Somerset Rural Electric Cooperative, Inc. v. Pennsylvania Public Utility Commission

641 A.2d 1249, 163 Pa. Commw. 499, 1994 Pa. Commw. LEXIS 191
CourtCommonwealth Court of Pennsylvania
DecidedApril 20, 1994
StatusPublished

This text of 641 A.2d 1249 (Somerset Rural Electric Cooperative, 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
Somerset Rural Electric Cooperative, Inc. v. Pennsylvania Public Utility Commission, 641 A.2d 1249, 163 Pa. Commw. 499, 1994 Pa. Commw. LEXIS 191 (Pa. Ct. App. 1994).

Opinions

SILVESTRI, Senior Judge.

Somerset Rural Electric, Inc. (Somerset) appeals an order of the Pennsylvania Public Utility Commission (PUC) which granted summary judgment in favor of the Pennsylvania Electric Company (Penelec), dismissed Somerset’s exceptions from the initial decision of an administrative law judge (ALJ) and ordered that Somerset be prohibited from providing electric service in the Borough of Jennerstown (Jennerstown), Somerset County.

On May 9,1991, Penelec filed a petition for declaratory order (petition) with the PUC seeking an order declaring its exclusive right to furnish retail electrical service in Jenners-town and directing that Penelec be exclusively authorized to furnish electric service to the Jennerstown Speedway (Speedway).

In its petition, Penelec made the following averments of fact. Pursuant to a certificate of public convenience dated September 8, 1930 and an ordinance enacted by Jenners-town on June 13,1930, Penelec has furnished retail electric service to various customers in Jennerstown. It has furnished retail electrical service to Speedway since May of 1968. On June 19, 1990, Speedway requested additional retail electrical service from Penelec to its facility. On July 12, 1990, Penelec gave Speedway a cost estimate of approximately $12,000 to $14,000 for the additional service.

Penelec averred that Somerset, a “rural electric cooperative corporation,” which furnishes retail electric service to its members in portions of Somerset County, began providing retail electrical service for the first time in Jennerstown to Speedway in 1990.1 Penelec averred that Somerset’s service in Jennerstown to Speedway was “unlawful and inconsistent with the fundamental purpose of rural electric cooperatives_” (R.R. 8a). Specifically, Penelec argued that Somerset, being an electrical cooperative governed by the Pennsylvania Electric Cooperative Law (Cooperative Law), 15 Pa.C.S. §§ 7301-7359, could only provide electrical service to its members and that membership was restricted to “[a]ll persons in rural areas ... who are not receiving central station services.” 15 Pa.C.S. § 7324.2 Penelec asserted that [1251]*1251because all of Jennerstown, including the Speedway, had been receiving "central station service” from it, neither were eligible for membership in Somerset and that therefore, Somerset could not lawfully serve Speedway.

On June 3, 1991, Somerset filed a motion to dismiss Penelec’s petition arguing that the PUC lacked jurisdiction over it. The PUC denied Somerset’s motion to dismiss on August 29, 1991, and ordered that Penelee’s petition be assigned to an ALJ.

Thereafter, Penelec filed a motion for summary judgment with the ALJ again asserting the arguments made in its petition and asserting that, as a matter of law, it was entitled to judgment. Somerset, in its answer to Penelec’s summary judgment motion, again asserted the PUC’s lack of jurisdiction over the matter.

On April 17,1992, the ALJ issued its initial decision granting Penelec’s motion for summary judgment.3 The ALJ, in accepting Pe-nelec’s argument, concluded that because Somerset could only provide electrical service to its members pursuant to Section 7321(a)(1) of the Cooperative Law,4 and that because neither Speedway, nor any other recipient of electrical service within Jenners-town, was eligible for membership in Somerset pursuant to Section 7324 of the Coopera-five Law,5 Somerset’s attempt to provide service to Speedway was improper as a matter of law.6 Somerset filed exceptions to the ALJ’s decision with the PUC; on December 21, 1992, the PUC denied Somerset’s exceptions and adopted the ALJ’s initial decision granting summary judgment in favor of Pe-nelec.

On appeal,7 Somerset sets forth a number of allegations of error, all of which can be reduced to two essential claims. First, Somerset argues that the PUC had no jurisdiction over it and that therefore, its attempt to render a determination in this matter was in error. Second, Somerset asserts that if the PUC did validly exercise jurisdiction in this ease, it erred in concluding that Somerset was prohibited from providing service within Jennerstown. We will address each of these issues separately.

As previously noted, Somerset, as an electric cooperative, is subject to the Cooperative Law. Somerset cites several provisions of the Cooperative Law as support for its assertion that the PUC lacks jurisdiction over it. Section 7334, 15 Pa.C.S. § 7334, provides:

Except as provided in Subchapter C (relating to unincorporated area certified territory), all electric cooperative corporations subject to this chapter shall be exempt in [1252]*1252any and all respects from the jurisdiction and control of the Pennsylvania Public Utility Commission.

Subchapter C contains nine sections, 15 Pa. C.S. §§ 7351-7359, the first of which, § 7351, provides as follows:

(a) General rule. — This subchapter shall apply only to the establishment of boundaries of certified territory between retail electric suppliers where one supplier is an electric cooperative corporation and the other supplier is subject to the jurisdiction of the Pennsylvania Public Utility Commission for rates, terms and conditions for electric service.

Somerset argues that the PUC only has jurisdiction over electrical cooperatives where Subchapter C applies. Somerset asserts that Subchapter C does not apply here because Subchapter C applies only to the PUC’s drawing boundary lines within certified territories and Jennerstown is not within a certified territory.8

The PUC looked to Section 7358 of Sub-chapter C of the Cooperative Law as providing authority for its exercise of jurisdiction in this matter. Section 7358 provides as follows:

Upon proceedings brought by an interested person or by action of the Pennsylvania Public Utility Commission, the commission shall have the jurisdiction to enforce compliance with this subehapter and shall have jurisdiction to prohibit the furnishing of retail electric service by any retail electric supplier191 except in its certified territory or territories or where lawfully serving and, in connection with the enforcement and prohibition, to exercise all powers granted by this subehapter or otherwise to the commission.

Specifically, the PUC relied upon Section 7358 granting it, in addition to jurisdiction to enforce Subchapter C, “jurisdiction to prohibit the furnishing of retail electric service by any retail electric supplier [here Somerset] except in its certified territory or territories or where lawfully serving.” (Emphasis added).10 Here, the issue before the PUC was whether Somerset was properly or “lawfully” serving Speedway. The PUC, through the exercise of its jurisdiction, prohibited Somerset from furnishing retail electric service in Jennerstown because it concluded that Somerset could not “lawfully” do so. If this determination was proper, then the PUC’s exercise of jurisdiction, as set forth in 7358, was proper. We therefore turn to the issue of whether the PUC’s determination that Somerset’s service to Speedway was not lawful was in error.

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643 F. Supp. 1345 (N.D. Georgia, 1986)
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121 A. 488 (Supreme Court of Pennsylvania, 1923)
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393 Pa. 639 (Supreme Court of Pennsylvania, 1958)
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598 A.2d 627 (Commonwealth Court of Pennsylvania, 1991)

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Bluebook (online)
641 A.2d 1249, 163 Pa. Commw. 499, 1994 Pa. Commw. LEXIS 191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/somerset-rural-electric-cooperative-inc-v-pennsylvania-public-utility-pacommwct-1994.