34 Pa. Commw. 326 | Pa. Commw. Ct. | 1978
Opinion by
The City of Erie (Erie) has petitioned us to review an order of the Pennsylvania Public Utility. Commission (PUC) denying Erie’s request, that the Pennsyl
On March 10, 1970, the PUC issued an order labeled “State Tax Adjustment Procedure” which permitted public utilities, including PEC to impose a surcharge on customers, based on calculations specifically prescribed in the order, for the purpose of recovering a portion of legislatively imposed tax increases levied on the utilities during the latter part of 1969 and in February of 1970. The PUC explained in its order that the temporary
In reviewing any PUC order, this Court is limited to considering only whether or not constitutional rights were violated, an error of law. was committed,
Erie argues that the PUC’s March 10, 1970 order usurps the legislative function of taxation by placing the tax burden directly upon the users of electricity rather than upon the utility, as the legislature had intended. A similar argument, however, was raised and dismissed by our Superior Court in Borough of Lansdowne v. Public Service Commission, 74 Pa. Superior Ct. 203 (1920) (allocatur denied), in which Lansdowne had contended that, by fixing the rates to be charged by the local water company for fire hydrant service, the Public Service Commission (now the PUC) had imposed a tax on the Borough. The court dismissed this argument, holding that:
There is no merit in the contention that the order of the commission is equivalent to a levy of taxes upon the borough. It is a determination of the fair, just and reasonable amount which the borough should pay for the fire protection service which it is receiving by its own motion. The commission no more levies a tax upon it than does a jury in an action against a borough upon a contract or in trespass.
Furthermore, the method of computing the state tax surcharge clearly indicates that only a portion of the actual tax levied is represented in the surcharge and that thé surcharge only relates to the increase in the tax to be paid by the utilities. The recovery of all previously imposed taxes has been provided for in PEC’s base rate, and the state tax surcharge listed on Erie’s bill is not representative of Erie’s total share of the utility taxes paid by PEC. We cannot agree, therefore, that the PUC has permitted PEC to “tax”
Brie also argues that the PUC lacks the statutory authority to implement a tax adjustment procedure which permits utilities to adjust their rates without requiring individual rate requests. Section 901 of the Public Utility Law
The last argument proposed by Erie is that the state tax adjustment procedure violates Article VIII, Section 8 of the Pennsylvania Constitution which prohibits the pledge or loan of credit of the Commonwealth for an improper private purpose. We have examined the cases cited by Erie
We will therefore affirm the order of the PUC which dismissed Erie’s complaint.
And Now, this 23rd day of March, 1978, the order of the Pennsylvania Public Utility Commission dismissing the City of Erie’s complaint is hereby affirmed.
The PUC has changed the method of computation of the surcharge at least three times subsequent to March 10, 1970 to reflect changes in the taxes imposed on the utilities.
Act of May 28, 1937, P.L. 1053, as amended, 66 P.S. §1101 et seq.
Tosto v. Pennsylvania Nursing Home Loan Agency, 460 Pa. 1, 331 A.2d 198 (1975); Johnson v. Pennsylvania Housing Finance Agency, 453 Pa. 329, 309 A.2d 528 (1973); Basehore v. Hampden Industrial Development Authority, 433 Pa. 40, 248 A.2d 212 (1968); Sharpless v. Mayor of Philadelphia, 21 Pa. 147 (1853).