Diamond Energy, Inc. v. Pennsylvania Public Utility Commission

653 A.2d 1360, 1995 Pa. Commw. LEXIS 35
CourtCommonwealth Court of Pennsylvania
DecidedJanuary 13, 1995
StatusPublished
Cited by9 cases

This text of 653 A.2d 1360 (Diamond Energy, Inc. v. Pennsylvania Public Utility Commission) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Diamond Energy, Inc. v. Pennsylvania Public Utility Commission, 653 A.2d 1360, 1995 Pa. Commw. LEXIS 35 (Pa. Ct. App. 1995).

Opinions

KELTON, Senior Judge.

Diamond Energy, Inc. (Diamond), a producer of coal-fueled electric energy, petitions for review of the Pennsylvania Public Utility Commission’s (PUC’s) February 25, 1994 order approving Metropolitan-Edison Company’s (Met-Ed’s) application to begin construction of a 152-megawatt combustion turbine electric generating unit fueled by natural gas. The PUC also denied Diamond’s request for an evidentiary hearing andt its motion to compel discovery.1 We affirm.2

Section 519 of the Public Utility Code (Code), 66 Pa.C.S. § 519, provides as follows:

(a) General Rule. — Only upon the application of a public utility and the approval of the application by the commission shall it be lawful for the utility to begin the construction of an electric generating unit fueled by oil or natural gas.
(b) Review by commission. — Every application shall be made to the commission, in writing, and shall be in the form and contain the information the commission requires by its regulations. The commission shall approve an application if, after reasonable notice and hearing, the affected public utility proves, and the commission finds, any of the following:
(1) There are no reasonably available sites on luhich a unit or units of comparable capacity fueled by coal, a synthetic derived in whole or in part from coal or a mixture which includes coal or is derived in whole or in part from coal could be operated in compliance ivith present and reasonably anticipated environmental laws and regulations.
(2) There is a strong probability that construction and subsequent operation of a unit or units of comparable capacity fueled by coal, a synthetic derived in whole or in part from coal or a mixture which includes coal or is derived in whole or in part from coal ivould be more costly■ to ratepayers over the useful life of the nonoil or nongas unit or units than would construction and subsequent operation of the unit proposed by the utility.
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(d) Time limit on commission review. — If the commission fails to approve or disapprove an application within six months after the date on which the application is filed, it shall be lawful for the affected utility to construct the proposed electric generating unit as though the commission had approved the application.

66 Pa.C.S. § 519(a), (b) and (d) (emphasis added).

PROCEDURAL BACKGROUND

On August 11, 1993, Met-Ed filed an application requesting approval to begin construc[1363]*1363tion of a 152-megawatt combustion turbine electric generating plant fueled by natural gas at its Portland Generation Station site in Upper Mount Bethel Township, Northampton County (the Portland Project).

On September 16, 1993, Diamond filed a petition to intervene, protest to the application, and petition for an order directing MetEd to purchase equivalent capacity from Diamond’s coal-fueled electric generating unit project (the Clearfield Project). (R.R. 34-40a.) Therein, Diamond alleged, inter alia, that the Clearfield Project (1) is a reasonably available site for a unit which complies with environmental laws and regulations as required under Section 519(b)(1); (2) will over its life be more cost-effective to ratepayers than Met-Ed’s proposed gas-fueled unit as required under Section 519(b)(2); and (3) should be given preference as one of the three finalists chosen by Met-Ed to be in the preliminary selection group of its competitive procurement program.

On October 12, 1993, Met-Ed filed an answer opposing Diamond’s petition to intervene, asserting that (1) Met-Ed’s competitive procurement program was never designed to procure capacity other than that approved by the PUC in its December 12, 1991 order3 and that it was not precluded from privately negotiating for peaking capacity; (2) the Clearfield Project would not constitute capacity comparable to the Portland Project since the latter would supply peaking capacity and the former would supply baseload capacity unsuited for peaking requirements;4 (3) the Clearfield Project would be too distant to contribute to localized eastern Pennsylvania grid voltage regulation because Diamond would have to construct miles of high voltage transmission line facilities in order to connect to Met-Ed’s transmission grid; and (4) the Portland Project was more cost-effective than the Clearfield Project.

On October 28, 1993, Diamond filed a response and request for a hearing, contending that Meb-Ed failed to rebut Diamond’s contention that the Clearfield Project was a reasonably available site for a unit of comparable capacity fueled by coal which could be operated in compliance with environmental laws and regulations. Diamond further contended that MelxEd’s factual claims that its project was more cost effective were based on disputed assumptions requiring a hearing.

On November 19, 1993, Met-Ed filed a reply to Diamond’s request for a hearing, arguing that the latter’s request was premature as it had not yet established standing to pai’ticipate in the application proceeding. Met-Ed also asserted that an adverse decision by the PUC on its application could not be used to compel it to accept the Clearfield project and that competitive bidding and approval of the Clearfield Project were outside of the scope of a Section 519 proceeding. On November 30, 1993, Diamond responded to Met-Ed’s reply and asserted that a hearing was necessary to resolve factual disputes over cost questions.

On December 3, 1993, PUC Secretary John G. Alford issued a secretarial letter, inter alia, stating why an oral hearing was unnecessary:

In the Commission’s judgment, the resolution of these economic and technical issues is not likely to turn on witness credibility. Therefore, we will not schedule any oral proceedings before an ALJ [adminis[1364]*1364trative law judge]. Nevertheless, in order to develop an agency record in this proceeding it will be necessary to set a briefing schedule which also provides for the submission of supporting affidavits.

(R.R. 89a.) Also in the letter, he directed the parties to address the following questions: the standards to be satisfied by an application in a Section 519 proceeding; standing; the appropriate definition of “comparable capacity;” a comparison of gas-powered units and coal-powered units; and the cost and ability of both units to meet all environmental requirements.

By letter dated December 17, 1993, Diamond requested that Met-Ed provide certain information regarding the latter’s system and the Portland Project. Met-Ed objected to that request and as a result, Diamond filed a motion to compel discovery on January 4, 1994. Met-Ed filed a response to that motion on January 10, 1994. In its February 25, 1994 opinion and order, the PUC approved Met-Ed’s application and denied Diamond’s motion to compel discovery, holding that Diamond failed to file the motion in a timely manner, given the six-month time frame in which the proceeding must be completed. (PUC’s Opinion and Order at 12, n. 9.)

When the PUC failed to act on Diamond’s March 7, 1994 petition for rehearing (Appendix to Diamond’s Reply Brief), Diamond filed a timely appeal with this Court.

ISSUES

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Bluebook (online)
653 A.2d 1360, 1995 Pa. Commw. LEXIS 35, Counsel Stack Legal Research, https://law.counselstack.com/opinion/diamond-energy-inc-v-pennsylvania-public-utility-commission-pacommwct-1995.