Philadelphia Gas Works v. PA PUC

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Philadelphia Gas Works, :
Petitioner :
:
v. :
:
Pennsylvania Public :
Utility Commission, : No. 1291 C.D. 2018
Respondent : Argued: February 7, 2022
BEFORE: HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE LORI A. DUMAS, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE FIZZANO CANNON FILED: March 16, 2022
Before this Court are issues remaining for disposition on remand
following reversal of this Court’s decision in Philadelphia Gas Works v.
Pennsylvania Public Utility Commission, 222 A.3d 1218, 1224 (Pa. Cmwlth. 2019)
(PGW I), by the Pennsylvania Supreme Court. See Phila. Gas Works v. Pa. Pub.
Utility Comm’n, 249 A.3d 963, 974 (Pa. 2021) (PGW II), reargument granted in
part 256 A.3d 1092 (June 15, 2021), on reargument, 256 A.3d 1092 (Pa. 2021).
Upon review, we conclude that (1) our Supreme Court’s decision in PGW II applies
retroactively only as to parties to this litigation and to other proceedings pending at
the time the PGW II decision was issued in April 2021; (2) as agreed by the parties,
a remand is necessary for presentation of evidence and a determination by the Public
Utility Commission (Commission) concerning the correct amounts of any refunds
owed by Philadelphia Gas Works (PGW); (3) based on due process principles, the
Commission acted arbitrarily and capriciously and abused its discretion by imposing
a $25,000 monetary sanction against PGW for past violations of the statute
governing municipal liens, where the Commission’s decision applying the statute
fundamentally altered longstanding practice regarding PGW’s docketing of
municipal liens arising from unpaid gas bills; (4) the Commission’s mandated
changes to PGW’s payment crediting system were not arbitrary or capricious and
did not constitute an abuse of discretion; (5) PGW’s challenge to the timetable for
compliance with the Commission’s order regarding billing changes has become
moot due to the passage of time, and PGW is not entitled to a further extension of
time to comply with the Commission’s order; and (6) the Commission did not err in
imposing a $2,000 penalty against PGW for violating the Commission’s regulation
governing the application of partial payments.
I. Background
PGW is a municipally owned utility providing natural gas distribution
services to customers in the city of Philadelphia (City). See SBG Mgmt. Servs.,
Inc./Colonial Garden Realty Co., L.P. (PUC No. C-2012-2304183, filed Aug. 23,
2018) (Comm’n Op. & Order, 8/23/18), 2018 WL 4185479 at *2. Pursuant to its
Commission-approved tariff, PGW may charge interest at a rate of up to 1.5% per
month, or 18% simple interest per annum (tariff rate), on overdue charges. See SBG
Mgmt. Servs., Inc./Colonial Garden Realty Co., L.P. (PUC No. C-2012-2304183,
filed Aug. 21, 2015) (ALJ Decision, 8/21/15), 2015 WL 5780436 at *26; 52 Pa.
Code § 56.22(a).
2
In 2012, SBG Management Services, Inc. (SBG), Colonial Garden
Realty Company (Colonial Garden) and Simon Garden Realty Company (Simon
Garden) (collectively, Intervenors) filed formal complaints with the Commission
challenging the lawfulness of PGW’s billing practices. See Comm’n Op. & Order,
8/23/18 at 1 & 5. Relevant here, Intervenors alleged that customers’ bills contained
incorrect charges and calculations of interest and penalties; accordingly, Intervenors
requested a refund and/or credit for all overpayments made to PGW. See SBG Mgmt.
Servs., Inc./Colonial Garden Realty Co., L.P. (PUC No. C-2012-2304183, filed Dec.
8, 2016) (Comm’n Op. & Final Order, 12/8/16), 2016 WL 7242243 at *5.
Specifically, Intervenors alleged that PGW’s practice of continuing to charge tariff-
authorized late fees on accounts subject to perfected municipal liens was unlawful.
See id.Following hearings held in August 2013 and January 2015, an
Administrative Law Judge (ALJ) issued a decision sustaining Intervenors’
consolidated complaints in part and dismissing them in part. See ALJ Decision,
8/21/15 at 1 & 7. The ALJ sustained the consolidated complaints challenging
PGW’s application of the tariff rate to outstanding balances that were the subject of
perfected municipal liens for unpaid gas service. Id. at 43. The ALJ reasoned that
“PGW’s claim on an outstanding debt under the [Public Utility Code 1] is
extinguished the moment a municipal lien on that same outstanding debt is filed with
[the] Court of Common Pleas of Philadelphia County and docketed by the Court’s
prothonotary.” Id. at 43.
The ALJ directed PGW to refund assessed late payment charges in the
amount of $94,626.23 to Colonial Garden and $471,351.38 to Simon Garden. See
1
66 Pa.C.S. §§ 101-3316.
3
ALJ Decision, 8/21/15 at 2, 43 & 47. The ALJ also recommended the imposition of
a $27,000 civil penalty upon PGW. Of that amount, $2,000 was a penalty for PGW’s
improper application of partial payments to the most recent late payment charges,
rather than to charges due for prior service, in violation of Section 56.23 of the
Commission’s regulations, 52 Pa. Code § 56.23.2 The remaining $25,000 penalty
was for PGW’s improper application of the tariff rate late fees to delinquent accounts
subject to docketed municipal liens. See ALJ Decision, 8/21/15 at 44 & 47 (citing
Section 69.1201(c) of the Commission’s Regulations, 52 Pa. Code § 69.1201(c);
Section 3301 of the Public Utility Code, 66 Pa.C.S. § 3301).3 The ALJ concluded
2
Section 56.23 provides:
Payments received by a public utility without written instructions
that they be applied to merchandise, appliances, special services,
meter testing fees or other nonbasic charges and which are
insufficient to pay the balance due for the items plus amounts billed
for basic public utility service shall first be applied to the basic
charges for residential public utility service.
52 Pa. Code § 56.23.
3
Section 3301 of the Public Utility Code provides, in relevant part:
(a) General rule.--If any public utility, or any other person or
corporation subject to this part, shall violate any of the provisions of
this part, or shall do any matter or thing herein prohibited; or shall
fail, omit, neglect, or refuse to perform any duty enjoined upon it by
this part; or shall fail, omit, neglect or refuse to obey, observe, and
comply with any regulation or final direction, requirement,
determination or order made by the commission, or any order of the
commission prescribing temporary rates in any rate proceeding, or
to comply with any final judgment, order or decree made by any
court, such public utility, person or corporation for such violation,
omission, failure, neglect, or refusal, shall forfeit and pay to the
Commonwealth a sum not exceeding $1,000, to be recovered by an
action of assumpsit instituted in the name of the Commonwealth. In
construing and enforcing the provisions of this section, the violation,
4
that “a civil penalty in the amount of $25,000 [was] appropriate to deter PGW from
applying its tariff and rates to liened indebted amounts—an improper practice which
has proved highly profitable for the Company.” Id. at 47. The ALJ determined that
both bases for the imposition of the civil penalty constituted failure to provide
adequate and reasonable service as required by Section 1501 of the Public Utility
Code, 66 Pa.C.S. § 1501. Id. at 44.
PGW filed exceptions to the ALJ’s decision. In a December 2016
decision, the Commission adopted the ALJ’s recommendations, with certain
modifications. See Comm’n Op. & Final Order, 12/8/16 at 68.
The Commission determined that the imposition of the civil penalty did
not violate PGW’s due process rights, noting that “[d]ue process in matters before
the Commission requires that a party be afforded a reasonable opportunity to know
the nature of its opponents’ contentions so that it can prepare a suitably responsive
answer.” Comm’n Op. & Final Order, 12/8/16 at 63 & n.54 (citing Duquesne Light
Co. v. Pa. Pub. Util. Comm’n, 507 A.2d 433 (Pa. Cmwlth. 1986)). The Commission
also concluded that “[a] civil penalty [was] appropriate given the failure of PGW to
provide an explanation and a clear numerical example of its billing methodology to
omission, failure, neglect, or refusal of any officer, agent, or
employee acting for, or employed by, any such public utility, person
or corporation shall, in every case be deemed to be the violation,
omission, failure, neglect, or refusal of such public utility, person or
corporation.
(b) Continuing offenses.--Each and every day’s continuance in the
violation of any regulation or final direction, requirement,
determination, or order of the commission, or of any order of the
commission prescribing temporary rates in any rate proceeding, or
of any final judgment, order or decree made by any court, shall be a
separate and distinct offense. . . .
66 Pa.C.S. § 3301(a) & (b).
5
[c]omplainants after several occasions to do so.” Id. at 64. The Commission upheld
the $27,000 civil penalty recommended by the ALJ. Id. at 68.
The Commission modified the ALJ’s decision by recalculating a refund
amount of $95,126.55 for Colonial Garden. See Comm’n Op. & Final Order,
12/8/16 at 68. Moreover, the Commission directed PGW to provide certification,
within 45 days after the entry of the Commission’s order, that it had modified its
business practices to bill in compliance with the order and had ceased any automated
billing practices that violated the Public Utility Code or Commission Regulations
concerning the application of municipal liens or related collection procedures. Id. at
66 & 69.
PGW filed a petition for reconsideration, clarification and/or rehearing
(First Petition) of the Commission’s December 2016 opinion and order. PGW
requested that the Commission hold another hearing to explore the “legal, policy and
operational issues” that would result from compliance with its order regarding the
effect of docketed municipal liens, such as the extent to which PGW would be
required to pass along increased costs to customers, noting that it would be required
to revise its entire collections process with respect to overdue gas distribution bills
subject to docketed municipal liens. First Petition at 26-28, Reproduced Record
(R.R.) at 88a-90a. With respect to the Commission’s order that PGW revise its
automated billing practices concerning the unlawful application of partial payments,
PGW asserted that the 45-day compliance period was “totally insufficient to achieve
compliance with [the] newly created rule,” as it would “require PGW to totally
reprogram its bill payment program for hundreds of thousands of customers.” First
Petition at 34, R.R. at 96a. The Commission initially granted the First Petition
pending review of the merits. Comm’n Order, 12/28/16 at 1-2, R.R. at 107a-08a.
6
PGW thereafter filed a supplemental petition for rehearing
(Supplemental Petition) requesting that the Commission reopen the record to
consider evidence from a separate base rate proceeding with respect to “PGW’s
practices as they apply to all customers” and “the impacts of system-wide changes
to PGW’s partial payment allocation practices.” See Supplemental Petition for
Rehearing at 1 & 12, R.R. at 109a & 122a. PGW urged the Commission to reopen
the record and admit exhibits to provide a more complete record upon which to
determine the required scope of changes to PGW’s partial payment allocation
practices. Supplemental Petition at 12, R.R. at 122a.
The Commission ultimately denied PGW’s First Petition and
Supplemental Petition in May 2018, with one exception. See Comm’n Op. & Order,
5/18/18 at 1, 12 & 32. The Commission found PGW failed to submit compelling
evidence supporting a compliance period of 57 weeks, but nevertheless extended
PGW’s compliance period to 90 days from the date of the May 2018 order. See id.
3-4 & 32.
PGW filed a petition for reconsideration and/or clarification (Second
Petition) of the Commission’s May 2018 opinion and order, requesting that the
Commission “open an investigation into the legal, policy and operational
consequences of” its decision on the docketing of municipal liens and PGW’s
application of partial payments. Second Petition at 12, R.R. at 222a. PGW asserted
that the Commission’s decision would substantially impact its jurisdictional
authority to hear disputes related to PGW’s billing practices. See id. PGW
maintained that the Commission abused its discretion by ordering system-wide
modifications that were unsupported by evidence, that the Commission failed to
consider the financial impact of such modifications on PGW and its customers, and
7
that even the extended 90-day timeframe to implement the ordered modifications
constituted an abuse of discretion as it was “arbitrary and not supported by any
evidence in the record.” Id. at 10 n.28, R.R. at 220a. PGW also contended that the
Commission’s imposition of a penalty constituted an abuse of discretion, an error of
law, and a violation of PGW’s constitutional rights, because the absence of prior
notice of the Commission’s interpretations denied PGW its constitutional right of
due process. See id. at 9 n.27, R.R. at 219a. Further, PGW asserted that “the
Commission erred in assessing a civil penalty” without first providing a “full
evidentiary hearing on the propriety of issuing [the] penalty.” Id. PGW also
maintained that the Commission erred in directing credits or refunds of late payment
charges. See id.
The Commission preliminarily granted the Second Petition in June
2017, pending review of the merits, but ultimately denied the Second Petition in
August 2018. See Comm’n Op. & Order, 8/23/18 at 12. The Commission rejected
PGW’s assertion that it contravened PGW’s due process rights by failing to provide
notice of a purported new rule regarding billing practices and then penalizing PGW
for violation of that rule. See id. at 9. The Commission reasoned that PGW received
“more than adequate notice” by means of “the filing and prosecution of the
[c]omplaint by SBG concerning the allegations and unreasonableness of PGW’s
billing practices,” as the matter under review was initiated in 2012. Id. The
Commission also noted that Section 3301 of the Public Utility Code, 66 Pa.C.S
§ 3301, expressly authorizes the imposition of civil penalties upon public utilities
for providing unreasonable service in violation of the Public Utility Code, thereby
affording PGW notice as to the possible imposition of the penalty. See id.
8
PGW appealed to this Court, which reversed. In PGW I, this Court
determined that municipal liens arise automatically by operation of law and that
filing merely perfects the preexisting lien. PGW I, 222 A.3d at 1222-23 (citing
Section 3(a)(1) & (b) of what is commonly referred to as the Municipal Claims and
Tax Lien Act (Lien Law), Act of May 16, 1923, P.L. 207, as amended, 53 P.S.
§ 7106(a)(1) & (b)). Thus, the Court concluded that the Commission erred in
holding that it lacked jurisdiction over gas charges subject to docketed liens, such
that PGW could not continue to impose late fees of 1.5% per month on delinquent
accounts once the City docketed its municipal liens relating to those accounts. 222
A.3d at 1224. Reasoning that our holding effectively disposed of all of PGW’s
issues on appeal, this Court declined to address PGW’s remaining arguments. See
id.
On April 29, 2021, the Pennsylvania Supreme Court reversed PGW I.
In PGW II, our Supreme Court held that a lien docketed by a city of the first class
(i.e., the City4) constitutes a judgment pursuant to Section 3(b) of the Lien Law, 53
P.S. § 7106(b), such that interest on any past due amounts secured by the docketed
lien will accrue at the 6% per annum legal rate of interest applicable to judgments,
rather than the 18% per annum tariff rate. See PGW II, 249 A.3d at 971. The Court
highlighted the statute’s provision that a docketed municipal lien “shall be given the
effect of a judgment against the said property only with respect to which the claim
is filed as a lien.” Id. at 969 (quoting 53 P.S. § 7106(b)). The Court found that “[t]he
General Assembly’s use of the phrase ‘given the effect of a judgment’ [was] critical
to the outcome,” reasoning that “[b]y expressly stating that the docketed lien is to be
treated like a judgment with regard to the underlying claim, the General Assembly
4
Philadelphia is the only first-class city in the Commonwealth. PGW II, 249 A.3d at 969.
9
has expressed its intent that docketing the lien have the same effect as a final
determination of a dispute between parties without further proceedings that would
generally be required to effectuate the result.” Id. at 970. The Court determined that
“[v]iewing the statutory scheme as a whole, it [was] apparent that the General
Assembly intended to circumvent the traditional adjudicatory procedures and allow
for docketed municipal liens in first-class cities [i.e., only in the City] to constitute
a judgment on the property once it is docketed with the prothonotary.” Id. at 972.
“In sum, [the Court] conclude[d] that the terms of [Section 3(b) of the Lien Law, 53
P.S. § 7106(b),] are clear and unambiguous,” as “[b]y requiring that docketed
municipal liens in first-class counties ‘be given the effect of a judgment[,]’ the
General Assembly ha[d] expressed its intent that these docketed municipal liens be
treated as the equivalent of a final resolution of a claim between parties.” Id. at 973.
Thus, the Court held that “because a lien docketed per [Section 3(b) of the Lien Law,
53 P.S. § 7106(b)] must be given the effect of a judgment, it follows that the post-
judgment rate of interest applies to the amount of the lien.” Id. at 973-74 (citing
Equitable Gas Co. v. Wade, 812 A.2d 715, 716 (Pa. Super. 2002)).5
In June 2021, the Pennsylvania Supreme Court granted PGW’s
application for reargument, in part, and remanded the matter to this Court “for
consideration of any outstanding issues.” See Phila. Gas Works v. Pa. Pub. Util.
5
Our Supreme Court acknowledged that “this interpretation may force a municipality to
choose between forgoing the collection of the tariff rate on a delinquent account in favor of
obtaining a judgment upon which it can execute,” but concluded that “this is a choice [Section 3
of the Lien Law, 53 P.S. § 7106,] requires.” PGW II, 249 A.3d at 974. The Court further noted
that a “municipality has the option of allowing the tariff to accrue until the dispute is reduced to
judgment” by “elect[ing] to pursue a judgment against the customer, as utility bills are personal
debts upon the customer who receives the service.” Id. at 974 (citing Section 1 of the Act of April
17, 1929, P.L. 527, as amended, 53 P.S. § 7251). The Court did not comment on the significance
of perfected liens as record notice to third parties who might otherwise purchase properties without
notice of existing liens.
10
Comm’n, 256 A.3d 1092 (Pa. 2021). On July 21, 2021, PGW filed a request to
establish a supplemental briefing schedule in order “to streamline this Court’s
consideration of the outstanding issues.” Application to Establish Supplemental
Briefing Schedule (Application) at 5 (citing Pa.R.A.P. 2140).6 This Court granted
PGW’s Application and instructed the parties to address several specific issues, as
discussed below.
II. Issues
On remand, several issues remain for this Court’s disposition. First, we
address whether the Supreme Court’s opinion and order in PGW II applies
retroactively and, if so, to what extent. Next, we determine whether a remand is
appropriate for the presentation of additional evidence and a determination of the
correct amounts of any refunds owed by PGW to Intervenors. Further, we consider
whether the Commission’s orders violated PGW’s constitutional rights to due
process by announcing, applying, and enforcing by monetary sanction, without prior
notice, a new legal interpretation against PGW regarding the docketing of municipal
liens. In addition, we review whether the Commission abused its discretion or acted
arbitrarily and capriciously in ordering PGW to change its billing practices regarding
amounts subject to docketed liens and credits for partial payments. In a related issue,
we consider whether PGW’s challenge to the Commission’s deadline for such billing
changes is moot, whether PGW is entitled to a further extension of time to comply
with the Commission’s order to correct its billing practices, and whether a remand
is appropriate for a determination of an appropriate deadline for PGW’s compliance.
6
Intervenors responded, inter alia, that PGW failed to raise before the Pennsylvania
Supreme Court and, thus, waived any potential challenge to retroactive application of PGW II. See
Answer to Application (Answer) at 5.
11
Finally, we address the propriety of the Commission’s imposition of a $2,000
sanction against PGW for its improper billing practices regarding partial payments.
III. Discussion
A. Retroactive Application of PGW II
PGW argues that PGW II established a new principle of law and,
therefore, should be applied prospectively only, to liens “docketed on or after April
29, 2021,” the date the PGW II opinion and order were issued. PGW’s Supplemental
Brief (PGW’s Br.) at 37. PGW contends that the Pennsylvania Supreme Court
established a new principle of law in PGW II by holding for the first time that a
municipal lien docketed by the City pursuant to Section 3(b) of the Lien Law, 53
P.S. § 7106(b), constitutes a final judgment. See id. at 25-27 (citing PGW II, 249
A.3d at 970; Passarello v. Grumbine, 87 A.3d 285, 307 (Pa. 2014); Fiore v. White,
757 A.2d 842, 847 (Pa. 2000)).7 PGW maintains that the holding of the
7
Specifically, PGW points to the following portions of the Pennsylvania Supreme Court’s
holding in PGW II as establishing a new principle of law:
By expressly stating that the docketed lien is to be treated like a
judgment with regard to the underlying claim, the General Assembly
has expressed its intent that docketing the lien have the same effect
as a final determination of a dispute between parties without further
proceedings that would generally be required to effectuate the result.
....
By requiring that docketed municipal liens in first-class counties “be
given the effect of a judgment[,]” the General Assembly has
expressed its intent that these docketed municipal liens be treated as
the equivalent of a final resolution of a claim between parties.
....
12
Pennsylvania Supreme Court in PGW II resulted in “a fundamental break from the
previous law upon which PGW relied,” and the newly established principle of law
“was not clearly foreshadowed by precedent.” Id. at 28.8
PGW maintains that “[p]rior to PGW II, numerous cases had interpreted
or commented on the lien perfection process in cities of the first class [i.e., the City]
and no court—nor [sic] the Commission—had ever interpreted the lien perfection
process as creating a judgment having preclusive effect (as the Supreme Court has
now done).” PGW’s Br. at 28 (citing City of Phila. v. Perfetti, 119 A.3d 396 (Pa.
Cmwlth. 2015); Graffen v. City of Phila., 984 F.2d 91 (3d Cir. 1992)). For instance,
PGW observes that in Perfetti, this Court described docketed liens as “security-type
interests,” rather than judgments. PGW’s Br. at 28 (quoting Perfetti, 119 A.3d at
405). Likewise, PGW contends that in Graffen, the United States Court of Appeals
for the Third Circuit determined that recording a lien in the City pursuant to the Lien
Law gave rise to a statutory lien rather than a judicial lien, as it was not predicated
on a judicial determination, and that the court did not “suggest that a lien docketed
in the City was a ‘judgment’ that constituted a final resolution of the claim.’” PGW’s
Br. at 28 (citing Graffen, 984 F.2d at 96). Thus, PGW maintains that it “reasonably
believed, as did this Court and the Commission, that the ‘old law’—i.e., that
[D]ocketed municipal liens in counties of the first class to be treated
in the same manner as a judgment that has been rendered following
an adjudicative process.
PGW’s Br. at 26-27 (quoting PGW II, 249 A.3d at 970 & 973-74 (emphasis added)).
8
Intervenors assert that PGW waived any challenge to the retroactive application of PGW
II, a contention PGW terms “baseless,” as Intervenors “freely admitted in [their] Answer to PGW’s
Application . . . that, “[i]n the second (and to some extent the fourth and fifth issues), PGW
essentially seeks prospective-only application of the Supreme Court’s decision.” PGW’s Br. at 35
n.13 (citing Intervenors’ Answer at 4).
13
docketing merely perfects the preexisting municipal lien—was applicable to liens
docketed in the City for unpaid gas service.” PGW’s Br. at 30.
Further, PGW maintains that “an examination of the Lien Law itself
shows no foreshadowing of the Supreme Court’s decision,” as this law “contains
provisions that treat docketed liens and court-entered judgments differently,” further
noting that certain provisions “discuss the process of obtaining a judgment after a
lien is recorded.” PGW’s Br. at 30-31. Thus, PGW contends that the “new rule of
law” established in PGW II “creates a ‘judgment’ that still requires a second
judgment (entered by the courts),” as “the ‘judgment’ created by docketing remains
subject to a scire facias proceeding.” Id. at 30.
PGW contends “that in certain circumstances it would be inequitable to
apply a change in the law even to the benefit of the party who successfully argued
for the change.” PGW’s Br. at 19-20 (citing In re Catherwood Tr., 173 A.2d 86, 94
(Pa. 1961); Incollingo v. Ewing, 282 A.2d 206, 229-30 (Pa. 1971); Am. Trucking
Ass’n v. McNulty, 596 A.2d 784, 790 (Pa. 1991); Oz Gas, Ltd. v. Warren Area Sch.
Dist., 938 A.2d 274, 278 (Pa. 2007)). PGW asserts that, for example, the
Pennsylvania Supreme Court has accorded purely prospective effect to certain
decisions where retroactive application would necessitate the provision of tax
refunds. See PGW’s Br. at 24-25 (citing Dana Holding Corp. v. Workers’ Comp.
Appeal Bd. (Smuck), 232 A.3d 629, 647 (Pa. 2020); Oz Gas, 938 A.2d at 285). PGW
asserts that “[t]he relevant equities strongly favor a purely prospective application
of the Supreme Court’s Opinion and Order.” PGW’s Br. at 31, 34 (citing Gen.
Motors Corp. v. Com., 222 A.3d 454, 471 (Pa. Cmwlth. 2019); Oz Gas, 938 A.2d at
285; McNulty, 596 A.2d at 789-90).
14
Moreover, PGW maintains that “[i]n no event should fully retroactive
effect be ordered,” as it would make PGW potentially liable for its past practice of
charging 18% interest on thousands of docketed liens, and would require PGW to
pass the cost on to its paying customers.” PGW’s Br. at 38. PGW also maintains
that according PGW II retroactive effect would not further the operation of the
decision, as “both before and after PGW II[] property owners have [had] the ability
to seek relief from docketed liens (judgments) using the mechanisms under the Lien
Law.” Id. at 37. Therefore, in the alternative, PGW maintains that if this “Court
determines that additional retroactivity is required,” then retroactive application
should be limited “to the case at bar and any appeals pending as of April 29, 2021.”
Id. at 37-38.
Intervenors counter that PGW II should be accorded retroactive effect
because this decision did not establish a new principle of law but, rather, clarified
existing law. See Intervenors’ Br. at 13-14 (citing Fiore, 757 A.2d at 848; Kendrick
v. Dist. Att’y of Phila. Cnty., 916 A.2d 529, 538 (Pa. 2007)). In PGW II, our Supreme
Court concluded that the terms of Section 3(b) of the Lien Law, 53 P.S. § 7106(b),
were clear and unambiguous, reasoning that “[b]y requiring that docketed municipal
liens in first-class counties ‘be given the effect of a judgment[,]’ the General
Assembly ha[d] expressed its intent that these docketed municipal liens be treated
as the equivalent of a final resolution of a claim between parties.” PGW II, 249 A.3d
at 973. Thus, the Court reasoned that “because a lien docketed per [Section 3(b) of
the Lien Law, 53 P.S. § 7106(b),] must be given the effect of a judgment, it follows
that the post-judgment statutory rate of interest applies to the amount of the lien.”
Id. at 973-74 (citing Equitable Gas Co., 812 A.2d at 716). Based on their contention
15
that PGW II announced no new rule, Intervenors request an order providing for
retroactive application of PGW II.
“The general rule followed in Pennsylvania is that we apply the law in
effect at the time of the appellate decision.” Blackwell v. State Ethics Comm’n, 589
A.2d 1094, 1099 (Pa. 1991). However, “a sweeping rule of retroactive application
is not justified,” and “[r]etrospective application is a matter of judicial discretion
which must be exercised on a case by case basis.” Id. at 1099. Here, despite PGW’s
argument in favor of purely prospective application of PGW II and Intervenors’
arguments for fully retroactive effect, neither side asserts a valid reason not to apply
the general rule here. This Court, therefore, concludes that PGW II applies both to
the litigants that participated in that case and to all cases pending on direct appeal at
the time of the issuance of that decision. See id. at 1099 & 1101 (decision declaring
statutory provision unconstitutional would be applied retroactively to the parties to
the litigation and to all proceedings pending at the time the decision was issued,
“adher[ing] to the principle that[] a party whose case is pending on direct appeal is
entitled to the benefit of changes in law which occur[] before the judgment becomes
final”) (citation and quotation marks omitted).
B. Remand for Refund Calculations
PGW further argues that the Commission violated its right to due
process by failing to permit PGW to respond to the “new normative rules” by
“present[ing] evidence of the reasonableness of the directives, or whether they were
even required at all.” PGW’s Br. at 39. For example, PGW contends that the
Commission’s orders impermissibly directed PGW to provide credits or refunds for
liens for which the underlying debt had already been paid, asserting that Colonial
16
Garden had paid all docketed liens as of November 2011. See id. at 40 (citing id.,
Appendix A, ALJ Decision, 8/21/15 at 16-17, 19, 47-48; id., Appendix B, Comm’n
Op. & Order, 12/8/16 at 85, 110). PGW also asserts that the Commission’s orders
improperly direct a refund of $471,358.38 to Simon Garden, when Simon Garden in
fact paid only $520.16 in late payment charges. PGW’s Br. at 41 (citing id.,
Appendix A, ALJ Decision, 8/21/15 at 16, 19, 49-51, 63-64, 68, 73; id., Appendix
B, Comm’n Op. & Order, 12/8/16 at 86-95, 110-111; 66 Pa.C.S. § 1312).9
PGW asserts that, in the event this Court determines PGW II applies to
require refunds to Intervenors, a remand is needed for the presentation of evidence
and a determination by the Commission of the correct refund amounts. At oral
argument, Intervenors agreed to a remand for this purpose. Moreover, this Court is
unable to determine from the record the basis of the Commission’s calculation of the
9
Section 1312(a) of the Public Utility Code provides:
If, in any proceeding involving rates, the [C]ommission shall
determine that any rate received by a public utility was unjust or
unreasonable, or was in violation of any regulation or order of the
[C]ommission, or was in excess of the applicable rate contained in
an existing and effective tariff of such public utility, the
[C]ommission shall have the power and authority to make an order
requiring the public utility to refund the amount of any excess paid
by any patron, in consequence of such unlawful collection, within
four years prior to the date of the filing of the complaint, together
with interest at the legal rate from the date of each such excessive
payment. In making a determination under this section, the
[C]ommission need not find that the rate complained of was
extortionate or oppressive. Any order of the [C]ommission
awarding a refund shall be made for and on behalf of all patrons
subject to the same rate of the public utility. The [C]ommission shall
state in any refund order the exact amount to be paid, the reasonable
time within which payment shall be made, and shall make findings
upon pertinent questions of fact.
66 Pa.C.S. § 1312(a).
17
refunds it ordered. Accordingly, we will grant PGW’s request to remand this matter
for the purpose of allowing the parties to present additional evidence concerning the
correct calculation of any refunds PGW owes to Intervenors. Accord Marshall v.
Commonwealth, 197 A.3d 294, 299 (Pa. Cmwlth. 2018) (remanding for further
evidence where the parties and this Court agreed the record was inadequate for the
Court to determine the adjusted basis of real property subject to foreclosure);
Straban Twp. v. Hanoverian Trust (Pa. Cmwlth., No. 708 C.D. 2014, filed Apr. 22,
2015), slip op. at 8, 2015 Pa. Commw. Unpub. LEXIS 294, at *1210 (agreeing with
the parties’ requests and remanding for evidentiary hearing).
C. Due Process
PGW next argues that the Commission contravened PGW’s due
process rights by “simultaneously announcing a new rule concerning the effect of
docketed liens on its jurisdiction and directing various consequences that it believed
followed from this new rule[.]” PGW’s Br. at 39 (citing Pa. State Bd. of Pharmacy
v. Cohen, 292 A.2d 277, 282-83 (Pa. 1972); Dep’t of Env’t Res. v. Rushton Mining
Co., 591 A.2d 1168, 1175 (Pa. Cmwlth. 1991)).11 PGW maintains that “the
Commission reversed its longstanding view of the effect of docketed liens on PGW’s
ability to apply late payment charges” and then improperly penalized past conduct
10
We cite this unreported opinion as persuasive authority, pursuant to this Court’s Internal
Operating Procedures. See 210 Pa. Code § 69.414(a).
11
PGW also asserted that the Commission bypassed the rulemaking process by announcing
a new rule in an adjudication. See PGW’s Br. at 39-40. PGW has not raised this as an issue for
appeal before this Court.
18
as violative of the Commission’s “new rule.”12 PGW’s Br. at 40 & 43. PGW
essentially asserts that the Commission violated its constitutional right to due
process because the Commission failed to provide notice to PGW that its billing
practices were unlawful prior to imposing sanctions on the basis of those practices.13
Thus, PGW requests that this Court vacate the Commission’s order with respect to
the imposition of the civil fine, or remand to the Commission “to reconsider the
imposition of a penalty in light of the fact that PGW was penalized for violation of
a Commission determination that was announced for the first time in the case
below.” PGW’s Br. at 44-45.
Resolution of this issue depends, in part, on determining whether PGW
II announced a new rule of law. Although our Supreme Court determined that the
statutory language was clear and unambiguous, the fact remains that longstanding
practice and common understanding of municipal lawyers in the City, as in all other
municipalities in Pennsylvania with power to impose municipal liens, has been that
a lien arises automatically by operation of law, and filing notice of the lien, albeit in
the judgment index, merely perfects the lien by providing notice of it to third parties;
it does not function as a final judgment. See generally discussion in PGW I. Our
Supreme Court’s decision in PGW II has now set the City apart as the only
municipality in Pennsylvania that acquires a final judgment merely by unilaterally
filing a lien. Moreover, PGW I and II required analysis of the interplay among
various statutes and application of complex issues of statutory construction, not
12
PGW does not cite any Commission decisions espousing its purported prior longstanding
view that docketing municipal liens did not have the effect of a judgment, thereby precluding PGW
from imposing the tariff rate on outstanding charges for gas distribution services.
13
PGW previously objected to the Commission’s imposition of the civil penalty on ex post
facto grounds, and the Commission rejected this challenge. See Comm’n Op. & Final Order,
12/8/16 at 62-63.
19
merely ruling on the meaning of a single statutory provision. This Court, therefore,
concludes that PGW II effectively announced a new rule of law, in that it caused a
sea change in the common understanding of existing law in the City regarding
municipal liens.
However, resolving whether PGW II announced a new rule of law does
not necessarily resolve fully the question of whether, by announcing a new rule and
then penalizing PGW for past violations of that rule, the Commission itself violated
PGW’s due process rights. Intervenors assert that due process considerations are
inapplicable because they did not entitle PGW to advance notice of and the
opportunity to respond to the Commission’s purported “new rule”—i.e., its
construction of Section 3(b) of the Lien Law, 53 P.S. § 7106(b). However, this
argument likewise fails to address the propriety of the Commission’s imposition of
a fine for past conduct based on a new interpretation of the applicable law.
The authorities cited by PGW, Cohen and Rushton Mining, are
distinguishable. In Cohen, the Pennsylvania Supreme Court reversed the imposition
of professional sanctions against a pharmacist, where the conduct in question did not
fall under any of the specific categories of “grossly unprofessional conduct”
expressly enumerated in the Pharmacy Act14 or any other applicable rules or
regulations. Cohen, 292 A.2d at 278, 280. By contrast, here, the Commission
determined that PGW violated the express terms of the statute by continuing to
impose the tariff rate on overdue gas distribution service bills subject to docketed
municipal liens. See Comm’n Op. & Order, 8/23/18 at 12; see also PGW II, 249
A.3d at 971 (concluding that Section 3(b) of the Lien Law, 53 P.S. § 7106(b), is clear
and unambiguous). In Rushton Mining, this Court held that standard conditions
14
Act of September 27, 1961, P.L. 1700, as amended, 63 P.S. §§ 390-1 to 390-13.
20
contained in coal mining permits constituted improperly promulgated and, thus,
invalid regulations. Notably, this Court observed that the Department of
Environmental Resources was not interpreting a statute, but rather, setting forth
supplemental provisions to an existing statute. Rushton Mining, 591 A.2d at 1174-
75. Here, by contrast, the Commission was providing its interpretation of Section
3(b) of the Lien Law, 53 P.S. § 7106(b).
We conclude that principles of due process and fundamental fairness
precluded the Commission from simultaneously announcing a new interpretation of
Section 3 of the Lien Law, 53 P.S. § 7106, and imposing a monetary sanction against
PGW for its adherence to the prior longstanding and commonly applied
interpretation. See Snyder Bros. v. Pa. Pub. Util. Comm’n (Pa. Cmwlth., No. 1043
C.D. 2015, filed Feb. 6, 2020), slip op. at 18-19, 2020 Pa. Commw. Unpub. LEXIS
91, at *22-23 (finding that an administrative penalty was improper where the utility
“was not placed on fair notice” by the Commission’s prior behavior that the utility’s
conduct could give rise to a monetary penalty, and suggesting that to be
constitutional, an administrative enforcement provision should include an exception
for good faith conduct); HIKO Energy, LLC v. Pa. Pub. Util. Comm’n, 163 A.3d
1079, 1109 (Pa. Cmwlth. 2017) (observing that “[i]n the context of regulatory
penalties, the Due Process Clauses of the U.S. and Pennsylvania Constitutions
mandate that a party have reasonable notice of the penalty that may accrue for a
violation, as well as the underlying basis on which it rests”). Therefore, we reverse
the Commission’s imposition of a $25,000 penalty related to PGW’s charges of tariff
rates on delinquent accounts subject to filed liens prior to our Supreme Court’s
decision in PGW II on April 29, 2021.
21
D. Abuse of Discretion in Mandating Billing Changes
PGW also maintains that the Commission acted arbitrarily and
capriciously and abused its discretion, in contravention of PGW’s due process rights,
by directing PGW to implement system-wide billing modifications without first
conducting an investigation, soliciting comments from PGW, and explaining how
the Commission reached its decision. See PGW’s Br. at 45-47 (citing Section 1504
of the Public Utility Code, 66 Pa.C.S. § 1504;15 Section 1505(a) of the Public Utility
Code, 66 Pa.C.S. § 1505(a);16 2 Pa.C.S. § 507;17 Cohen, 292 A.2d at 282-83). PGW
further contends that it presented evidence before the Commission that its orders
mandated “an unrealistically short transition period (90 days) for imposing
significant and extensive obligations on PGW” and that PGW would require at least
57 weeks to implement the mandated changes. See PGW’s Br. at 46 (citing Comm’n
Op. & Order, 5/18/18 at 27-28). PGW asserts that, because the Commission
established the timeframe for PGW to bring its billing practices into compliance, this
issue was not considered at the evidentiary hearings conducted by the ALJ. See
PGW’s Br. at 45. Moreover, PGW maintains that although PGW “added some
information regarding PGW’s systems as part of PGW’s [p]etition for
15
Section 1504 of the Public Utility Code permits the Commission, after reasonable notice
and hearing, upon its own motion or upon complaint, to prescribe standards for any or all public
utilities. 66 Pa.C.S. § 1504.
16
Pursuant to Section 1505(a) of the Public Utility Code, “[w]henever the [C]ommission,
after reasonable notice and hearing, . . . finds that the service . . . of any public utility [is]
unreasonable, . . . or otherwise in violation of this part, the [C]ommission shall determine and
prescribe, by regulation or order, the reasonable, safe, adequate, sufficient, service . . . to be
observed[.]” 66 Pa.C.S. § 1505(a).
17
“All adjudications of a Commonwealth agency shall be in writing, shall contain findings
and the reasons for the adjudication, and shall be served upon all parties or their counsel personally,
or by mail.” 2 Pa.C.S. § 507.
22
[r]econsideration, this was done without an evidentiary or technical hearing and
without the specificity required by 65 Pa.C.S. §§ 1504 [&] 1505.” PGW’s Br. at 45.
Regarding the Commission’s directive that docketed lien amounts must
no longer appear on PGW’s billings, PGW contends that the Commission’s “new
rules” would create customer confusion, as customers would receive both a “regular”
monthly bill and a separate statement after the City docketed a municipal lien
securing payment of outstanding charges. PGW’s Br. at 46. PGW, therefore,
requests that this Court remand the matter to the Commission to (i) determine which
“operational revisions” are necessary in order to achieve compliance with PGW II;
and (ii) establish a “reasonable time[]line and schedule for implementing any such
modifications.” Id. at 47-48 (citing Shoemaker v. Unemployment Comp. Bd. of Rev.,
588 A.2d 100, 102-03 (Pa. Cmwlth. 1991); Underkoffler v. State Emps.’ Ret. Bd.,
432 A.2d 319, 320 (Pa. Cmwlth. 1981)).18
PGW’s arguments lack merit. First, the Commission ordered only that
PGW cease and desist from violating the Public Utility Code and certify to the
Commission, within 45 days of the Commission’s order, that PGW had ceased any
automated billing practices which violate the Public Utility Code or the
Commission’s Regulations concerning the application of municipal liens or related
procedures. See Comm’n Op. & Order, 12/8/16 at 69. The Commission did not add
further requirements in denying PGW’s petitions for reconsideration. The
18
Notably, PGW now appears to challenge the ordered billing practice modifications only
with respect to discontinuing its practice of applying the tariff rate to overdue bills subject to
docketed liens, and not, for example, the required modifications regarding the application of partial
payments. See PGW’s Br. at 45 (asserting that the ordered “system-wide modification so as to
remove amounts subject to docketed liens from [] regular monthly bills . . . constitute[s] arbitrary
and capricious action and/or an abuse of discretion, because none of these issues related to
modifications of PGW’s systems were discussed or explored in the administrative proceedings
below”).
23
Commission also did not modify the nature of the ordered modifications in extending
the compliance period to 90 days in its denial of PGW’s petition for reconsideration,
clarification and rehearing. See PGW’s Br., Appendix C, Comm’n Op. & Order,
5/18/18 at 32. Further, although the Commission denied PGW’s request for
reconsideration, clarification and/or rehearing of its December 8, 2016 order, the
Commission nevertheless considered the verified statement of a PGW employee in
extending the compliance period from 45 to 90 days. See Comm’n Op. & Order,
5/18/18 at 3-4, 27-28 & 32.
In addition, while there does seem to be a lack of information in the
record regarding the exact changes required in PGW’s systems in order to comply
with the Commission’s cease and desist order, the Commission has not mandated
what specific methods PGW must employ to bring its billing into compliance with
the Commission’s order. It is difficult to see the purpose of a hearing in order to
determine PGW’s specific course of conduct for compliance, when the Commission
has left that course open.
Moreover, as discussed in the next section, arguments about the
Commission’s determination of the timetable for compliance are moot.
E. Remand Regarding Payment Credits and Related Timetable
In a related argument, PGW requests that this Court remand this matter
to the Commission to permit PGW the opportunity to comment and to conduct
further investigation and, thereafter, for the Commission to determine what
modifications in PGW’s existing billing practices, if any, are required based on our
Supreme Court’s decision in PGW II. See PGW’s Br. at 41-42. In arguing that the
Commission was obligated to conduct an evidentiary hearing concerning the
24
question of the ordered compliance window for automated billing practice
modifications with respect to the effect of docketed municipal liens, PGW is
essentially challenging the Commission’s denial of its petitions for rehearing.
Section 703 of the Public Utility Code provides, in relevant part:
(f) Rehearing.--After an order has been made by the
[C]ommission, any party to the proceedings may, within
15 days after the service of the order, apply for a rehearing
in respect of any matters determined in such proceedings
and specified in the application for rehearing, and the
commission may grant and hold such rehearing on such
matters. No application for a rehearing shall in anywise
operate as a supersedeas, or in any manner stay or
postpone the enforcement of any existing order, except as
the [C]ommission may, by order, direct. If the application
be granted, the commission may affirm, rescind, or modify
its original order.
66 Pa.C.S. § 703(f) (emphasis added). Despite requesting that the Commission hold
another hearing to consider the “legal, policy and operational issues” that would
result from compliance with its order regarding the effect of docketed municipal
liens, such as the extent to which PGW would be required to pass along increased
costs to customers, PGW’s First Petition challenged only the 45-day timeframe for
compliance with the order to modify its automated billing practices concerning the
unlawful application of partial payments. See First Petition at 26-28 & 34, R.R. at
88a-90a & 96a; Supplemental Petition at 1 & 12, R.R. at 109a & 122a. In its Second
Petition, PGW challenged only in a footnote the extended 90-day timeframe for
compliance generally as unsupported by evidence, and it did not specify whether the
challenge pertained to modifications concerning docketed municipal liens or
application of partial payments. See Second Petition at 10 n.28, R.R. at 220a. Thus,
PGW has waived its assertion that the Commission should have conducted a
25
subsequent evidentiary hearing regarding the feasibility of the 90-day compliance
window. See 66 Pa.C.S. § 703(f) (permitting a party to “apply for a rehearing in
respect of any matters determined in such proceedings and specified in the
application for rehearing”) (emphasis added).
Moreover, this Court agrees with Intervenors that PGW’s challenge to
the ordered modifications, whether to the “legal, policy and operational issues”
resulting therefrom or to the timeframe for compliance, is now moot. As noted
above, “[n]o application for a rehearing shall in anywise operate as a supersedeas,
or in any manner stay or postpone the enforcement of any existing order, except as
the [C]ommission may, by order, direct.” Section 703(f) of the Public Utility Code,
66 Pa.C.S. § 703(f). Thus, PGW’s First Petition did not stay enforcement of the 45-
day period for compliance established in the Commission’s December 8, 2016 final
order. See 66 Pa.C.S. § 703(f). Although PGW did not adequately challenge the
subsequent 90-day timetable, that time limit was likewise not stayed. See id. As the
compliance period has long since passed, PGW’s challenge thereto is moot. See
Rogers v. Lewis, 656 A.2d 1368, 1369 (Pa. 1995) (dismissing, as moot, a quo
warranto action against mayor/executive of township challenging his right to occupy
office following expiration of the term of office); Musheno v. Dep’t of Pub. Welfare,
829 A.2d 1228, 1232 (Pa. Cmwlth. 2003) (stating that “[t]his Court will not decide
moot questions”).
Similarly, the feasibility of the ordered compliance timeframe is also
moot. PGW insisted the 45- and 90-day timeframes were inadequate because PGW
would need some 57 weeks to change its systems in order to modify its billing
practices. However, several years have now passed since the Commission’s initial
decision, far longer than the timeframe PGW said it needed to prepare to change its
26
automated payment credit system. Even crediting PGW’s assertion without an
evidentiary hearing, the issue is now moot.
F. Substantial Evidence in Support of Penalty Amounts
Although it raises an issue asserting lack of substantial evidence in
support of the Commission’s imposition of penalties, PGW does not develop any
such argument. See PGW’s Br. at 42-44. Thus, that argument is waived. See Wirth
v. Com., 95 A.3d 822, 837 (Pa. 2014) (citing Pa. R.A.P. 2119(a)).
Further, PGW does not deny the conduct for which it was sanctioned,
i.e., that it was applying partial payments to more recent late payment charges and
that it was applying the tariff rate to outstanding bills for gas distribution service
which were subject to docketed liens. Absent such a denial, it is not clear how PGW
could challenge the factual or evidentiary basis for the civil penalties.
Instead, PGW contends that the Commission acted arbitrarily and
capriciously and abused its discretion, in violation of PGW’s due process rights, by
failing to provide the reasons for the $27,000 civil fine. See PGW’s Br. at 42 (citing
2 Pa.C.S. § 507). PGW argues that the Commission improperly failed to explain
which of its new rules were violated, the number of violations, or the amount of
penalty associated with each violation. See id. at 44.
The Commission may levy a fine of up to $1,000 per day for violations
of the Public Utility Code. See Section 3301(a) & (b) of the Public Utility Code, 66
Pa.C.S. § 3301(a) & (b). The basis for the imposition of civil penalties and the
amount thereof is a question of law pursuant to Section 69.1201(c) of the
Commission’s Regulations, 52 Pa. Code. § 69.1201(c) (setting forth various factors
to be considered in determining appropriate penalty amounts).
27
Here, the ALJ recommended the imposition of a $27,000 civil penalty
against PGW. Of that amount, $2,000 was a penalty for PGW’s improper
application of partial payments to the most recent late payment charges, rather than
to charges due for prior service, in violation of Section 56.22 of the Commission’s
regulations, 52 Pa. Code § 56.22; the remaining $25,000 was a penalty for PGW’s
improper application of the tariff rate to delinquent accounts subject to docketed
liens. See ALJ Decision, 8/21/15 at 44, 47 (citing Section 69.1201(c) of the
Commission’s Regulations, 52 Pa. Code § 69.1201(c); Section 3301 of the Public
Utility Code, 66 Pa.C.S. § 3301). The ALJ concluded that “a civil penalty in the
amount of $25,000 [was] appropriate to deter PGW from applying its tariff and rates
to liened indebted amounts—an improper practice which has proved highly
profitable for the Company.” Id. at 47. The ALJ determined that both bases for the
imposition of the civil penalty constituted failure to provide adequate and reasonable
service in accordance with Section 1501 of the Public Utility Code, 66 Pa.C.S.
§ 1501. See id. at 44. Thus, the ALJ explained the basis of his penalty
recommendations.
The Commission adopted the ALJ’s recommendation for the
imposition of the civil penalty on the basis of PGW’s violations of Section 56.22 of
the Commission’s regulations, 52 Pa. Code § 56.22, and Section 1501 of the Public
Utility Code, 66 Pa.C.S. § 1501. The Commission also adopted the ALJ’s rationale
in fixing the amount of the civil penalty by discussing each of the factors set forth in
Section 69.1201(c) of the Commission’s Regulations, 52 Pa. Code § 69.1201(c), and
Section 3301 of the Public Utility Code, 66 Pa.C.S. § 3301. See ALJ Decision,
28
8/21/15 at 44-47; Comm’n Op. & Final Order, 12/8/16 at 62-67.19 Therefore, like
the ALJ, the Commission adequately explained its rationale for the amounts of the
penalties imposed.
As concluded in Section C above, this Court reverses, on due process
and fundamental fairness grounds, the imposition of the $25,000 penalty related to
late charges on docketed liens imposed prior to April 29, 2021. However, there is
no such basis to reverse the $2,000 penalty for improper crediting of partial
payments. As set forth in note 1 above, the applicable Commission regulation
requires partial payments “shall first be applied to the basic charges for residential
public utility service.” 52 Pa. Code § 56.23. PGW does not deny that it failed to
follow that mandate in crediting partial payments and that, instead, it improperly
credited partial payments to the most recent late charges. In light of the
Commission’s authority to impose a penalty of $1,000 per violation, we perceive no
abuse of discretion in the $2,000 penalty imposed here.
IV. Conclusion
Based on the foregoing discussion, we conclude that our Supreme
Court’s decision in PGW II applies retroactively only as to parties to this litigation
and to other proceedings pending at the time the PGW II decision was issued in April
2021. As agreed by the parties, we remand to the Commission solely for the
19
Regarding PGW’s assertion that the Commission should have provided it with the
opportunity to dispute discrepancies regarding the ordered refunds and billing adjustments at an
evidentiary hearing, we note that this question is not contained in the issues preserved for appellate
review in PGW I or in this Court’s August 3, 2021 order identifying the questions to be addressed
in the parties’ supplemental briefs. See PGW I, 222 A.3d at 1221; Cmwlth. Ct. Order, 8/3/21.
Likewise, we note that PGW’s present contention that the Commission lacked jurisdiction to
impose a penalty on the basis of PGW’s debt collection practices was not preserved for appellate
review. See id.
29
presentation of evidence by the parties and a determination by the Commission
concerning the correct amounts of any refunds owed by PGW. Based on due process
principles, we reverse the Commission’s imposition of a $25,000 monetary sanction
against PGW for late fees charged on municipal liens prior to April 29, 2021. We
affirm the Commission’s order mandating changes to PGW’s payment crediting
system. We reject, as moot, PGW’s challenge to the timetable for compliance with
the Commission’s order regarding billing changes, and we deny PGW’s request for
a further extension of time to comply with the Commission’s order. Finally, we
affirm the Commission’s imposition of a $2,000 penalty against PGW for violating
the Commission’s regulation governing the application of partial payments.
__________________________________
CHRISTINE FIZZANO CANNON, Judge
Judge Covey and Judge Wallace did not participate in the decision of this case.
30
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Philadelphia Gas Works, :
Petitioner :
:
v. :
:
Pennsylvania Public :
Utility Commission, : No. 1291 C.D. 2018
Respondent :
ORDER
AND NOW, this 16th day of March, 2022, upon consideration of the
petition for review filed by Philadelphia Gas Works (PGW), it is hereby ordered as
follows:
1. The decision of the Pennsylvania Supreme Court in Philadelphia
Gas Works v. Pennsylvania Public Utility Commission, 249 A.3d 963, 974 (Pa.
2021) (PGW II), reargument granted in part, 256 A.3d 1092 (June 15, 2021), on
reargument, 256 A.3d 1092 (Pa. 2021), applies retroactively only as to parties to this
litigation and to other proceedings pending at the time the PGW II decision was
issued on April 29, 2021.
2. As agreed by the parties, this matter is REMANDED to the
Pennsylvania Public Utility Commission (Commission) in part, solely for the
presentation of evidence by the parties and a determination by the Commission
concerning the correct amounts of any refunds owed by PGW to SBG Management
Services, Inc., Colonial Garden Realty Company and Simon Garden Realty
Company (collectively, Intervenors) relating to late fees charged on docketed
municipal liens against Intervenors for unpaid natural gas charges prior to April 29,
2021.
3. The Commission’s imposition of a $25,000 monetary sanction
against PGW for late fees charged on municipal liens prior to April 29, 2021 is
REVERSED.
4. The Commission’s order mandating changes to PGW’s billing and
payment crediting system is AFFIRMED.
5. The Commission’s 90-day timetable for compliance with the
Commission’s order regarding billing changes is AFFIRMED.
6. The Commission’s imposition of a $2,000 penalty against PGW for
violating the Commission’s regulation governing the application of partial payments
is AFFIRMED.
Jurisdiction is relinquished.
__________________________________
CHRISTINE FIZZANO CANNON, Judge
2