Drexelbrook Associates v. Pennsylvania Public Utility Commission

212 A.2d 229, 206 Pa. Super. 121, 1964 Pa. Super. LEXIS 1038
CourtSuperior Court of Pennsylvania
DecidedDecember 31, 1964
DocketAppeals, Nos. 29, 30, and 31
StatusPublished
Cited by1 cases

This text of 212 A.2d 229 (Drexelbrook Associates v. Pennsylvania Public Utility Commission) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Drexelbrook Associates v. Pennsylvania Public Utility Commission, 212 A.2d 229, 206 Pa. Super. 121, 1964 Pa. Super. LEXIS 1038 (Pa. Ct. App. 1964).

Opinion

Opinion by

Ervin, J.,

The order of the commission refusing the transfer of gas, electric and water facilities denies appellant, Drexelbrook Associates, rights to which it is clearly entitled under the existing law, and constitutes an abuse of discretion by the commission.

The record in this case shows there are many instances where landlords and owners of large apartments and office buildings purchase utility service on a wholesale basis and furnish such service to their office or apartment tenants. Appellant’s Exhibit No. 5 lists a large number of apartment houses and developments where single point metering of electric, gas and water service is furnished the landlord by the utilities. Included among these are the Presidential Apartments, Rittenhouse Claridge, Rittenhouse Savoy, in Philadelphia, and Lynnewood Gardens in Montgomery County, the latter containing 1,796 apartment units compared to appellant’s 1223 apartments.

It is evident that the owner of a clearly defined apartment house development, by furnishing gas, electricity and water exclusively to tenants is not a public utility, subject to commission jurisdiction, under §2, subsections 17(a) and (b) of the Public Utility Law, 66 PS §1102. The reason for this is that the landlord is not furnishing service “to or for the public for compensation” (emphasis supplied) within the meaning of the statute. Drexelbrook is a private, as opposed to a public, enterprise, and its facilities are available only [124]*124to tenants of Drexelbrook. Tbe commission erred in holding that tbe proposed transfer would constitute appellant a public utility subject to commission jurisdiction, and that appellant bad tbe burden of proving it would not be a public utility in rendering sucb services to its tenants.

Tbe opinion of Judge Watkins errs in assuming that tbe transfer of the physical facilities here involved would remove a segment of the general public from tbe jurisdiction of tbe commission. Tbe tenants of appellant are not part of tbe general public served by tbe utility, but rather are a well defined and exclusive group, clearly distinguishable and removed from the general public. As Chairman Sharfsin said in bis dissenting opinion, “Tbe community consists of tenants and tenants only.”

Tbe law is settled that where service is rendered not to tbe general public, but to a defined and exclusive group, including tenants, sucb service is private in nature and not subject to commission jurisdiction: Overlook Development Co. v. P.S.C., 101 Pa. Superior Ct. 217, 225, affirmed per curiam, 306 Pa. 43, 158 A. 869; Borough of Ambridge v. P.S.C., 108 Pa. Superior Ct. 298, 306, 165 A. 47. In Aronimink Transportation Co. v. P.S.C., 111 Pa. Superior Ct. 414, 170 A. 375, this Court ruled that a corporation owning 288 apartments and furnishing bus transportation to some 800 tenants was not a public utility by virtue of the bus service to a large number of tenants, but rather a private service which did not embrace all members of tbe public, nor did sucb service make tbe private corporation a common carrier. We there held, at page 419, that tbe service rendered tenants was “merely incidental to the main business of maintaining the apartment bouses.” Whether or not appellant would be a public utility is determined not by tbe landlord and tenant relationship, but by tbe character and extent of tbe service.

[125]*125If the facilities here involved had been originally installed by the landlord under ' single metering and wholesale rates granted to the landlord by the utilities, there would be no doubt of the validity of the transaction. As the record in this case shows, such operations exist today in many large apartment buildings in Pennsylvania. The circumstance that the landlord now seeks single meter and wholesale rates should make no difference in the result. What is legal in one case does not thereby become invalid in the other. The sequence of events should not be controlling.

It is important to note there was no opposition to the proposals of the gas, electric and water eompanys to transfer facilities to the appellant landlord and give it the benefit of single meter service. Letters of consent were obtained from all tenants in which the landlord agreed to charge the same rate to the tenant as the utility charged the tenant. The petitioning utilities entered into specific contracts with the appellant whereby the appellant would maintain distribution facilities to tenants and receive from the utilities the benefit of wholesale and single meter rates.

While commission approval of the transfer of the facilities here involved may have been necessary, under §202 (e) of the Public Utility Law, 66 PS §1122, the commission erred in holding the transferee would become a utility and would be required to seek “Commission authorization to furnish the public utility services now performed by applicants. . . .” Nor, from a realistic standpoint, would. the applicant utilities be required to seek commission approval, under §202(d)-, 66 PS §1122, for “abandonment of service” to Drexelbrook tenants, as the commission implies. Service is not here being abandoned by the utilities, but simply continued on a different basis. In any event, all parties consented to the changeover, and the commission cannot arbitrarily withhold its approval in this case.

[126]*126The commission order in this case deprived appellant of the benefit of wholesale rates to which it is entitled under the published tariffs of the petitioning utilities. Rule 13.1 of the electric and gas tariffs reads as follows: “Resale of Service: A Customer may resell energy [gas] purchased from the Company under a single contract at one application of an available rate when the purchased energy ... is the exclusive source of the Customer’s supply, is for the total requirements of the premises served, and the location and use of the resold energy conforms to the availability requirements of the Tariff for supply to Customer for his own account.” In Pa. P.U.C. v. Phila. Elec. Co., 23 Pa. P.U.C. 320, the commission approved the resale and submetering of electric current by a landlord of an office building to tenants.

As regards water facilities, the right of appellant to single point water meter service is especially clear. Appellant proposes to furnish water service to tenants free, i.e., as part of the rent, in the same manner as it has in the past. In Phila. Suburban Water Co. v. Pa. P.U.C., 164 Pa. Superior Ct. 320, 64 A. 2d 500, this Court affirmed an order of the Commission that an apartment development, known as Colonial Cardens, and consisting of some 186 units in 11 buildings, was a “commercial” consumer and entitled to single point water meter service.

The fact that many of the apartment house developments do not submeter the electricity or gas furnished tenants is, also, not controlling. Appellant should not be penalized because of the sequence of events or because submetering places their rental charges for gas and electricity on a more equitable basis. The commission retains jurisdiction over the rates charged appellant by the producing utilities. The tenants are protected from unreasonable charges under their contracts with appellant. As a practical matter, the rates charged the tenants are geared to the rates charged the [127]*127landlord, whose main business is renting space. Economic competition in this field would prevent the landlord from making any unconscionable profit from utility charges.

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Bluebook (online)
212 A.2d 229, 206 Pa. Super. 121, 1964 Pa. Super. LEXIS 1038, Counsel Stack Legal Research, https://law.counselstack.com/opinion/drexelbrook-associates-v-pennsylvania-public-utility-commission-pasuperct-1964.