PPL Elec. Utilities Corp. v. City of Lancaster

214 A.3d 639

PPL ELECTRIC UTILITIES CORPORATION, Appellant

v.CITY OF LANCASTER and Pennsylvania Public Utility Commission, Appellees

PPL Electric Utilities Corporation,

v.City of Lancaster and Pennsylvania Public Utility Commission

Cross-Appeal of: City of Lancaster

No. 55 MAP 2017

No. 57 MAP 2017

Supreme Court of Pennsylvania.

Argued: March 5, 2019

Decided: August 20, 2019

Donna M. J. Clark, Esq., Terrance J. Fitzpatrick, Esq., Energy Association of Pennsylvania, John F. Povilaitis, Esq., Alan Michael Seltzer, Esq., Buchanan Ingersoll & Rooney PC, for Energy Association of Pennsylvania, Amicus Curiae.

Daniel Steven Cohen, Esq., Cohen Law Group, P.C., for PA Municipal League, PA State Assoc of Twp Supervisors & PA State Assoc of Twp Commissioners, Amicus Curiae.

Anthony C. DeCusatis, Esq., Morgan, Lewis & Bockius LLP, for Aqua Pennsylvania, Inc. & Pennsylvania-American Water Company, Amicus Curiae.

Suzan DeBusk Paiva, Esq., Verizon Communications, Inc., for Verizon, Amicus Curiae.

Charles Edward Thomas III, Esq., Thomas, Niesen & Thomas, LLC, for Pennsylvania Telephone Association, Amicus Curiae.

Jason Gantcliffe Benion, Esq., James John Kutz, Esq., Post & Post, P.C., Walter W. Cohen, Esq., Obermayer Rebmann Maxwell & Hippel LLP, David Bruce MacGregor, Esq., Sarah C. Yerger, Esq., for PPL Electric Utilities Corporation, Appellant.

Hugh Joseph Algeo IV, Esq., Michael Elmer Peters, Esq., Michael Joseph Savona, Esq., John A. Van Luvanee, Esq., Eastburn and Gray, P.C., for City of Lancaster, Appellee.

James Anthony Mullins, Esq., Bohdan R. Pankiw, Esq., Robert Frank Young, Esq., PA Public Utility Commission, for Pennsylvania Public Utility Commission, Appellee.

SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

OPINION

JUSTICE WECHT

The regulation of public utilities¹ long has been entrusted to state law. Pennsylvania's Public Utilities Code ("the Code")² confers administrative and regulatory authority upon the Pennsylvania Public Utilities Commission (the "PUC"). In the case at hand, the City of Lancaster ("the City") enacted a measure ("Ordinance 16-2013" or "the Ordinance") that sought to superimpose municipal requirements upon state-regulated utilities that use the City's rights-of-way to deliver services. PPL Electric Utilities Corp. ("PPL") challenged the Ordinance, contending, inter alia , that it intruded upon, and thus was preempted by, the Code. The Commonwealth Court largely agreed, upholding PPL's challenge with regard to all but one of the challenged provisions of the Ordinance. The provision that the Commonwealth Court upheld authorized the City to impose an "annual occupancy fee" upon utilities that utilize its municipal rights-of-way. We hold that all of the provisions challenged by PPL, including the annual occupancy fee, are preempted by the Code. Accordingly, we affirm the Commonwealth Court's decision except with respect to its allowance for the annual occupancy fee, which latter ruling we reverse.

I. Background

On December 17, 2013, the City, a home rule municipality pursuant to the Home Rule Charter and Optional Plans Law, 53 Pa.C.S. §§ 2901 - 3171 (hereinafter, "the HRC"),³ enacted Ordinance 16-2013, which implemented a comprehensive program for management of the City's rights-of-way.

The Ordinance granted the City certain powers over, and concomitantly imposed correlative burdens upon, utilities, including the imposition of an annual occupancy (or "maintenance"⁴ ) fee. The City cited as authority for its Ordinance the powers putatively conferred upon it by the Third Class City Code ("TCCC"), 53 P.S. §§ 35101 - 39701,⁵ and the HRC.

Several Ordinance provisions are at issue. Section 263B-3 authorizes the City to conduct inspections to confirm that utility facilities comply with Code and PUC standards and do not present safety hazards. Section 263B-4(6) permits the City to direct a utility to temporarily or permanently remove, relocate, or reposition utility facilities in the right-of-way for various purposes, including repair, maintenance, installation of public improvements, or in case of emergency. Section 263D-1 authorizes the City to impose penalties for a utility's violation of any provision of the Ordinance that does not lie in the PUC's exclusive jurisdiction. Finally, Section 263B-5 permits the City to impose the aforesaid maintenance fee upon utilities for the occupancy and use of its rights-of-way.⁶

On February 4, 2014, PPL filed a petition for review in the Commonwealth Court's original jurisdiction, seeking declaratory and injunctive relief against the City and, nominally, the PUC, which is substantively aligned with PPL. PPL, a utility regulated by the PUC under the Code, contended that the Code reflects the legislature's intention to impose a uniform, statewide regulatory scheme governing public utilities and their facilities, and vests exclusive regulatory authority in the PUC. On PPL's account, the PUC's authority extends to the location, construction, and maintenance of utility facilities, provides for the only tariff that may be imposed upon a public utility, and specifies the means of the PUC's exclusive oversight of Code and regulatory compliance. PPL also argued that the City exceeded its authority under the Municipalities Planning Code, 53 P.S. §§ 10101 - 11202,⁷ and the Business Corporation Law of 1988 ("BCL"), 15 Pa.C.S. §§ 1101 - 4146.⁸

The City filed preliminary objections in the nature of a demurrer. It contended that the Ordinance was duly enacted and consistent with its police powers. The Commonwealth Court, noting that "municipalities have no inherent powers; they possess only such powers of government as are expressly granted to them by the legislature and are necessary to carry out the same," overruled the preliminary objections and directed the City to answer PPL's Petition. PPL v. City of Lancaster , 462 M.D. 2013, slip. op. at 9 (Pa. Cmwlth. May 1, 2014) (citing Hoffman Mining Co., Inc. v. Zoning Hearing Bd. of Adams Twp. , 612 Pa. 598, 32 A.3d 587 (2011) ).

After further pleading, PPL filed an application for summary relief,⁹ seeking judgment in its favor with regard to Counts I, II, III, and V of its Petition, embodying, respectively, PPL's challenges to Section 263B-5's maintenance fee; Section 263B-3's inspection requirements; Section 263D-1's parallel enforcement authority for Code violations; and Section 263B-6's relocation and removal provisions, all on the basis that they are impliedly preempted by the Code.

The Commonwealth Court, sitting en banc , entered judgment in PPL's favor and against the City with respect to Counts II, III, and V, but denied relief as to Count I, upholding the City's authority to impose the maintenance fee. See PPL Elec. Utils. Corp. v. City of Lancaster , 125 A.3d 837, 853 (Pa. Cmwlth. 2015) (en banc ) (hereinafter " PPL ").

The court began by reviewing principles of state-law preemption of local law-making authority. "[E]ven in areas over which municipalities have been granted power to act," the court explained, "the state may bar local governing bodies from legislating in a particular field." Id. at 844 (quoting Hoffman Mining Co. , 32 A.3d at 593 ). Preemption takes three forms: express preemption, conflict preemption, and field preemption. See generally Hoffman Mining Co. , 32 A.3d at 593-94.

The court then considered the PUC's sweeping authority under state law. It noted that the General Assembly has sought to ensure that utilities are bound to a uniform, statewide regulatory scheme rather than a crazy quilt of local regulations, a principle this Court recognized over a century ago under the Code's predecessor statute. See York Water Co. v. York , 250 Pa. 115, 95 A. 396, 397 (1915) ("The Public Service Company Law was intended to establish a complete and uniform system throughout the state for the enforcement of such powers as were conferred upon the Public Service Commission by that statute.").¹⁰ Thus, in Duquesne Light Co. v. Upper St. Clair Township , 377 Pa. 323, 105 A.2d 287 (1954) (hereinafter " Upper St. Clair "), the Township sought by ordinance to block a utility from exercising the power of eminent domain the General Assembly had granted it to condemn property for a new transmission line. The Court of Common Pleas granted the utility injunctive relief from the effect of the ordinance. This Court affirmed, citing the PUC's statutory authority to "supervise and regulate all public utilities doing business within this Commonwealth," and holding that the then-applicable Public Utility Code "excluded townships from the same field" as that governed by the Code. The Court elaborated as follows:

The [Code] demonstrates without question that the Legislature of the Commonwealth of Pennsylvania has therein expressed its policy to commit the regulation of utilities to the [PUC] .... We believe that this is the reason why the General Assembly entrusted the regulation of public utilities to a commission of statewide jurisdiction. Local authorities not only are ill-equipped to comprehend the needs of the public beyond their jurisdiction, but, and equally important, those authorities, if they had the power to regulate, necessarily would exercise that power with an eye toward the local situation and not with the best interests of the public at large as the point of reference. We believe that the General Assembly never intended to bestow a power upon first class townships which is in headlong conflict with the power already given the [PUC].

Id. at 293. This Court reaffirmed this principle in County of Chester v. Philadelphia Electric Co. , 420 Pa. 422, 218 A.2d 331 (1966) (hereinafter " Philadelphia Electric "), rejecting a county ordinance that prohibited construction of pipelines without approval of the county's planning commission.

The Commonwealth Court also cited several of its own more recent decisions to the same effect. In doing so, the court introduced a separate statutory provision at issue in this case, Section 1511(e)...