76 Pa. Commw. 387 | Pa. Commw. Ct. | 1983
Opinion by
Huntingdon, Ine. and Hyland Homes, Die. appeal an order of the Pennsylvania Public Utility Commission (PUC) which directed it to pay a .sum in the amount of $138,624.00 to the Newtown Artesian Water Company (Newtown) or suffer termination of water service to Huntingdon’s residential development.
Huntingdon, Inc. (Huntingdon) is the developer of a seventy-nine acre residential development in Bucks County known as Sturibridge.
Huntingdon proceeded with the development of Sturbridge, installing water distribution lines, main extensions and facilities within the development which were connected to an existing ten inch water main owned by Newtown which lies beneath the roadway of Route 413 abutting the development. As of February 27,1981, approximately sixty single family homes had been constructed, sold and occupied in Sturbridge and had been provided water service by Newtown. On or about that date Newtown refused to provide further service to the remaining lots
The signatories to the agreement with Newtown contributed $2,414,948.48 in aid of the construction of off-site facilities which included a one million gallon storage tank. The Indian Book facilities are integrated with the Newtown system and the capacity of the Indian Bock facilities is in excess of that needed to service the 2,643 residential units planned by the eight contributing developers. Newtown demands $138,624.00 as Huntingdon’s share of the construction costs for the Indian Book facilities.
The general rule that a utility must bear the cost of repairs and improvements is settled and is based upon the statutory requirement that the utility provide reasonable and adequate service.
There is little question that Newtown’s existing customers would have been unduly burdened had the utility borne the full cost of upgrading its water supply and storage facilities to meet the demand represented in the development plans of Huntingdon and the eight developers involved in the creation of Indian Bock.
Newtown and the PUC point out that the Indian Rock facilities have a capacity approximately twice that which is needed to service the developments of the eight signatory developers.
In addition, there is nothing in ,the record to support the formula or even assessment of construction costs on a unit share basis. The Water Facilities Ageement, which provides for payment to the eight signatories of monies collected by subsequent developers for use of the excess capacities of the Indian Rock facilities, specifies that
the amount of such payment shall be calculated by multiplying the total cost of project facilities by a ratio of the capacity (in gallons) used by the customer over the total capacity of the project facilities (in gallons).
The record indicates that Sturbridge requires 35,600 gallons of storage capacity; the capacity of the Indian Rook facilities is 1,000,000 gallons. Applying the formula, Huntingdon’s share of the cost of the Indian Rook facilities would be 3.56% of the total. A similar formula is indicated in the preliminary memorandum attached to the extension deposit agreement between Huntingdon and Newtown.
Because Huntingdon was not a signatory to the Indian Book Water Facilities Agreement, it is, of course, not subject to any formula found therein. Huntingdon did, however, execute the extension deposit agreement with Newtown. Although we recognize that Huntingdon never deposited the sum estimated for off-site capital costs and disputed the assessment of off-site construction costs before the PUC, we note that the proceedings before the PUC were discontinued at Huntingdon’s request, and in any event the method of computing the off-site construction costs delineated in the preliminary memorandum was not disputed in those proceedings. In addition, Huntingdon concedes by argument in its brief that if any contribution to the construction costs of the Indian Bock facilities is due, it should be calculated according to the formula in the extension deposit agreement.
Accordingly, Huntingdon’s share of the cost of the one million gallon Indian Bock storage tank should be 3.56% of the total cost of that component of the project. Similarly, Huntingdon should bear 3.56% of the cost of any pumping or water source facilities constructed as part of the Indian Book project and serving tbe Newtown/Indian Bock integrated system, subject to tbe terms of the extension deposit agreement.
Obdeb
Now, August 17, 1983, the order of the Pennsylvania Public Utility Commission in the above referenced matter, dated January 29, 1982, at Nos. C-812383 and P-810264 is hereby vacated and tbe matter remanded
Jurisdiction is relinquished.
Byland Homes, Inc. is a builder which had purchased lots from Huntingdon for the construction and sale of single family homes.
This figure included an estimated $17,800.00 for water storage, $8,900.00 for booster pumping and $49,770.00 for water source development. For a discussion of how these figures were generated, see test following note 10, imfra.
Huntingdon proposed to develop 152 homes in Sturbridge. Newtown did not terminate service to the homes already occupied. On February 27, 1981, the date service to the remaining lots was terminated, Huntington conveyed a house and lot to Eric and Mary Elizabeth Peterson. The Petersons were originally parties to the complaint before the PUC. Service has since been provided to the Peterson home and they are not parties to this appeal.
Huntingdon filed a formal complaint before the PUC on March 6, 1981. Simultaneously, Huntingdon filed a Petition for
The general rule is rooted in the provisions of Section 1501 of the Public Utility Code, 66 Pa. C. S. §1501. Section 1501 provides, in pertinent part:
Every public utility shall furnish and maintain adequate, efficient, safe, and reasonable service and facilities, and shall make all such repairs, changes, alterations, substitutions, extensions, and improvements in or to such service and facilities as shall be necessary or proper for the accommodation, convenience, and safety of its patrons, employees, and the public.
In its brief to this Count, the PUC urges that Huntingdon, as the party seeking relief from discontinuance of its service, bore the burden, under Section 332(a) of the Public Utility Code (Code), 66 Pa. C. S. §332(a), to prove that the charges sought by Newtown were unjustified. The PUC characterized Huntingdon's complaint as a challenge to an “over-charge” and directs our attention to Burleson v. Pennsylvania Public Utility Commission, 66 Pa. Commonwealth Ct. 282, 443 A.2d 1373 (1982), aff'd Pa. , 461 A.2d 1284 (No. 46 W.D. Appeal Dkt. 1982, filed July 11, 1983) and Philadelphia Suburban Water Co. v. Feinstein, 34 Pa. Commonwealth Ct. 516, 383 A.2d 997 (1978) to support its position that Huntingdon bore the burden of proof. Notwithstanding the fact that the complaint to the PUC was prompted by a discontinuance of service under 66 Pa. G. S. §1503, we believe the circumstances here are not analogous to the alleged “over-charge” due to a defective electrical cable in Burleson or to the “over-charge” because of a defective water meter in Feinsteim. The charges asserted by .the utility company here are more akin to costs asserted in ratemaMng under Chapter 13 of the Code, 66 Pa. C. S. §§1301-1315. Consequently, we believe the utility should bear the burden to show the inadequacy of existing facilities and to justify the capital charges imposed as a condition to the receipt of service.
Huntingdon’s express refusal to participate in the Indian Rock project and Newtown’s subsequent provision of service is not significant. Service was provided under an extension deposit agreement, signed by Huntingdon, which expressly included off-site construction costs. Notwithstanding the fact that Huntingdon excluded the off-site construction monies from its deposit, we believe the execution of the deposit agreement by Huntingdon implied recognition that the development of Sturbridge would contribute to the need for additional facilities in the Newtown System.
The record indicates that facilities in excess of the capacity needed for the eight developers were constructed because numerous economies of scale were favorable.
$2,417,948.46 divided by 2,643 original units equals approximately $914.85. $914.85 multiplied by 2,643 additional new units equals $2,417,948.55.
The information is contained in the letter doted July 18, 1977 from Newtown to Huntingdon. The letter is, by reference, incorporated into the preliminary memorandum attached to the extension deposit agreement.