falling Waters at Masthope were unreasonable and (2) that Lackawaxen would have to refund these fees, even though they had not been paid to Lackawaxen, since "[w]hen Lackawaxen Water and Sewer Company acquired the water and sewer systems from the developers, it also acquired its various obligations, liabilities and responsibilities." The ALJ further noted that he felt that Lackawaxen should be responsible for refunding these fees since Lackawaxen, Masthope Rapids, Inc., and Falling Waters at Masthope, Inc. had common owners. A similar order was issued in the Fingerle case, and after the filing and disposition of exceptions in these cases, and the filing of appeals to the Commission, the Commission ...


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