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BOROUGH GROVE CITY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION (02/19/86)

decided: February 19, 1986.

BOROUGH OF GROVE CITY, PETITIONER
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENT



Appeal from the Order of the Pennsylvania Public Utility Commission in case of Petitions by General Electric Company and the Borough of Grove City for a declaratory order as to the right of Pennsylvania Power Company to provide electric service to General Electric, Docket No. P-820414.

COUNSEL

Woodrow D. Wollesen, with him, Charles F. Wheatley, Jr., and William Steven Paleos, Wheatley & Wollesen, and Timothy R. Bonner, Wherry, Ketler & Bonner, for petitioner.

Louis G. Cocheres, Assistant Counsel, with him, David A. Christiansen, Assistant Counsel, Daniel P. Delaney, Deputy Chief Counsel, and Charles F. Hoffman, Chief Counsel, for respondent.

Roland Morris, with him, Henry T. Reath and Robert E. Kelly, Jr., Duane, Morris & Heckscher, for intervenor, General Electric Company.

Steven A. Berger, Berger, Steingut, Weiner, Fox & Stern ; Of Counsel: James R. Edgerly and Stephen L. Feld, for intervenor, Pennsylvania Power Company.

President Judge Crumlish, Jr., Judges Rogers, Craig, MacPhail, Doyle, Colins and Palladino. Opinion by Judge Rogers.

Author: Rogers

[ 95 Pa. Commw. Page 190]

The Borough of Grove City, Mercer County (Borough), has filed a petition for review of an order of the Pennsylvania Public Utility Commission (PUC) (1) declaring that Pennsylvania Power Company (Penn Power) is the proper supplier of electricity to the General Electric Company's (General Electric) diesel engine plant located partially within the Borough and partially in adjoining Pine Township, (2) dismissing the Borough's complaint against Penn Power for seeking to provide service within the Borough without a certificate of public convenience and (3) denying the Borough's request for an order of PUC declaring that the public interest required that the General Electric facility be served only by the Borough.

These proceedings commenced when on December 20, 1982 General Electric filed with PUC a petition for a declaratory order pursuant to Section 331(f) of the Public Utility Code, 66 Pa. C.S. ยง 331(f), alleging that by letters dated November 16, 1982 the Borough had threatened to prohibit Penn Power from continuing electric service to the General Electric plant to the end that the Borough would provide this service by the Borough electric distribution system; that Penn Power has served General Electric's plant located in the Borough since 1970 because the Borough was unable to do so; that it, General Electric, plans to extend its plant by an addition to be principally located in Pine Township; that General Electric is about to submit to Penn Power a formal request for electric service to be delivered to the plant from a point in Pine Township; and that it, General Electric, wants to continue to be served by Penn Power because Penn

[ 95 Pa. Commw. Page 191]

Power's annual charges will be $478,000 less than the Borough's, its service is more reliable; and because it desires to be served by a supplier whose rates and service are subject to regulation by the PUC. General Electric requested a declaration that it had the right to continued service from Penn Power. By a separate pleading, General Electric moved for a stay of any applications for abandonment of service by Penn Power.

The Borough responded to General Electric's pleadings with a petition to intervene in opposition to General Electric's request for relief; with a complaint against Penn Power for seeking to provide service to General Electric within the Borough limits; and with an application for an order authorizing it, the Borough, to serve General Electric's expanded facilities in Pine Township. In its complaint, the Borough alleged that all of the power it sells it first purchases from Penn Power and that Penn Power has exerted upon it an illegal price squeeze and engaged in other anti-competitive activities to the Borough's detriment as a supplier of electricity.

In an Answer to the Borough's complaint, Penn Power admitted that it sold the Borough the electricity which the Borough sold to its customers; Penn Power denied the Borough's charges of misconduct. In answer to the Borough's petition for an order that it, the Borough, should serve General Electric, Penn Power urged that its existing service should continue pending resolution of General Electric's and the Borough's applications.

The PUC allowed the Borough's intervention, ordered Penn Power to continue service until final action of PUC and referred the applications of General Electric and the Borough to an administrative law judge who conducted extensive hearings.

[ 95 Pa. Commw. Page 192]

The facts material to the disposition of the cause are not in serious dispute. In 1920, Penn Power acquired certificated service rights in Pine Township, which had and still has a common boundary with the Borough. The Borough has owned and operated a municipal electric distribution system for many years before this suit by which it supplies Borough customers with power purchased from Penn Power. The Borough has not manufactured electricity since 1968.

On March 18, 1957, the Borough annexed about twenty-seven acres of land in Pine Township adjacent to the Borough line in which, as the Commission found on substantial evidence, Penn Power, as it was certificated to do, "had extended its facilities from 1928 and through the present time" and "had operated and maintained customer service entrances . . . up to and including August 17, 1957."

In 1967, PESCO, Inc., a manufacturing concern, constructed a plant within the area annexed by the Borough in 1957. In December 1967, the Grove City Borough Council adopted, and the mayor approved, a resolution reciting that PESCO, Inc. would require electric power in amounts and demand which the Borough's electric distribution system was incapable of providing but which Penn Power was able and willing to meet and resolving that Penn Power be authorized to supply PESCO, Inc. with electric power and to erect and maintain facilities within the Borough for that purpose.

General Electric acquired the PESCO, Inc. facility in 1970 and has conducted manufacturing operations there since that time. It is uncontested, as the PUC found, that Penn Power "provided electric service from 1968-1970 to PESCO, Inc. a firm which was located in the building which [General ...


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