PECO Energy Co. v. Pennsylvania Public Utility Commission

791 A.2d 1155, 568 Pa. 39, 2002 Pa. LEXIS 508
CourtSupreme Court of Pennsylvania
DecidedMarch 20, 2002
Docket22 MAP 2001, 23 MAP 2001
StatusPublished
Cited by30 cases

This text of 791 A.2d 1155 (PECO Energy Co. v. Pennsylvania Public Utility Commission) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
PECO Energy Co. v. Pennsylvania Public Utility Commission, 791 A.2d 1155, 568 Pa. 39, 2002 Pa. LEXIS 508 (Pa. 2002).

Opinion

OPINION

NEWMAN, Justice.

Beneath the streets of Philadelphia lie miles and miles of gas pipelines, water and sewage conduits, electrical wiring, and telephone and television cables. When the city undertakes a street reconstruction project, these subsurface facilities, which are vital components of a system that delivers crucial utility services, often stand in the path of the city’s proposed work, and they must be protected, relocated, or removed. Without this utility work, street reconstructions would be unable to proceed. Conversely, but for the city street construction, the incidental utility work would not be necessary. Responsibility for the payment of the expense of *43 protecting, relocating or removing these facilities is a matter of frequent dispute.

Because of the aforementioned situation, the Pennsylvania Public Utility Commission (Commission) appeals from an Order of the Commonwealth Court that vacated and remanded an Order of the Commission entered on April 5, 1999. The Commission Order granted the exceptions of the Pennsylvania Department of Transportation (Department) to a Recommended Decision of an Administrative Law Judge (ALJ) that imposed upon the Department the cost of relocating utility facilities located within a public right-of-way owned by the PECO Energy Company (PECO) and Bell Atlantic (Bell). 1 The Commission Order required PECO and Bell to bear 100% of their own respective relocation costs, which were impacted by a rail-highway crossing improvement project along Delaware Avenue in the City of Philadelphia. The effect of the Commonwealth Court decision was to reinstate the imposition of the cost of relocation of the PECO and Bell facilities upon the Department, except for any betterment to the utility facilities. We granted allocatur to determine whether the Commission may consider, among other factors, the rationale underlying the common law rule in rendering a decision regarding cost allocation and whether the decision of the Commission, with or without this consideration, was sufficient to sustain the objections of the Department.

FACTS AND PROCEDURAL HISTORY

On September 3, 1997, the Department filed an application with the Commission to reconstruct Delaware Avenue, in the City of Philadelphia, to remove old railroad tracks and effect base repairs, drainage improvements and resurfacing. The purpose of this reconstruction was to afford a more controlled, orderly and safe traffic operational pattern in this area. The railroad tracks located within the project limits are owned by the Consolidated Rail Corporation (Conrail), and have been predominantly resurfaced. In 1986, in a proceeding before *44 the Interstate Commerce Commission, Conrail was granted authority to abandon the twenty-three rail-highway crossings that are the subject of this appeal.

The Commission, by letter dated November 20, 1997, approved the Department’s application. Approval of the project meant that any utility using the public right-of-way along this portion of Delaware Avenue, would have to relocate its facilities. PECO, Bell, the Philadelphia Gas Works, and the City of Philadelphia (City) all maintain facilities within the public right-of-way inside the project area. The Department and Conrail entered into a stipulation whereby Conrail agreed to pay the Department approximately $460,000.00 towards the project. Subsequently, the Department entered into stipulations with various municipal utilities to share the costs of relocation of their facilities that would be impacted by the reconstruction. The Department, however, did not enter into agreements with either PECO or Bell to share the costs of relocating any of their facilities located in the rights-of-way along Delaware Avenue. Consequently, both sought reimbursement from the Department for all costs actually incurred in connection with the removal and replacement of the PECO and Bell facilities; PECO sought $2,590,704.00 and Bell, $108,000.00. While the Department was using federal and state monies to fund the project, the Department had not applied for any federal funding to cover relocation costs for non-municipal public utilities and, therefore, refused to agree to reimburse PECO and Bell for the aforementioned costs.

The ALJ conducted a pre-hearing conference on February 24,1998, and a full evidentiary hearing on March 24,1998. At the hearing, the ALJ admitted into evidence exhibits submitted by the City, the Department, PECO, Bell and Conrail. Further, a number of late-filed exhibits were admitted after the hearing. 2 It was established that PECO had facilities *45 located in the Delaware Avenue right-of-way, but no documentary evidence was submitted in the form of permits to substantiate or define PECO’s authorization to place and maintain its facilities in the public right-of-way. On November 30, 1998, the ALJ issued a Recommended Decision containing thirty-eight findings of fact and five conclusions of law, and decided that the Department should reimburse PECO and Bell in full for their relocation expenses, minus any betterment to their facilities. The ALJ considered the following as a basis for his Recommended Decision: (1) benefits received by the ratepayers of the particular utility; (2) the availability of state and/or federal funding for the project; (3) imposing costs upon the party responsible for the situation (typically referred to as the “cost causer”); and (4) any additional equities relevant to the particular situation. The Department filed exceptions with the Commission, which filed an Order on April 5, 1999, now at issue in the matter before this Court. Cost allocation was the only issue before the Commission.

The Commission concluded that the Recommended Decision of the ALJ was not just and reasonable, granted the exceptions filed by the Department, and ordered PECO and Bell, at their sole cost and expense, to furnish all material and labor to alter, relocate» or remove their facilities from the project area. This decision was based on several factors including the following: (a) that PECO and Bell receive a substantial benefit from locating their facilities in a public right-of-way; (b) that there were no federal funds available to reimburse PECO and Bell because federal funding is only available to the Department to cost share with municipal, non-carrier public utilities; (c) that although the Department was the “cost causer” behind the project, the Department is not required to wait until utility facilities have reached the end of their useful lives to undertake a project of this type where public safety *46 and design improvements are needed; and (d) such a decision was consistent with previous Commission adjudications on this issue.

On April 20, 1999, PECO requested reconsideration of the April 5, 1999 Order of the Commission. By Order adopted June 24, 1999, the Commission determined that the issues raised by PECO in support of its request that the Commission reconsider its April 5, 1999 Order were not new and novel arguments that would persuade the Commission to reverse or amend its earlier Order. PECO appealed to the Commonwealth Court.

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Cite This Page — Counsel Stack

Bluebook (online)
791 A.2d 1155, 568 Pa. 39, 2002 Pa. LEXIS 508, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peco-energy-co-v-pennsylvania-public-utility-commission-pa-2002.