Co., 67 P.U.R.4th 30, 90 (1985)(approving increase to the RTS Rate in contested rate proceeding).
In 1984, the PUC promulgated regulations that set forth in very specific detail the methodology to be used in assessing the cost effectiveness of load management programs and assuring that such programs and their associated costs are just and reasonable. 14 Pa. Bull. 4514 (Dec. 15, 1984); 52 Pa. Code § 69.121 et seq. These regulations require that all Pennsylvania electric utilities analyze their load management programs pursuant to this methodology and report the results of their analysis to the PUC each year. See id. Since that time, PP&L has analyzed its rebate and RTS Rate programs and reported the results to the PUC pursuant to these regulations. See Pennsylvania Power & Light Company, Annual Conservation and Load Management Reports 1985-1990.
In 1989, the BCE&EP directly considered the cost effectiveness of PP&L's programs while investigating complaints of the Pennsylvania Petroleum Association (representing home heating oil distributors) and state legislators regarding alleged anti-competitive effects of the very PP&L programs that are the subject of this lawsuit. The BCE&EP concluded from its investigation that the programs are "cost effective," "have no adverse impact on non-participants," and are "legitimate load management programs." 1989 BCE&EP Report. In reaching these conclusions, the BCE&EP stated that it was acting "on behalf of the Commission [PUC]" to "actively monitor the promotional activities of jurisdictional electric and gas utilities." Id. at 7 (emphasis in original).
Finally, in 1991, the PUC addressed the potential anti-competitive impact of utility promotional programs and went on to propose regulations clarifying the types of programs that the PUC considers to be in furtherance of Pennsylvania's load management policy and those that do not. 21 Pa. Bull. at 1840-45. These proposed regulations make clear that "utilities may offer rebates and other incentives to encourage demand management programs." 21 Pa. Bull. at 1842.
PP&L has demonstrated adequately Pennsylvania's active supervision of the programs at issue. The PUC has sufficient authority to supervise these programs and has gone well beyond the insurance commissions in Ticor in exercising that authority: The RTS Rate was specifically approved after two separate hearings, detailed methodologies have been developed and promulgated to evaluate the cost-effectiveness of such programs, the programs were assessed according to these methodologies and found to further Pennsylvania's load management policy, and new regulations are being developed to provide additional clarification on what type of programs further Pennsylvania's load management policy. This is ample evidence that Pennsylvania has "played a substantial role in determining the specifics of" PP&L's programs. Ticor II, 112 S. Ct. at 2177.
Plaintiffs seek to make much of the fact that only the BCE&EP has expressly recognized the cost-effectiveness of the rebate program, not the full PUC.
I do not share their concern. The BCE&EP is a bureau of the PUC charged by the Pennsylvania legislature with studying and researching all matters within the PUC's jurisdiction and advising the PUC on its findings. 66 Pa. Cons. Stat. Ann. § 308(c). In the 1989 BCE&EP Report, the bureau states that it "has accepted . . . an ongoing assignment in its mandates by Act 216 of the Pennsylvania Legislature" to "'maintain a continuing surveillance of the utilities' promotional activities' and [to] take appropriate action when warranted." 1989 BCE&EP Report at 6. In assessing PP&L's programs in that report, the BCE&EP was acting "on behalf of" the PUC to supervise utility promotional activities, applying the PUC's formally promulgated evaluation methodology. The PUC has neither overruled nor disagreed with the BCE&EP's conclusions in this regard.
The totality of the evidence shows that the PUC has devised a detailed scheme for the evaluation and supervision of electric utility load management programs such as PP&L's, is sensitive to potential anti-competitive impacts, is continually refining this scheme to make clearer programs that further the state policy, and relies, at least initially, upon the BCE&EP to supervise such programs. In this light, subjecting PP&L to the possibility of treble damages simply because only a PUC bureau, rather than the PUC commissioners, has found PP&L's programs cost-effective would be contrary to the principles of federalism and state sovereignty upon which Parker rests. For purposes of state action immunity, PP&L should be entitled to rely upon the PUC's apparently lawful supervision of these programs through the BCE&EP until the Supreme Court of Pennsylvania makes clear that the PUC cannot regulate such programs in this manner, or until the PUC makes clear that the BCE&EP is not acting on behalf of the PUC for such purposes. See Ticor, 922 F.2d at 1133-35. See also Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law § 212.4b (Supp. 1990).
Plaintiffs also contend that there can be no active supervision in this case because they cannot complain to the PUC about PP&L's alleged anti-competitive practices. The Commonwealth Court of Pennsylvania in Executone of Philadelphia, Inc. v. Pennsylvania Pub. Util. Comm'n, 52 Pa. Commw. 74, 415 A.2d 445 (1980), however, held differently. The court recognized that customers of a utility may complain to the PUC about the utility's alleged anti-competitive behavior. Id. 415 A.2d at 446. As there is uncontroverted evidence that at least 18 plaintiffs in this case are PP&L customers, see Affidavit of Thomas P. Arnold, I reject plaintiffs' contention. .
In summary, because I find that PP&L has satisfied both prongs of Midcal, I conclude that PP&L is immune from antitrust liability in this case under Parker, and I will enter judgment in favor of PP&L as to each of plaintiffs' antitrust claims.
The Yeager plaintiffs claim that PP&L's conduct not only violates the federal antitrust laws, but also section 1962(c) of RICO. 18 U.S.C.A. § 1962(c)(West 1984). To state a claim under this section, plaintiffs must allege a "pattern of racketeering activity." Id. See also Aydin Corp. v. RGB Sales, No. 89-8084, slip op., 1991 WL 152465 (E.D. Pa. Aug. 5, 1991)(Dubois, J.). A pattern of racketeering activity consists of at least two predicate acts of commission of an offense identified in the list found in 18 U.S.C. § 1961(1)(West 1984). See Aydin. Attempting to satisfy this requirement, plaintiffs aver in their amended complaint that PP&L has on at least two occasions violated the Pennsylvania Commercial Bribery statute, 18 Pa. Cons. Stat. Ann. § 4108(a)(Purdon 1983), which states:
Corrupt employee, agent or fiduciary. --An employee, agent or fiduciary commits a misdemeanor of the second degree when, without the consent of his employer or principal, he solicits, accepts, or agrees to accept any benefit from another person upon agreement or understanding that such benefit will influence his conduct in relation to the affairs of his employer or principal.
Plaintiffs aver that PP &L has run afoul of this statute by paying the cash incentives described above "to developers and/or builders and/or contractors who install heat pumps in new residential construction . . . ." Yeager Amended Complaint at P 64. For PP &L to have violated this statute, however, the cash incentives must have been paid to an employee, agent or fiduciary of someone from whom consent to accept the payments should have been but was not been obtained. See Aydin. Plaintiffs do not aver in their amended complaint that the "developers and/or builders and/or contractors" are employees, agents or fiduciaries of anyone from whom they were required to obtain consent before accepting the payments. Thus, plaintiffs have not sufficiently pled a predicate act under 18 U.S.C.A. § 1961(c); plaintiffs have failed to state a cause of action under RICO, and I will dismiss plaintiffs' RICO count. See Fed. R. Civ. P. 12(b)(6); Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957).
IV. State Law Claims
The Losch plaintiff claims that PP &L's actions "constitute civil conspiracy and unfair methods of competition, in violation of Pennsylvania law." Losch Complaint at P 47. My discharge of the Losch plaintiff's federal antitrust claims, however, extinguishes this Court's jurisdiction to hear these pendent state law claims. See Lovell Manuf. v. Export-Import Bank of the United States, 843 F.2d 725, 735 (3d Cir. 1988) ("Absent 'extraordinary circumstances' a district court in this circuit is powerless to hear claims lacking an independent jurisdictional basis, and 'time already invested in litigating the state cause of action is insufficient reason to sustain the exercise of pendent jurisdiction.'" (quoting Weaver v. Marine Bank, 683 F.2d 744 (3d Cir. 1982)). Hence, I will dismiss the Losch plaintiff's pendent state claims.
An appropriate Order follows.
AND NOW, this 28th day of August, 1992, upon consideration of Defendant's Motion for Summary Judgment, all papers filed in support thereof and in opposition thereto, and oral argument held thereon, IT IS HEREBY ORDERED that:
1. JUDGMENT is entered FOR DEFENDANT and AGAINST
all PLAINTIFFS as to all antitrust claims in both Yeager's Fuel, Inc. v. Pennsylvania Power & Light Co., No. 91-5176, and Losch Boiler Sales & Service Co. v. Pennsylvania Power & Light Co., No. 92-2359;
2. The RICO claims in Yeager's Fuel, Inc. v. Pennsylvania Power & Light Co., No. 91-5176, are DISMISSED;
3. The pendent state law claims in Losch Boiler Sales & Service Co. v. Pennsylvania Power & Light Co., No. 92-2359, are DISMISSED for lack of subject matter jurisdiction; and
4. The Clerk of the Court shall mark this case CLOSED.
BY THE COURT:
JOHN R. PADOVA, J.