Pennsylvania Petroleum Ass'n v. Pennsylvania Power & Light Co.

Opinion by

Judge Blatt,

On March 31, 1975, Pennsylvania Power & Light Co. (PP&L) filed supplement numbers 24 and 25 to its Electric Tariff with the Pennsylvania Public Utility Commission (PUC). These supplements requested increases in the rates charged for electricity and a modification in PP&L’s rate design (i.e., the relationships of rates charged different customer classes). Hearings on the proposed supplements were held in the period between September 1975 and January 1976. Eighty persons filed complaints with the PUC regarding the supplements and participated in varying degrees in the hearings. Among these complainants was the Pennsylvania Petroleum Association (PPA) which presented two witnesses and 12 exhibits. The PUC issued a formal rate order on September 17, 1976, approving PP&L’s requested supplement No. 25 rate level and substantially approving its requested rate design. This appeal was initiated by a petition for review filed by PPA from the PUC’s order. PP&L has filed a motion to quash, arguing that PPA is not a person aggrieved by the PUC’s order and therefore has no standing to bring this appeal.

Prior to the enactment of the Pennsylvania Rules of Appellate Procedure, Section 1101 of the Public Utility Law¹ (Act), permitted appeals from orders of the PUC by “any party to the proceedings affected thereby.” See City of Pittsburgh v. Pennsylvania Public Utility Commission, 3 Pa. Commonwealth Ct. 546, 284 A.2d 808 (1971). This section was suspended by Pa. R.A.P. 5105(c) and subsequently repealed.² Appeals from PUC orders must now be taken pursuant to the rules of appellate procedure primarily chapter 15, and Pa. R.A.P. 501 defines the necessary interest a party must have to bring an appeal as follows :

Except where the right of appeal is enlarged by statute, any party who is aggrieved by an appealable order . . . may appeal therefrom. (Emphasis added.)

PPA argues initially that the exemption contained in the above rule applies to allow a party who has been “affected,” rather than “aggrieved,” by a PUC order to appeal that order. Simply stated, PPA contends that a recent amendment to Section 1112 of the Act, 66 P.S. §1442, has enlarged the right of appeal from orders of the PUC to include persons “affected” by such orders, which PPA implies is a less stringent standard.³ The text of that section, however, does not support PPA’s argument but instead reads as follows with the amended language emphasized and the superseded language bracketed:

Whenever the commission shall make any rule, regulation, finding, determination, or order under the provisions of this act, the same shall be prima facie evidence of the facts found, and shall remain conclusive upon all parties affected thereby, unless set aside, annulled, or modified [in an appeal taken as provided in this act] on judicial review.

We do not believe that this amendment was intended to confer a basis for seeking appellate review. Both the former and the present versions of Section 1112 describe only the weight to be given orders of the PUC when collaterally challenged, and thus prohibit “parties affected” by the order from challenging it other than upon direct judicial review. We believe that the amendment of the section was intended merely to conform the section with the terminology employed in the appellate rules⁴ and not to enlarge the right to appeal orders of the PUC.

Although undefined in the appellate rules, the concept of “aggrievement” of a party by an order which confers standing on that party to appeal that order has been examined in a long series of cases in this Commonwealth. The traditional statement of this concept was repeated by our Supreme Court in Wm. Penn Parking Garage, Inc. v. City of Pittsburgh, 464 Pa. 168, 191, 346 A.2d 269, 280 (1975):

[The party] must have a direct interest in the subject-matter of the particular litigation, otherwise he can have no standing to appeal. And not only must the party desiring to appeal have a direct interest in the particular question litigated, but his interest must be immediate and pecuniary, and not a remote consequence of the judgment. The interest must also be substantial. (Citations omitted.)

Although the requirement that the asserted interest have a pecuniary element has generally been eroded,⁵ the standing of PPA to bring this appeal remains dependent on whether or not PPA can demonstrate an interest in PP&L’s rates and rate design which is direct, substantial, immediate and not a remote consequence of the PUC’s order. Accord, Snelling v. PennDOT, 27 Pa. Commonwealth Ct. 276, 366 A.2d 1298 (1976); Wilt v. Beal, 26 Pa. Commonwealth Ct. 298, 363 A.2d 876 (1976); Cablevision v. Zoning Hearing Board, 13 Pa. Commonwealth Ct. 232, 320 A.2d 388 (1974).

In its complaint, the initial pleading filed with the PUC, PPA described itself as “a non-profit statewide trade association of retail distributors of number 2 middle distillate fuel oil for residential and commercial space and water heating end-use purposes.” PPA’s interest in the proceedings was stated in the complaint as follows: “[m]any PPA members are competitors of PP&L in residential and commercial space and water heating markets and have an interest in the rate schedules proposed by PP&L for residential and commercial classes and subclasses of customers in this proceeding.” The subject matter of the complaint involved the propriety of the proposed and then-existing PP&L rate design which PPA alleged was discriminatory in that the rate charged residential and commercial space and water heating end-users was unreasonably below the actual costs of service and that this unreasonably low rate excluded competition in the residential and commercial space and water heating market in which the PPA members participated. The complaint did not allege that PPA nor any of its members were customers of PP&L.

PPA’s petition for review filed with this Court continues the same arguments with respect to the PUC’s order but also contains the allegation that some of PPA’s members are customers of PP&L. PPA admits in its brief that in its presentation before the PUC it neither identified nor presented any evidence concerning its members who were customers of PP&L. Based on the limited record before us, therefore, we must conclude that the predominant interest of PPA in the PUC’s order here appealed was that of a competitor seeking to nullify the economic advantage PP&L enjoyed in the commercial and residential space and water heating market because of its PUC-approved rate structure. Although PPA has alleged in its petition for review an alternative interest in the order appealed from, i.e., that of its members who are customers of PP&L and who are charged for electricity pursuant to an allegedly discriminatory rate design, we believe that PPA’s failure to initially allege in its complaint that some of its members were PP&L customers and to identify these members during its presentation before the PUC prevents this Court from considering the allegation at this point.

The record persuades us therefore that PPA’s interest stems from the fact that the PUC order here appealed continues its members’ competitive disadvantage with regard to PP&L in the commercial and residential space and water heating market. Our review of the case law concerning the standing of parties alleging competitive injury to appeal leads us to conclude that such parties have standing only where the alleged competition is prohibited by a regulatory scheme in which both parties participate. In Delaware County National Bank v. Campbell, 378 Pa. 311, 106 A.2d 416 (1954), a bank was found to have standing to challenge a merger between two other banks because the statutory scheme regulating banks prohibited competition which threatened the financial stability of such institutions. Likewise, in Franklin Federal Savings and Loan Ass’n v. Patterson, 421 Pa. 409, 218 A.2d 724 (1966), a savings and loan association had standing to challenge the establishment of a competing savings and loan association nearby since excessive competition was prohibited by the state banking code. Cf. Ritter Finance Co. v. Myers, 401 Pa. 467,165 A.2d 246 (1960), in which a loan company did not have standing to challenge the granting of a license to a nearby competitor because the law regulating small loan companies was not concerned with competition between such companies. Because we can find here no evidence of a regulatory scheme in which both parties participate which prohibits competition between them, we must conclude that PPA does not have a substantial interest in the PUC order sufficient to bring this appeal. See and compare with the concurring opinion of Justice Roberts in Pennsylvania Tavern Ass’n v. Pennsylvania Liquor Control Board, Pa. , , 372 A.2d 1187, 1192 (1977).

PPA argues finally that PP&L has waived any challenge to PPA’s standing tó bring this appeal by failing to challenge its standing during the hearings before the PUC. We disagree. Pa. R.A.P. 501 clearly establishes a threshold interest (aggrievement) which a prospective appellant must demonstrate to bring an appeal under the rules. We do not believe that the requirement that a prospective appellant be aggrieved by the order he is attempting to appeal is one which can be waived by the action or inaction of an opponent because this requirement is imposed by statute. To hold otherwise would allow an opponent’s action or inaction to enlarge the statutory right of appeal to include parties not aggrieved by the order appealed from. We believe therefore that PP&L’s failure to challenge the standing of PPA to participate before the PUC does not prevent it from doing so here.

PP&L’s motion to quash is granted.

Judge Crumljsh, Jr. concurs in decision only. Judge Kramer did not participate in the decision in this case.

Order

And Now, this 23rd day of September, 1977, the motion of Pennsylvania Power and Light Company to quash the appeal of the Pennsylvania Petroleum Association is hereby granted.

1 Act of May 28, 1937, P.L. 1053, as amended, 66 P.S. §1101 et seq.

2 Section 20 of the Act of October 7, 1976, P.L. 1057, repealed absolutely Sections 1101 to 1106, and 1109 of the Public Utility Law, 66 P.S. §§1431 to 1436, 1438.

3 Section 1101 of the Public Utility Law, 66 P.S. §1181, formerly permitted appeals from orders of the PUC by “any party to the proceedings affected thereby.” The interpretation given the word “affected” in that section was similar to that given the word “aggrieved” for purposes of bringing appeals. See Arsenal Board of Trade v. Pennsylvania Public Utility Commission, 166 Pa. Superior Ct. 548, 553, 72 A.2d 612, 615 (1950).

4 Chapter 15 of the Pennsylvania Rules of Appellate Procedure favors use of the term “judicial review” rather than “appeal.” See note to Pa. R.A.P. 3503.

5 See Wm. Penn Parking Garage, Inc. v. City of Pittsburgh, 464 Pa. 168, 195, 346 A.2d 269, 282 (1975) ; Wilt v. Beal, 26 Pa. Commonwealth Ct. 298, 300, 303 A.2d 870, 878 (1976).