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PEOPLES NATURAL GAS COMPANY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION. APPEAL PENNSYLVANIA PUBLIC UTILITY COMMISSION APOLLO GAS COMPANY ELJER PLUMBINGWARE DIVISION (12/21/89)

decided: December 21, 1989.

THE PEOPLES NATURAL GAS COMPANY
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION. APPEAL OF PENNSYLVANIA PUBLIC UTILITY COMMISSION; APOLLO GAS COMPANY; ELJER PLUMBINGWARE DIVISION, HOUSEHOLD MANUFACTURING, INC., AND T.W. PHILLIPS GAS AND OIL COMPANY



Appeal from the Order of the Commonwealth Court of Pennsylvania entered June 3, 1988 at No. 289 CD 1987, reversing the Order of the Pennsylvania Public Utility Commission at Docket No. C-850521, entered January 5, 1987. 116 Pa. Commw.Ct. 512; Nix, C.j., and Larsen, Flaherty, McDermott, Zappala and Papadakos, JJ.

Author: Flaherty

[ 523 Pa. Page 372]

OPINION OF THE COURT

This is an appeal, by allowance, from an order of the Commonwealth Court which reversed an order of the Pennsylvania Public Utility Commission (PUC). Peoples Natural Gas Co. v. Public Utility Commission, 116 Pa. Commw.Ct. 512, 542 A.2d 606 (1988). The PUC order was issued on January 5, 1987 authorizing Apollo Gas Company (Apollo), appellant herein, to provide natural gas service to an Eljer Plumbingware (Eljer) manufacturing plant in Ford City, Pennsylvania. The Peoples Natural Gas Company (Peoples) claims that Apollo lacks authority under its certificate of public convenience to provide gas service to Eljer.

Peoples sells natural gas in Ford City and surrounding areas. It has been engaged in that pursuit since 1938, when a certificate of public convenience authorizing it to sell gas in those areas was issued. Another company with gas service rights in the same region was PPG Industries, Inc. (PPG). In 1971, PPG agreed to sell its natural gas wells and pipelines to Apollo, contingent upon Apollo's agreement to supply the gas needs of PPG's manufacturing plant in Ford City as well as the needs of a PPG plant and a Columbia Cement Company plant in Creighton, Pennsylvania.

As a condition of the sale, Apollo was required to furnish documentary evidence of its right to provide the gas service in question. Accordingly, Apollo filed with the PUC an application for a certificate of public convenience. The application stated that Apollo did not currently furnish service in Ford City and that approval from the PUC was required in order to fulfill the condition upon which PPG was willing to sell its gas facilities. The application also stated that the approval being sought was limited to the right to furnish gas to the aforementioned plants and not to the general public. In response, on April 5, 1971, the PUC issued a certificate of public convenience which provided as follows:

[ 523 Pa. Page 3731]

. That applicant, Apollo Gas Company, shall confine and restrict its utility operations in the aforesaid areas to the furnishing of natural gas service to (a) the existing Ford City plant location of PPG Industries, Inc., (b) the existing Creighton (East Deer Township) plant location of PPG Industries, Inc., and (c) the existing Creighton (East Deer Township) plant location of Columbia Cement Company

2. That applicant, Apollo Gas Company, its successors and assigns, shall not furnish natural gas service to the general public within the aforesaid areas without the approval of the Commission first had and obtained.

(Emphasis added).

In 1985, Apollo agreed to provide gas service to Eljer in Ford City. Eljer then constructed a gas line to connect to Apollo's pipeline there. Peoples filed a complaint with the PUC and subsequently obtained a preliminary injunction preventing Apollo from furnishing gas service to Eljer pending adjudication of the complaint. Peoples had been supplying gas to Eljer, and was aggrieved by the potential loss of its customer. Peoples claimed that Apollo's certificate of public convenience, supra, would be violated if Apollo were permitted to provide the gas service in question.

A PUC ruling upon Peoples' complaint ensued. The PUC interpreted Apollo's certificate of public convenience as allowing Apollo to provide service to Eljer. The certificate was construed as allowing any number of additional customers to be supplied by Apollo, without prior approval by the PUC, so long as Apollo did not hold itself out to the general public as ready and willing to supply any and all consumers who desire service. An appeal was taken to the Commonwealth Court, whereupon the PUC's order was reversed. Peoples Natural Gas Co. v. Public Utility Commission, supra. The Commonwealth Court reasoned that the PUC had disregarded the express language of the certificate which plainly restricted Apollo to serving only the three plants designated therein. We affirm.

[ 523 Pa. Page 374]

It is well settled that the scope of judicial review in PUC cases is quite limited. In the absence of an error of law or violation of constitutional rights, an order of the PUC must be upheld if it is supported by substantial evidence. Barasch v. Public Utility Commission, 507 Pa. 561, 566, 493 A.2d 653, 655 (1985); Monessen Southwestern Railway Co. v. Public Utility Commission, 507 Pa. 586, 589-90, 493 A.2d 666, 668 (1985). It cannot be said, however, that the PUC's interpretation of Apollo's certificate was supported by substantial evidence. The interpretation was, indeed, patently erroneous. There is simply no rational way in which the certificate can be read as allowing Apollo to provide service to Eljer. Certainly, much deference is to be accorded an agency's interpretations of its own regulations and orders. See generally Commonwealth v. Beck Electric Construction, Inc., 485 Pa. 604, 614, 403 A.2d 553, 558 (1979). In particular, where the interpretation of a certificate of public convenience issued by the PUC is at issue, it has been held that courts "will not set aside a construction placed upon the certificate by the commission unless the result is clearly erroneous, arbitrary, and unsupported by the evidence." Marmer v. Public Utility Commission, 190 Pa. Super. 436, 439, 154 A.2d 262, 264 (1959), allocatur denied November 20, 1959. See also Dillner Transfer Co. v. Public Utility Commission (No. 2), 175 Pa. Super. ...


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