In February 2021, the Pennsylvania Public Utility Commission (PUC) issued a declaratory order finding that a utility did not need to pay certain municipal permitting fees because those fees were preempted by the Pennsylvania Public Utility Code (Code).1 The Commonwealth Court of Pennsylvania (Commonwealth Court) reversed that decision in April 2022.2 The key to the Commonwealth Court's analysis was that the permitting fees were permissible because they do not "constitute utility regulation."
BACKGROUND
In a long line of cases, the Supreme Court of Pennsylvania (Supreme Court) has held that the Code generally preempts the field of public utility regulation. According to the Supreme Court: "If each county were to pronounce its own regulation and control over electric wires, pipe lines and oil lines, the conveyors of power and fuel could become so twisted and knotted as to affect adversely the welfare of the entire state."3 Consequently, the Supreme Court has held that municipalities have very limited authority to regulate public utilities.4
The seminal case involving the preemption of municipal permitting fees is PPL Electric Utilities Corp. v. City of Lancaster5 (City of Lancaster). There, the City of Lancaster (City) enacted a comprehensive program for managing public rights-of-way (ROWs). The City argued that the Supreme Court should employ a conflict preemption analysis rather than a field preemption analysis because Section 1511(e) of the Business Corporation Law6 gave the City explicit authority to issue permits for utilities to enter ROWs. The Supreme Court rejected that argument, finding that the tribunal only needs to determine whether the municipal ordinance intrudes upon the field that...
