Philadelphia Gas Works v. PA PUC ( 2019 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA Philadelphia Gas Works, : Petitioner : : v. : No. 1405 C.D. 2018 : ARGUED: November 12, 2019 Pennsylvania Public Utility : Commission, : Respondent : BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge HONORABLE ELLEN CEISLER, Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE CEISLER FILED: December 9, 2019 Philadelphia Gas Works (PGW) petitions for review from the September 20, 2018 order of the Pennsylvania Public Utility Commission (Commission). The Commission concluded that once liens securing payment of delinquent gas bills are docketed against real property in the Philadelphia County Court of Common Pleas (County Court), the Commission no longer has jurisdiction over rate issues related to those bills. Based on that conclusion, the Commission reasoned that the late fees of 1.5% per month charged by PGW, although authorized as rates under its Commission tariff, are no longer applicable to unpaid gas bills once liens are docketed relating to those bills. As a result, the Commission ordered refunds of years of late fees on charges that were subject to docketed liens, imposed financial penalties on PGW for charging those late fees, and ordered PGW to reorganize its billing system. PGW is owned by the City of Philadelphia (City). PGW functions as a public utility providing natural gas to customers in the City. Pursuant to the Commission’s applicable regulations and PGW’s tariff approved by the Commission, PGW charges a late fee of 1.5% per month on all overdue gas bills. PGW charges this late fee regardless of whether the City has docketed a lien in the County Court in relation to an unpaid balance. Only if a lien balance is reduced to judgment do late fees stop accruing on that balance. Fairmount Manor Realty Co., L.P. (Fairmount), Elrea Garden Realty Co., L.P. (Elrea Garden), and Marshall Square Realty Co., L.P. (Marshall Square), along with their mutual property management company, SBG Management Services, Inc., have intervened in this appeal.1 Fairmount, Elrea Garden, and Marshall Square are owners of real properties in the City improved with apartment complexes. Their properties receive gas service from PGW. The legal issues raised and briefed in this appeal are identical to those in Philadelphia Gas Works v. Pennsylvania Public Utility Commission (Pa. Cmwlth., No. 1291 C.D. 2018, filed December 9, 2019) (PGW I), and Philadelphia Gas Works v. Pennsylvania Public Utility Commission (Pa. Cmwlth., No. 1404 C.D. 2018, filed December 9, 2019) (PGW II). All three cases were argued on the same date. After thorough review, we reverse the Commission’s order at issue in this appeal, for the reasons set forth in our legal analysis in PGW I. __________________________________ ELLEN CEISLER, Judge 1 The notice of intervention filed by SBG Management Services, Inc. (SBG) states that SBG is also the agent for Colonial Garden Realty Co., L.P., Simon Garden Realty Co., L.P., Marchwood Realty Co., L.P., Oak Lane Court Realty Co., L.P., and Fern Rock Realty Co., L.P. However, those entities did not participate in this appeal. 2 IN THE COMMONWEALTH COURT OF PENNSYLVANIA Philadelphia Gas Works, : Petitioner : : v. : No. 1405 C.D. 2018 : Pennsylvania Public Utility : Commission, : Respondent : ORDER AND NOW, this 9th day of December, 2019, the order of the Pennsylvania Public Utility Commission dated September 20, 2018 is REVERSED. __________________________________ ELLEN CEISLER, Judge