This Opinion Substituted on Grant of Reconsideration for Withdrawn Opinion of October 16, 1997, Previously
Before: Honorable Doris A. Smith, Judge, Honorable Dan Pellegrini, Judge, Honorable Emil E. Narick, Senior Judge. Opinion BY Judge Pellegrini.
The opinion of the court was delivered by: Pellegrini
OPINION BY JUDGE PELLEGRINI
AT&T and Sprint Communications Company L.P. (Sprint) appeal an order of the Pennsylvania Public Utility Commission (Commission) denying them reimbursement of their costs for relocating fiber optic cables at five rail-highway crossings. *fn1
This case emanates from the need by Delaware and Hudson Railway Company, Inc. (Delaware and Hudson) to lower railroad tracks at a number of rail-highway crossings in northeastern Pennsylvania to accommodate double stack container railroad cars. Because the Pennsylvania General Assembly wanted to promote commerce within the Commonwealth by modernizing its railways, it enacted legislation to subsidize rail freight carriers to undertake a rail clearance project that would allow the railroads to double stack container cars on the rail lines. To subsidize Delaware and Hudson in the rail lowering project at three below-grade rail-highway crossings in the City of Scranton and at two below-grade rail-highway crossings in Nicholson Township, a Rail Clearance Agreement was entered into between the Commonwealth of Pennsylvania, acting through the Department of Transportation (Commonwealth), Consolidated Rail Corporation (Conrail) and Delaware and Hudson. The Commonwealth agreed to fund up to 30% of Delaware and Hudson's and Conrail's costs in completing the project, subject to a spending cap of $1,260,000 for alterations to their portion of the project, which involved the track from the New York state line to Control Point Burn in the City of Allentown.
On October 6, 1993, Delaware and Hudson filed an application with the Commission *fn2 requesting exemptions from the 22-foot minimum overhead clearance above a railroad track as required by 52 Pa. Code § 33.121(a) *fn3 at three crossings in the City of Scranton *fn4 and at two below-grade rail-highway crossings in Nicholson Township which cross over the 3,600 foot long Nicholson Tunnel. *fn5 At the five crossings, fiber optic cables of either AT&T or Sprint or both, which were previously installed, were required to be relocated as a result of lowering the tracks. The Commission issued an interim order approving the requested exemptions and instructing Delaware and Hudson to advise the Commission when the alterations were completed so that a formal hearing could be held to determine the allocation of costs incurred among the parties as a result of the alterations. *fn6 However, until that time, the Commission ordered each party to bear its own costs of reconstruction and relocation.
The fiber optic cables were located in the Delaware and Hudson right-of-way as a result of agreements entered into with Guilford Transportation Industries, Inc. (Guilford) or its subsidiary, D&H. *fn7 Sprint (previously U.S. Telecom, Inc.) and Guilford entered into a Fiber Optic Easement Agreement (Easement Agreement) in 1986 that allowed Sprint to place its cables in the Delaware and Hudson right-of-way. Under the Easement Agreement, the crossings that affected Sprint's cables were along the right-of-way at the Linden Street rail-highway crossing in Scranton and in the Nicholson Tunnel. If Sprint were required by Guilford to move its cables, it would be reimbursed its costs by Guilford. *fn8 In 1990, AT&T entered into a similar agreement with Guilford's subsidiary, D&H. *fn9 Unlike Sprint, AT&T agreed to relocate its cables at its own cost and expense if D&H deemed it necessary. *fn10
As a result of the Commission's order that each party was to bear its own costs, Sprint relocated its cables along Delaware and Hudson's right-of-way and temporarily in the Nicholson Tunnel at a total cost of $232,353.81. AT&T relocated its cables along the right-of-way and temporarily in the Nicholson Tunnel at a total cost of $136,451. AT&T and Sprint intended to share the cost for permanently relocating their cables in a shared common facility in the Nicholson Tunnel, *fn11 at an expected total cost of $1,654,217.25.
After the alterations were completed, a hearing was held before an Administrative Law Judge (ALJ) regarding the allocation of costs incurred by Delaware and Hudson, AT&T and Sprint. AT&T and Sprint argued that the Commission did not have jurisdiction to allocate costs, but if it did, they were entitled to 100% reimbursement of their costs of relocating their cables, including those associated with relocating their cables throughout the entire length of the Nicholson Tunnel. They argued that they were forced to relocate their cables, did not benefit from the relocation, and the Commission had previously reimbursed costs in similar situations. Additionally, they argued that there were state and federal funds available, specifically, those funds given by the Commission to Delaware and Hudson to pay their costs.
The ALJ initially determined that the Commission had subject matter jurisdiction over all of the rail-highway crossings, but specified that it did not have jurisdiction over the entire 3,600 feet of the Nicholson Tunnel, only over the crossings at the points where the highways physically crossed over the tunnel. She then found that the Commission had jurisdiction over the allocation of costs, and considered various factors *fn12 in deciding whether any of the parties were entitled to reimbursement of their costs, including that there were no government funds available for reimbursement. While she considered the Easement Agreement between AT&T and D&H in allocating costs, the ALJ stated that "due to the uncertain applicability and interpretation of any potential cost apportionment agreements regarding Sprint's relocation costs ... I shall not look to the words of either the March 25, 1986 easement agreement or the July 13, 1990 asset purchase agreement." *fn13 (ALJ's recommended decision at pp. 49-50.) Concluding that none of the factors warranted that any of the relocation costs of either AT&T or Sprint be borne by Delaware and Hudson, the ALJ recommended to the Commission that Delaware and Hudson, as well as AT&T and Sprint, were each responsible for their own costs. The Commission adopted the recommended decision of the ALJ and this appeal by AT&T and Sprint followed. *fn14
AT&T and Sprint contend that the Commission's order contains no rationale for denying their relocation costs. *fn15 Specifically, they argue that because the findings the Commission made as part of its determination were unsupported by the evidence and no ...