York v. Pennsylvania Public Utility Commission

295 A.2d 825, 449 Pa. 136, 1972 Pa. LEXIS 358
CourtSupreme Court of Pennsylvania
DecidedOctober 4, 1972
DocketAppeal, No. 52
StatusPublished
Cited by46 cases

This text of 295 A.2d 825 (York 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
York v. Pennsylvania Public Utility Commission, 295 A.2d 825, 449 Pa. 136, 1972 Pa. LEXIS 358 (Pa. 1972).

Opinion

Opinion by

Mr. Justice Roberts,

This is an appeal from an order of the Commonwealth Court affirming an order of the Pennsylvania Public Utilities Commission [hereinafter P.U.C. or Commission] approving the merger of three telephone companies. The Commonwealth Court’s order also denied a request by the Attorney General of Pennsylvania to intervene as an appellant in the proceedings in the Commonwealth Court. For the reasons which we shall set forth in full below, we affirm the order of the Commonwealth Court.

I

The controversy which is the basis of this appeal originated in 1966 when the General Telephone Company of Pennsylvania [hereinafter General], the York Telephone and Telegraph Company [hereinafter York Co.] and the Princeton Telephone Company [hereinafter Princeton], pursuant to Section 202 of the Public Utility Law,1 applied to the P.U.C. for a certificate of public convenience approving their proposal to merge York and Princeton into General. The three telephone companies are each owned by the same holding company, General Telephone and Electronics Corporation, [139]*139and the same individual serves as president of all three companies. The City of York and the County of York [hereinafter complainants] filed complaints with the P.TJ.C. against the telephone companies’ application. In addition, the City and County of York also filed complaints directed against York Co.’s redemption, as a part of the merger plan, of its first mortgage bonds.

On October 3 and 4,1967, hearings were held before a P.TJ.C. examiner on the application and complaints. Following presentation of evidence by the applicants, the hearings were continued until a future date.

After a considerable delay caused in part by a dispute over certain discovery that was sought by complainants, a further hearing was held before an examiner on March 5, 1969. Thereafter the matter of the application and complaints was argued before the Commission. On December 21, 1970, the P.TJ.C. issued its order approving the merger and dismissing the complaints of the City and County of York.

Complainants pursued an appeal to the Commonwealth Court from the P.TJ.C.’s December 21, 1970, order, and obtained a supersedeas staying the Commission’s order pending the Commonwealth Court’s decision on the merits of the appeal. General, York Co., and Princeton were permitted to intervene as party appellees in the appeal of the City and County of York.

On May 3, 1971, the Attorney General of Pennsylvania petitioned the Commonwealth Court for leave to intervene as an appellant on behalf of the Commonwealth of Pennsylvania. The intervening appellees filed a motion to deny this petition.

On May 5, 1971, the Commonwealth Court heard oral argument on the appeal from the P.TJ.C. order of December 21, 1970. The Commonwealth Court permitted the Attorney General to appear and argue on the merits of the appeal subject to later consideration [140]*140of whether intervention should be allowed. On June 1, 1971, the Commonwealth Court heard argument on the Attorney General’s petition to intervene.

On September 14, 1971, the Commonwealth Court issued an order affirming the order of the P.U.C. and denying the Attorney General’s petition to intervene.2 The Attorney General and the City and County of York subsequently petitioned this Court for allowance of appeal which was granted on November 30, 1971.

II

Complainants’ first contention is that this Court’s decision in Northern Pennsylvania, Power Co. v. Pennsylvania, Public Utility Commission, 333 Pa. 265, 5 A. 2d 133 (1939), sets forth a standard for determining the permissibility of mergers of utilities subject to the jurisdiction of the Public Utility Commission which is not in accord with the standard adopted by the Legislature in the Public Utility Law. We agree.

Section 202 of the Pennsylvania Public Utility Law3 provides that: “Upon the application of any public utility and the approval of such application by the commission, evidenced by its certificate of public convenience first had and obtained,... it shall be lawful. . . [f]or any public utility ... to acquire from, or to transfer to, any person or corporation, ... by any method or device whatsoever, including a consolidation, merger, sale or lease, the title to, or the possession or use of, any tangible or intangible property used or useful in the public service. . . .”

[141]*141Section 203 of the Public Utility Law4 makes it clear that a certificate of public convenience approving a merger is not to be granted unless the Commission is able to find affirmatively that public benefit will result from the merger. That section provides in pertinent part: “A certificate of public convenience shall be granted by order of the commission, only if and when the commission shall find or determine that the granting of such certificate is necessary or proper for the service, accommodation, convenience, or safety of the public . . . .”

Despite the unequivocal command of the Public Utility Law that a utility merger is not to be approved unless the Commission is able to find that the merger will affirmatively benefit the public, this Court’s decision in Northern Pennsylvania Power Co., supra, adopted a different standard. There we held that a utility subject to the jurisdiction of the P.U.C. has the right to sell its property and thereby effect a merger with another utility “unless it is established, by competent evidence, that the sale will adversely affect the public in some substantial way.” 333 Pa. at 267, 5 A. 2d at 134.

We now believe that our holding in Northern Pennsylvania Power Co., supra, must be abandoned, for it is not in accord with the intent of the Legislature. Section 203 of the Public Utility Law5 requires that those seeking approval of a utility merger demonstrate more than the mere absence of any adverse effect upon the public. Section 203 requires that the proponents of a merger demonstrate that the merger will affirmatively promote the “service, accommodation, convenience, or safety of the public” in some substantial way.

[142]*142Although the Commission and the .Commonwealth Court did consider themselves hound to follow the now-abandoned standard of Northern Pennsylvania Power Co., supra, we do not believe that a remand to the Commission is in order. We note that the Commission, perhaps in recognition of the weakness of the Northern Pennsylvania Power Co. holding, did in fact make an express finding that the proposed merger would affirmatively benefit the public. The P.U.C. in its December 21, 1970, order stated: “[T]he Commission has given considerable thought to the positive aspects of this merger. The benefits that will ultimately accrue to the subscribers of the York service area should not be given casual recognition. Analogous to many mergers, the economies that would be forthcoming in this present merger are considerable. In view of the greater bargaining position that the surviving company Generar would have in obtaining needed capital in the money markets, and other comparative advantages, such as lower administrative costs, improved labor market conditions, and more importantly, the elimination of the other two corporate companies (York and Princeton), the beneficiaries of this merger will certainly be the subscribers of York and Princeton.”

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Bluebook (online)
295 A.2d 825, 449 Pa. 136, 1972 Pa. LEXIS 358, Counsel Stack Legal Research, https://law.counselstack.com/opinion/york-v-pennsylvania-public-utility-commission-pa-1972.