PPL Electric Utilities Corp. v. City of Lancaster and PA PUC

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

PPL Electric Utilities Corporation, :
Petitioner :
: No. 462 M.D. 2013
v. :
: Argued: June 17, 2015
City of Lancaster and Pennsylvania :
Public Utility Commission, :
Respondents :

BEFORE: HONORABLE DAN PELLEGRINI, President Judge
HONORABLE BERNARD L. McGINLEY, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Judge
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge

OPINION BY
JUDGE McCULLOUGH FILED: October 15, 2015

Presently before this Court is the application of PPL Electric Utilities
Corporation (PPL) for summary relief seeking a judgment in its favor with respect to
counts I, II, III, and V of its amended petition for review, specifically, a declaration
that several provisions of Administrative Ordinance No. 16-2013 (the Ordinance)
enacted by the City of Lancaster (City) are invalid and preempted by the Public
Utility Code (Code), 66 Pa.C.S. §§101-3316, and an order enjoining enforcement of
these provisions.

I. Facts and Procedural History
The underlying facts of this case are not in dispute. PPL is a public
utility, regulated by the Pennsylvania Public Utility Commission (PUC). PPL
provides electric service to the public pursuant to a PUC-approved tariff. Under its
tariff, PPL’s service territory covers 29 counties and 653 municipalities, including the
City. On May 28, 2013, the City enacted Administrative Ordinance No. 2-2013 for
the purpose of implementing a comprehensive program for management of the City’s
rights-of-way, including management of public utilities and public utility facilities
within these rights-of-way. The City also adopted, on this same day, a resolution
which set forth a fee schedule related to activities and uses in the public rights-of-
way.1 On September 17, 2013, PPL filed a petition for review in the nature of a
complaint in this Court’s original jurisdiction seeking declaratory and injunctive
relief. PPL joined the PUC as an additional defendant.

II. December 17, 2013 Ordinance
On December 17, 2013, the City enacted the Ordinance at issue, which
repealed the previously enacted Administrative Ordinance No. 2-20132 and
implemented another program for management of the City’s rights-of-way, again
including management of public utilities and public utility facilities within these
rights-of-way. The City relied on the powers granted to it under the Third Class City
Code (TCCC)3 and the Home Rule Charter and Optional Plans Law4 in enacting the
Ordinance.5

1
This fee schedule sets forth, inter alia, a five-year use permit fee, curb and sidewalk and
street opening permit and inspection fees, street opening degradation fees, pole
replacement/erection fees, a pole maintenance fee, and an annual assessment per linear foot of
underground and aerial facilities located in the City’s rights-of-way.

2
The fee resolution remained in effect.

3
Act of June 23, 1931, P.L. 932, as amended, 53 P.S. §§35101-39701.

4
53 Pa.C.S. §§2901-2984.
(Footnote continued on next page…)

2
 The Ordinance described the City’s rights-of-way as a “valuable
resource and asset, not only for City purposes, but also for the benefit of third-party
users, who rely upon the Rights-of-Way of the City for the installation and
maintenance of various facilities owned and operated by such third-parties to their
economic benefit . . . .” (Ordinance at 2.) The Ordinance stated that the management
and maintenance of the public rights-of-way represented a “significant continuing
operational and capitol cost” for the City, which, by extension, is passed on to City
taxpayers, residents, and business owners. Id. The Ordinance also stated that it was
necessary to recoup these maintenance and management costs from “the actual users
of such facilities” in the City’s rights-of-way. (Ordinance at 3.)
Section 263B of the Ordinance addresses PUC-regulated utilities and
purports to grant various powers to the City. For example, section 263B-3 authorizes
the City to conduct inspections to ensure that utility facilities within the rights-of-way
do not constitute a public safety hazard and remain in compliance with PUC
standards. Section 263B-4(6) authorizes the City to direct a utility to “temporarily or
permanently remove, relocate, change, or alter the position of any Facilities within
the Right-of-Way” under certain circumstances, including “the construction, repair,
maintenance, or installation of any City or other public improvement,” “the
operations of the City,” the “vacation of a Street or the release of a utility easement,”
or during emergency situations. (Ordinance at 7.) Additionally, section 263B-5
permits the City to impose an annual maintenance fee “in connection with the

(continued…)

5
However, the City is actually organized under the Optional Third Class City Charter Law,
Act of July 15, 1957, P.L. 901, as amended, 53 P.S. §§41101-41625.

3
ongoing use and occupancy of City Rights-of-Way” and section 263D-1 allows the
City to impose a penalty for a violation of any provision of the Ordinance that is not
within the exclusive jurisdiction of the PUC.6 (Ordinance at 8, 16.)

6
The relevant provisions of the Ordinance state, in full, as follows:

§263B-3 Right to Inspect

The City may conduct inspections of the City Rights-of-Way in order
to ensure that Utility Facilities located within such Rights-of-Way do
not constitute a public safety hazard, and remain in compliance with
the standards set forth by the [PUC]. Such inspections shall be
limited to establishing whether such Facilities meet relevant [PUC]
standards, and comply with such City construction standards as relate
to the opening and closing of City streets, curbs, and sidewalks, as
provided under 15 Pa.C.S. §1511(e). In the event that the City
determines that any Facilities of a Utility are not in compliance with
such standards, then the City may bring a complaint against such
Utility before the [PUC], in accordance with established [PUC]
procedures. The City may also elect, in its discretion, to notify the
Utility of the existence of any non-compliant Facilities, in order to
abate such violations without the need for the filing of a formal
[PUC] complaint.

§263B-4 Construction in the Rights-of-Way

...

(6) Relocation or Removal of Facilities. Within sixty (60) days
following written notice from the City, or such longer period as the
City determines is reasonably necessary or such shorter period in the
case of an Emergency, a Utility shall temporarily or permanently
remove, relocate, change or alter the position of any Facilities within
the Right-of-Way, excluding those underground, whenever the City,
consistent with [PUC] regulations, shall have determined that such
removal, relocation, change or alteration is reasonably necessary
under the following circumstances: the construction, repair,
maintenance, or installation of any City or other public improvement
in the Right-of-Way; the operations of the City or other governmental
entity in the Right-of-Way; vacation of a Street or the release of a
utility easement; or an Emergency as determined by the City.
Utilities must relocate and remove Facilities consistent with the
regulations and standards of the [PUC].
(Footnote continued on next page…)

4
(continued…)

...

§263B-5 Right-of-Way Maintenance Fee

(1) Compensation for Right-of-Way Use. Occupancy of City Rights-
of-Way by any Utility is subject to the City’s right to fix annually a
fair and reasonable compensation, which shall be directly related to
the City’s actual Right-of-Way maintenance costs.

(2) Annual Right-of-Way Maintenance Fee. Each Utility with
Facilities in the City’s Rights-of-Way shall pay an annual fee to
compensate the City for its costs incurred in connection with the
ongoing use and occupancy of City Rights-of-Way. The Annual
Right-of-Way Maintenance Fee shall be determined by the City and
authorized by resolution of City Council and shall be based on the
City’s actual [right-of-way] maintenance costs. The Annual Right-of-
Way Maintenance fee shall be fixed on a per-linear foot bases for
Underground Facilities and on a per linear foot basis for Aerial
Facilities. . . .

§263D-1 Penalties

(a) PUC Regulated Utilities. In the event a public utility is found by
the City to have violated a PUC regulation, standard, or order, then
the City may bring a complaint against such public utility before the
[PUC] for violation of such regulation, standard, or order. The City
may also notify the Utility of the existence of any suspected violation
of PUC standards, regulations or order[s] in order to obtain
compliance by the Utility.

In the event a public utility is found to have violated any other
provision of this Chapter that is not within the exclusive jurisdiction
of the PUC, then such public utility shall be subject, upon conviction
thereof, to a fine not exceeding three hundred dollars ($300), for each
and every offense, together with attorneys’ fees and costs, and in
default of the payment thereof, imprisonment for not more than
ninety (90) days. A separate and distinct violation shall be deemed to
be committed each day on which a violation occurs or continues to
occur. In addition to an action to enforce any penalty imposed by this
Chapter and any other remedy at law or in equity under this Title, the
City may apply to a Court of Common Pleas for an injunction or
other appropriate relief at law or in equity to enforce compliance with
(Footnote continued on next page…)

5
 III. Amended Petition for Review
PPL thereafter filed an amended petition for review seeking declaratory
and injunctive relief and joining the PUC as an additional defendant. PPL noted that
it is a regulated utility subject to the provisions of the Code and, in accordance with
certificates of public convenience issued by the PUC, was authorized to offer, render,
furnish, or supply utility service to nearly 1.4 million customers throughout its
certificated service territory, which encompasses approximately 10,000 square miles,
all or portions of 29 counties, and more than 630 cities, boroughs, and townships.
PPL also noted that it rendered service to the public in accordance with a PUC-
approved tariff, which includes a list of services, rules for service, and rates for
service.7 PPL stated that it owns, operates, and maintains approximately 43,000
miles of distribution lines, 5,000 miles of transmission lines, and 375 substations
within its certificated territory.
PPL argued, generally, that the Ordinance violated the policy of the
Commonwealth for a uniform, state-wide regulation of public utilities and public
utility facilities; was preempted by the Commission’s exclusive authority over the

(continued…)

or restrain violation of any provision of this Chapter which is not
subject to the exclusive jurisdiction of the PUC.

Nothing in this Section shall be construed to permit the City to
commence or attempt to commence prosecution of any PUC
Regulated Utility for a violation of any regulation, standard or order
of the PUC. . . .

(Ordinance at 6-8, 16.)

7
A tariff has the force of law and is binding on the utility and its customers. Pennsylvania
Electric Company v. Pennsylvania Public Utility Commission, 663 A.2d 281, 284 (Pa. Cmwlth.
1995).

6
location, construction and maintenance of all public utility facilities; exceeded the
City’s authority under the Pennsylvania Municipalities Planning Code (MPC);8
violated PPL’s statutory right under section 1511(e) of the Business Corporation Law
of 1988, 15 Pa.C.S. §1511(e), to use public rights-of-way without charge;9 and
imposed a fee schedule and penalties that amount to an unlawful tax.
More specifically, PPL’s amended petition for review included five
counts. In Count I, PPL alleged that the City’s assessment of an annual maintenance
fee under section 263B-5 and the fee resolution interfered with the PUC’s exclusive
jurisdiction and violated PPL’s rights under the MPC. Count II alleged that the
inspection requirements of section 263B-3 were preempted by the Code and violated
PPL’s rights under the MPC. Count III alleged that the Code preempted section
263D-1. Count IV alleged that the maintenance fee was an illegal tax. Count V
averred that the Ordinance’s relocation and removal provisions interfered with the
PUC’s exclusive jurisdiction and violated PPL’s rights under the MPC.10
The City filed preliminary objections alleging that this Court lacked
jurisdiction because the PUC was not an indispensable party to this action. The City
further alleged a demurrer as to all counts stating that it acted entirely within its
police powers in adopting the Ordinance, PPL failed to plead how the specific
Ordinance provisions interfere with the PUC’s exclusive jurisdiction or are

8
Act of July 31, 1968, P.L. 805, as amended, 53 P.S. §§10101-11202.

9
Section 1511(e) provides a public utility corporation with the “right to enter upon and
occupy streets, highways, waters and other public ways and places for one or more of the principal
purposes specified in subsection (a) (related to general rule that public utilities have the power of
eminent domain) and ancillary purposes reasonably necessary or appropriate for the
accomplishment of the principal purposes. . . .”

10
The amended petition for review contains two counts designated as Count IV. We
therefore refer to the second Count IV as Count V.

7
preempted by the Code, and the MPC is irrelevant to the present action. PPL filed a
response denying these allegations. By order dated April 28, 2014, this Court
overruled the City’s preliminary objections and directed the City to file an answer to
PPL’s amended petition for review.
The City later filed an answer denying the material allegations of PPL’s
amended petition for review and reiterating in new matter its previous assertions that
it acted entirely within its police powers in adopting the Ordinance and that PPL
failed to demonstrate how the specific Ordinance provisions interfere with the PUC’s
exclusive jurisdiction or are preempted by the Code. The City also asserted that the
PUC has no jurisdiction to regulate rights-of-way fees, including maintenance fees,
and that such fees are a method of cost recovery, not taxes. Both PPL and the PUC
filed answers to this matter, denying these assertions.

IV. Application for Summary Relief
PPL thereafter filed its application for summary relief which is presently
before this Court.11 PPL seeks a judgment in its favor with respect to counts I, II, III,
and V of its amended petition for review, a declaration that sections 263B, 263B-4(6),
263B-5, and 263D-1 of the City’s Ordinance are invalid and preempted by the Code,

11
Pa.R.A.P. 1532(b) states that “[a]t any time after the filing of a petition for review in an
appellate or original jurisdiction matter the court may on application enter judgment if the right of
the applicant thereto is clear.” Moreover, in ruling on a request for summary relief, this Court
“views the evidence in the light most favorable to the non-moving party, and enters judgment only
if there is no genuine issue as to any material fact and the right to relief is clear as a matter of law.”
Hospital & Healthsystem Association of Pennsylvania v. Commonwealth, 77 A.3d 587, 602 (Pa.
2013). “A fact is considered material if its resolution could affect the outcome of the case under the
governing law.” Id.

8
and an order enjoining the City from enforcing these provisions.12 We agree with
PPL that the Code preempts sections 263B, 263B-4(6), and 263D-1 of the City’s
Ordinance. However, we do not agree with PPL that the Code preempts the
imposition of an annual maintenance fee pursuant to section 263B-5 of the City’s
Ordinance.

V. Discussion
A. Preemption
“Municipalities are creatures of the state and have no inherent powers of
their own. Rather, they possess only such powers of government as are expressly
granted to them and as are necessary to carry the same into effect.” Huntley &
Huntley, Inc. v. Borough Council of Oakmont, 964 A.2d 855, 862 (Pa. 2009).
Additionally, under the law of preemption, “even in areas over which municipalities
have been granted power to act, the state may bar local governing bodies from
legislating in a particular field.” Hoffman Mining Company v. Zoning Hearing Board
of Adams Township, 32 A.3d 587, 593 (Pa. 2011).
In Hoffman Mining Company, our Supreme Court noted that there are
three generally recognized types of preemption:

(1) express or explicit preemption, where the statute
includes a preemption clause, the language of which
specifically bars local authorities from acting on a particular
subject matter; (2) conflict preemption, where the local
enactment irreconcilably conflicts with or stands as an
obstacle to the execution of the full purposes of the statute;
and (3) field preemption, where analysis of the entire statute

12
Alternatively, PPL alleges that, as a matter of statutory construction, the City’s authority
over rights-of-way must be limited so as to give effect to the Code, and the challenged provisions of
the Ordinance violate its statutory right to occupy a right-of-way.

9
 reveals the General Assembly’s implicit intent to occupy
the field completely and to permit no local enactments.
Id. at 593-94 (citations omitted).

B. Exclusive Authority of the PUC
The courts of this Commonwealth have long recognized the intent of our
General Assembly that public utilities be regulated on a uniform basis by a statewide
regulator and not be subject to the varied regulation of the many cities, townships,
and boroughs throughout the Commonwealth. Over 100 years ago, our Pennsylvania
Supreme Court addressed several ordinances passed by the city of York “for the
purpose of regulating the measuring of water supplied to consumers,” requiring York
Water Company to install meters, at its own expense, when requested by a consumer,
and prescribing penalties for failure to comply with the provisions of said ordinances.
York Water Company v. York, 95 A. 396, 396 (Pa. 1915). York Water Company filed
a bill in equity seeking to enjoin the city from enforcing these ordinances. The Court
of Common Pleas of York County issued a decree granting York Water Company a
perpetual injunction restraining the city from enforcement.
Referring to the predecessors of the current Code and PUC, the Supreme
Court held as follows:

There can be no reasonable doubt that the legislative
intention was to make the Public Service Act the supreme
law of the State in the regulation and supervision of public
service corporations, and this being so, it follows as a
necessary sequence that all laws inconsistent with the
powers thus conferred must be held to be repealed or
supplied thereby. . . 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
 We do not mean to be understood as saying that cities of the
third class, or of any other class for that matter, may not
under their police powers prescribe reasonable regulations
as a protection to the health, lives, property and safety of
their inhabitants, even as applied to public service
corporations. But such regulations are incidents of the
police power and must be so restricted. Under the guise of
a police regulation cities cannot undertake to determine the
reasonableness of rates charged by public service
corporations, nor can they prescribe regulations relating to
the facilities, service and business of such corporations.
These are the functions of the Public Service Commission
and must be so regarded. The legislature has so declared
and what the law making body does within the limit of its
powers becomes a rule of action binding upon all branches
of government, state or municipal, and upon the people as
well.
Id. at 396-97.
Nearly four decades later, our Supreme Court reaffirmed this policy in
Duquesne Light Company v. Upper St. Clair Township, 105 A.2d 287 (Pa. 1954). In
that case, Duquesne Light Company, an electric utility company, sought approval
from the PUC to build a transmission line through a residential area of Upper St.
Clair Township. The construction of this new transmission line required Duquesne
Light Company to obtain, by purchase or condemnation, various rights-of-way and
easements. The PUC issued the necessary certificates of public convenience to
Duquesne Light Company, which proceeded with the purchases and condemnation of
lands and later commenced construction of the new line. The township sought to
block the construction of the utility line towers on the grounds that their presence
would violate the township’s zoning ordinance. The township issued a notice of
work stoppage to Duquesne Light Company, advising that a building permit must be
secured and threatening the imposition of daily fines and the arrest of contractors if
construction continued without a permit.

11
 Duquesne Light Company filed an action in equity with the Court of
Common Pleas of Allegheny County seeking to enjoin the township from enforcing
its zoning ordinance. The common pleas court issued a decree, which granted the
requested injunctive relief. The Supreme Court affirmed, citing the PUC’s authority
under section 901 of the then-existing Public Utility Code13 to “supervise and
regulate all public utilities doing business within the Commonwealth,” and holding
that “the policy of the Commonwealth in entrusting to the Commission the regulation
and supervision of public utilities has excluded townships from the same field.”
Duquesne Light Company, 105 A.2d at 292. The court explained that:

The Public Utility 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 Public Utility Commission and to impose a
duty upon utilities to render efficient service. It is clear that
the proposed transmission line is necessary for the rendition
of efficient service to the public and that that necessity
transcends the legitimate objectives of any one of the
political subdivisions of the Commonwealth. We believe
that this is the reason why the General Assembly entrusted
the regulation of public utilities to a commission of state-
wide 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.
Id. at 293.
Twelve years later, in County of Chester v. Philadelphia Electric
Company, 218 A.2d 331 (Pa. 1966), the Supreme Court affirmed a common pleas

13
Act of May 28, 1937, P. L. 1053, formerly 66 P.S. §1341.

12
court decision declaring as unconstitutional a Chester County ordinance prohibiting
persons or corporations from constructing pipelines without submitting plans related
to the routes and use of such lines to the Chester County Planning Commission and
once again reaffirming the exclusive jurisdiction of the PUC with respect to
regulation of public utilities. The court held that:

The necessity for conformity in the regulation and control
of public utilities is as apparent as the electric lines which
one views traversing the Commonwealth. If each county
were to pronounce its own regulation and control over
electric wires, pipelines 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. It is for that
reason that the Legislature has vested in the Public Utility
Commission exclusive authority over the complex and
technical service and engineering questions arising in the
location, construction and maintenance of all public utilities
facilities. . . .
Id. at 333.
More recently, this Court reaffirmed this reasoning in PECO Energy
Company v. Township of Upper Dublin, 922 A.2d 996 (Pa. Cmwlth. 2007), and
Pennsylvania Power Company v. Township of Pine, 926 A.2d 1241 (Pa. Cmwlth.
2007), both of which invalidated a township’s attempt to regulate a public utility. In
Township of Upper Dublin, the township enacted an ordinance to regulate the manner
in which a public utility trims shade trees within the township’s rights-of-way. The
Court of Common Pleas of Montgomery County granted the motion of PECO Energy
Company for judgment in mandamus, holding that the township “possesses no
authority to regulate PECO’s vegetation management practices, which fall within the
Public Utility Code’s definition of ‘utility service’ and are solely regulated by the
[PUC].” Id. at 999.

13
 This Court affirmed, noting that PECO’s tariff specifically authorizes it
“to trim, remove, or separate trees, vegetation or any structures therein, which, in the
opinion of [PECO], interfere with its aerial conductors” and that “[p]ublic utility
tariffs have the force and effect of law, and are binding on the customer as well as the
utility.” Id. at 1004 (citations omitted). We also noted that, consistent with a public
utility’s duties under section 1501 of the Code, 66 Pa.C.S. §1501,14 and the Code’s
definition of service in section 102, 66 Pa.C.S. §102,15 “[u]tility service is not
confined to the distribution of electrical energy, but includes ‘any and all acts’ related
to that function,” such as vegetation management activities. Id. at 1005 (citing West
14
Section 1501 states as follows:

Every public utility shall furnish and maintain adequate, efficient,
safe, and reasonable service and facilities, and shall make all such
repairs, changes, alterations, substitutions, extensions, and
improvements in or to such service and facilities as shall be necessary
or proper for the accommodation, convenience, and safety of its
patrons, employees, and the public. Such service also shall be
reasonably continuous and without unreasonable interruptions or
delay. Such service and facilities shall be in conformity with the
regulations and orders of the commission. Subject to the provisions
of this part and the regulations or orders of the commission, every
public utility may have reasonable rules and regulations governing
the conditions under which it shall be required to render service. Any
public utility service being furnished or rendered by a municipal
corporation beyond its corporate limits shall be subject to regulation
and control by the commission as to service and extensions, with the
same force and in like manner as if such service were rendered by a
public utility. The commission shall have sole and exclusive
jurisdiction to promulgate rules and regulations for the allocation of
natural or artificial gas supply by a public utility.

15
Section 102 defines “Service,” in pertinent part, as “[u]sed in its broadest and most
inclusive sense, includes any and all acts done, rendered, or performed, and any and all things
furnished or supplied, and any and all facilities used, furnished, or supplied by public utilities, or
contract carriers by motor vehicle, in the performance of their duties under this part to their patrons,
employees, other public utilities, and the public . . . .”

14
Penn Power Company v. Pennsylvania Public Utility Commission, 578 A.2d 75, 77
(Pa. Cmwlth. 1990), appeal denied, 593 A.2d 429 (Pa. 1991)).
Most importantly, we concluded that “the legislature intended the Public
Utility Code to preempt the field of public utility regulation.” Township of Upper
Dublin, 922 A.2d at 1005 (emphasis added). Further, citing Duquesne Light
Company, County of Chester, and West Penn Power Company, as well as the PUC’s
electric safety and reliability regulations and its then-proposed inspection and
maintenance regulations, which directly conflicted with the township’s shade tree
ordinance, we held that the township was preempted by the Code and PUC
regulations “from applying its shade tree ordinance pruning standards to PECO’s
vegetation management practices.” Id.
In Township of Pine, the township denied the application of
Pennsylvania Power Company for a permit to install poles and utility lines along a
public right-of-way in the township. The township demanded that such service be
underground, consistent with an agreement entered into by the township and a private
developer with respect to a residential subdivision. Pennsylvania Power Company
appealed the denial of a permit to the common pleas court, which affirmed the
township’s denial based upon section 57.84 of the PUC regulations, 52 Pa. Code
§57.84, which requires that new distribution lines located within 100 feet of a
development be placed underground, “if practicable.” The common pleas court also
relied on Duquesne Light Company as support for its decision that the township may
define by ordinance a reasonable underground wiring district. On further appeal, this
Court vacated the decision of the common pleas court and directed that the matter be
transferred to the PUC.
We began our analysis by noting that the common pleas court
misinterpreted the holding in Duquesne Light Company, as that case “neither

15
expanded the authority of local government bodies over public utilities, nor
diminished the authority of the PUC. It simply reconciled two conflicting statutes
and reaffirmed the long line of decisions in this Commonwealth establishing that a
municipality may not, through ordinance or otherwise, compel the underground
installation of electric utilities.” Township of Pine, 926 A.2d at 1249 (emphasis in
original). Additionally, we noted that the township had never passed an ordinance or
regulation pursuant to its home rule powers that would require a utility to place its
lines underground, but instead relied upon its authority to issue permits under section
18 of the Act of May 11, 1911, P.L. 244, as amended, 53 P.S. §1991 (section 1991).16
However, we stated that the permit powers in section 1991 were not
unlimited, and that section 1991 had been repealed insofar as it was inconsistent with
section 1511(a)(2) of the Business Corporation Law of 1988 (BCL), which grants a
public utility “the right to take, occupy and condemn property” for the “transportation
of artificial or natural gas, electricity, petroleum or petroleum products or water or
any combination of such substances for the public.” 15 Pa.C.S. §1511(a)(2). In
addition, we cited section 1511(e) of the BCL, which specifically addresses a public
utility’s right to occupy streets and other public rights-of-way for the “placement,

16
This section addresses the use of streets by public utilities, providing as follows:

The proper corporate authorities of such municipality shall have the
right to issue permits determining the manner in which public service
corporations or individuals shall place, on or under or over such
municipal streets or alleys, railway tracks, pipes, conduits, telegraph
lines, or other devices used in the furtherance of business; and
nothing herein contained should be construed to in any way affect or
impair the rights, powers, and privileges of the municipality in, on,
under, over, or through the public streets or alleys of such
municipalities, except as herein provided.

16
maintenance and removal of aerial, surface and subsurface public utility facilities
thereon or therein.” 15 Pa.C.S. §1511(e).17
Construing section 1991, section 1511 of the BCL, and the Code
together, we held that the “the scope and breadth of [the township’s] permit authority
ha[d] been limited by Section 1511 of the BCL to matters of local concern,” i.e., the
time and manner of opening a street, and “[b]ecause the underground installation of a
distribution line within the Township's right-of-way is not, by statutory definition, a
matter of local concern, the Township has no authority to require Penn Power to
proceed in that fashion.” Township of Pine, 926 A.2d at 1251. Further, we
emphasized “the ‘initial and exclusive authority’ of the PUC to first determine public
utility regulatory matters. . . .” Id. at 1252. Because a question remained in that case
regarding whether, consistent with PUC regulations, the placement of underground

17
Section 1511(e) provides, in full, as follows:

A public utility corporation shall have the right to enter upon and
occupy streets, highways, waters and other public ways and places for
one or more of the principal purposes specified in subsection (a) and
ancillary purposes reasonably necessary or appropriate for the
accomplishment of the principal purposes, including the placement,
maintenance and removal of aerial, surface and subsurface public
utility facilities thereon or therein. Before entering upon any street,
highway or other public way, the public utility corporation shall
obtain such permits as may be required by law and shall comply with
the lawful and reasonable regulations of the governmental authority
having responsibility for the maintenance thereof.

We further noted in Township of Pine that the Amended Committee Comment-1990 to section 1511
of the BCL explains that “reference in the last sentence of subsection (e) to ‘permits’ is a
codification of the prior law relating to the time and manner of opening a street, etc., and is not
intended to imply a power to decide whether or not, and by whom, a type of utility service may be
offered by means of the contemplated facilities.” Id. at 1251 (citation omitted) (emphasis in
original).

17
utility lines was practicable, we vacated the common pleas court’s decision and
transferred the matter to the PUC.

C. City of Lancaster Ordinance
In the present case, the City similarly relies on section 1991 and section
1511(e) of the BCL as support for its authority to regulate utilities within its rights-
of-way. However, we reject these arguments based upon our decision in Township of
Pine. The City also relies on section 701 of the Code, 66 Pa.C.S. §701, and its police
powers under the TCCC. However, such reliance is misplaced. Section 701 of the
Code merely authorizes the City to file a written complaint with the Commission
whenever a public utility acts or fails to act in violation of “any law which the [PUC]
has jurisdiction to administer” or “any regulation or order of the [PUC].” 18 This
section does not convey any authority to municipal organizations, let alone empower
the City to enact ordinances regulating public utilities.

18
Section 701 provides in full as follows:

The commission, or any person, corporation, or municipal
corporation having an interest in the subject matter, or any public
utility concerned, may complain in writing, setting forth any act or
thing done or omitted to be done by any public utility in violation, or
claimed violation, of any law which the commission has jurisdiction
to administer, or of any regulation or order of the commission. Any
public utility, or other person, or corporation likewise may complain
of any regulation or order of the commission, which the complainant
is or has been required by the commission to observe or carry into
effect. The Commonwealth through the Attorney General may be a
complainant before the commission in any matter solely as an
advocate for the Commonwealth as a consumer of public utility
services. The commission may prescribe the form of complaints filed
under this section.
66 Pa.C.S. §701.

18
 The City cites its general police powers under former section 2403(60)
of the TCCC, which empowered it to “make and adopt all such ordinances, by-laws,
rules and regulations, not inconsistent with or restrained by the Constitution and
laws of this Commonwealth, as may be expedient or necessary for the proper
management, care and control of the city and its finances, and the maintenance of the
peace, good government, safety and welfare of the city. . . .” 53 P.S. §37403(60)
(emphasis added).19 The City also cites its general power under section 2915(3) of
the TCCC to keep its rights-of-way “in order and repair and in safe passable
condition.” 53 P.S. §37915(3). Again, however, neither of these provisions
authorizes the City to enact ordinances regulating public utilities. Moreover, similar
to Township of Upper Dublin, where the First Class Township Code (FCTC),20 the
authority upon which the township relied in enacting its shade tree ordinance,
contained a general repeal provision stating that nothing in that act shall “repeal or
modify any of the provisions of the [Code],”21 the TCCC includes a general repeal
provision at section 4701 stating that “[n]othing contained in this act shall be
construed to repeal any local or special laws; or to repeal the provisions of 66 Pa.C.S.
Pt. I, known as the Public Utility Code. . . .” 53 P.S. §39701.
Furthermore, the relevant provisions of the Ordinance implicate subjects,
including the inspection and location of utility facilities and the imposition of fees
and penalties, that are committed to the PUC’s exclusive jurisdiction by the Code.
We will discuss each of these provisions separately below.

19
This section was repealed by the Act of March 19, 2014, P.L. 52, and an analogous
provision was enacted at section 2435 of the TCCC, 53 P.S. §37435.

20
Act of June 24, 1931, P.L. 1206, as amended, 53 P.S. §§55101-58502.

21
See Section 3502 of FCTC, 53 P.S. §58502.

19
 Section 263B-3 of the Ordinance
Section 263B-3 of the Ordinance purports to authorize the City to
inspect public utility facilities to ensure that such facilities do not constitute a public
safety hazard and remain in compliance with PUC standards. As PPL states, this
provision essentially makes the City a regulator itself.
However, the General Assembly has declared, as the policy of this
Commonwealth, that because “continuing and ensuring the reliability of electric
service depends on adequate generation and on conscientious inspection and
maintenance of transmission and distribution systems, the independent system
operator or its functional equivalent should set, and the commission shall set through
regulations, inspection, maintenance, repair and replacement standards and enforce
those standards.” Section 2802(20) of the Code, 66 Pa.C.S. §2802(20). In this
regard, the Code specifically empowers the PUC to: appoint inspectors to ensure “the
proper conduct of the work of the [PUC],” and “for the purpose of enforcing the
[Code’s] provisions, sections 305(c) and 307 of the Code, 66 Pa.C.S. §§305(c), 307;
“investigate and examine the condition and management of any public utility,”
section 331 of the Code, 66 Pa.C.S. §331; and “enter upon the premises, buildings,
machinery, system, plant, and equipment, and make any inspection, valuation,
physical examination, inquiry, or investigation of any and all plant and equipment,
facilities, property. . . of any public utility,” section 506 of the Code, 66 Pa.C.S. §506.
In addition, the PUC has enacted regulations setting forth specific inspection and
maintenance standards relating to utility poles, overhead lines, transformers,

20
switching and protective devices, regulators, capacitors, and substations. See 52 Pa.
Code §57.198.22

Section 263B-4(6) of the Ordinance
Section 263B-4(6) of the Ordinance purports to grant the City the power
to order a public utility to remove, relocate, change, or alter the position of any
facilities within the right-of-way whenever the City determines that it is “reasonably
necessary” to do so “or such shorter period in the case of an Emergency.” However,
as our Supreme Court stated in County of Chester, “the Legislature has vested in the
[PUC] exclusive authority over the complex and technical service and engineering
questions arising in the location, construction and maintenance of all public
utilities facilities. . . .” 218 A.2d at 333 (emphasis added). In this regard, section
1505(a) of the Code directs the PUC as follows:

Whenever the commission, after reasonable notice and
hearing, upon its own motion or upon complaint, finds that
the service or facilities of any public utility are
unreasonable, unsafe, inadequate, insufficient, or
unreasonably discriminatory, or otherwise in violation of
this part, the commission shall determine and prescribe, by
regulation or order, the reasonable, safe, adequate,
sufficient, service or facilities to be observed, furnished,
enforced, or employed, including all such repairs, changes,
alterations, extensions, substitutions, or improvements in
facilities as shall be reasonably necessary and proper for the
safety, accommodation, and convenience of the public.

22
The City asserts that the PUC “has absolutely no infrastructure or staff to implement [its]
regulations or to conduct any inspections.” (Brief of City at 44) (Emphasis in original). However,
even if the City is correct, the lack of such staff does not empower the City to undertake the duties
specifically reserved to the PUC by statute and by the aforementioned case law declaring the PUC
to be the sole regulator of public utilities.

21
66 Pa.C.S. §1505(a). Further, the PUC has promulgated extensive regulations
relating to the location of line extensions, transmission lines, and underground
electric service. See 52 Pa. Code §§57.19, 57.71-57.77, 57.81-57.88, 69.3101-
69.3107.
The City contends that section 263B-4(6) does not conflict with the
Code. The City acknowledges the existence of the above-mentioned regulations,
which the City asserts specifically limit application of this section of the Ordinance.
The City cites that portion of section 263B-4(6) which states that “Utilities must
relocate and remove Facilities consistent with the regulations and standards of the
[PUC].” However, such limitation does not overcome the fact that section 263B-
4(6), like section 263B-3 above, essentially makes the City a regulator itself with the
authority to direct the relocation or removal of public utility facilities. Again, our
General Assembly and the courts of this Commonwealth have recognized that such
authority rests solely with the PUC.

Section 263B-5 of the Ordinance
Section 263B-5 seeks to impose an annual maintenance fee on any
public utility with facilities in the City’s rights-of-way. PPL argues that such a fee is
redundant to the annual assessment fee that it pays to the PUC for regulatory
expenses under section 510 of the Code, 66 Pa.C.S. §510. Section 510 of the Code,
66 Pa.C.S. §510, imposes an annual assessment on public utilities for its regulatory
expenses. The PUC calculates this assessment in accordance with a formula set forth
in section 510(b), which includes consideration of the amount of PUC expenditures
“directly attributable to the regulation of each group of utilities furnishing the same
kind of service” and the “gross intrastate operating revenues” and “sum of the debits”

22
of a particular utility group as compared to all utility groups. 66 Pa.C.S. §510(b)(1)-
(4).
However, as the City correctly notes, the proposed annual maintenance
fee represents the costs it expends to maintain the rights-of-way occupied by public
utilities and no section of the Code provides for an annual assessment of these costs.
Our Supreme Court has held that maintenance of rights-of-way is within the ambit of
the traditional exercise of municipal police powers and the assessment of a reasonable
fee for the recovery of costs incurred by the City expended in maintaining such
rights-of-way does not constitute local regulation of public utilities. See Adams v.
New Kensington, 55 A.2d 392, 394-95 (Pa. 1947); Kittanning Borough v. American
Natural Gas Company, 86 A. 717, 717-18 (Pa. 1913).
Moreover, we note that the City is a home rule municipality. As such, it
has the legal ability to assess fees for recovery of costs under its home rule powers,
which are not constrained by Dillon’s Rule, and generally enable it to undertake
government action unless preempted by a law of statewide applicability. Since the
Code does not preempt the imposition of an annual fee relative to the maintenance of
the City’s rights-of-way, it may do so provided the fee is reasonable in relation to the
costs incurred by the City for such purpose and not a tax.
Furthermore, we are not persuaded by PPL’s contention that the City’s
imposition of an annual maintenance fee will be ultimately passed back on to
consumers through the PUC’s ratemaking process. This contention is speculative and
presumes the PUC will merely rubberstamp a PPL rate increase and pass it along to
consumers, which in turn insinuates that the PUC will not exercise proper oversight
should PPL seek a rate increase. We are likewise not persuaded by PPL’s fears that
the impact on consumer rates could be magnified exponentially if each of the 652
municipalities in PPL’s service territory imposed their own annual maintenance fees.

23
This argument is not only speculative but specious as the same could be said of any
kind of local government assessment for taxes or fees. Such an argument is also best
directed to the legislative branch of government which can revise the Code to
preempt the imposition of local maintenance fees for public rights-of-way.
In light of the above, the issue as to the imposition of an annual right-of-
way fee is not whether it is preempted by the Code, but whether the fee is reasonable
and not a tax. This issue cannot be determined at this summary stage of the
proceedings and may require further factual development; hence, we must deny
PPL’s application for summary relief as to Count I of its amended petition for review.

Section 263D-1 of the Ordinance
Section 263D-1 addresses both PUC-regulated utilities (263D-1(a)) and
non-PUC-regulated entities (263D-1(b)). Regarding the former, this section seeks to
permit the City to bring a complaint against a public utility “[i]n the event a public
utility is found by the City to have violated a PUC regulation, standard, or order . . . .”
This section also permits the City to “notify the Utility of the existence of any
suspected violation of PUC standards, regulations or order [sic] in order to obtain
compliance by the Utility.” Additionally, this section states that if a public utility is
found to have violated any provision of the Ordinance that is not within the PUC’s
exclusive jurisdiction, then the public utility “shall be subject, upon conviction
thereof, to a fine not exceeding three hundred dollars ($300), for each and every
offense, together with attorneys’ fees and costs, and in default of the payment thereof,
imprisonment for not more than ninety (90) days.” Further, this section deems each
day a violation continues to occur as a separate and distinct violation.
We agree with PPL that section 263D-1(a) attempts to impose an
overlapping enforcement regime for public utilities that is preempted by the Code.

24
As noted above, section 1505 of the Code specifically authorizes the PUC, by its own
motion or upon the filing of a complaint by a third party, to: convene a hearing; make
findings regarding the reasonableness, safety, adequacy, and sufficiency of a public
utility’s service and/or facilities; and to prescribe, by regulation or order, any
necessary repairs, changes, alterations, extensions, substitutions, or improvements in
this service or facilities. Additionally, section 3301(a) of the Code, 66 Pa.C.S.
§3301(a), provides for the imposition of civil penalties against a public utility for any
violation of the Code, PUC regulation, or PUC final determination or order. Section
3301(b) addresses continuing offenses and states that “[e]ach and every day’s
continuance in the violation of any regulation or final direction, requirement,
determination, or order of the commission . . . shall be a separate and distinct
offense.” 66 Pa.C.S. §3301(b).
Moreover, section 3314(a) of the Code sets forth a three-year statute of
limitations for the recovery of any penalties or forfeitures incurred under the Code,
commencing from the “date at which the liability therefor arose. . . .” 66 Pa.C.S.
§3314(a). Furthermore, the PUC has promulgated its own investigation and
enforcement regulation, 52 Pa. Code §57.197, as well as a regulation setting forth the
factors and standards that the PUC will consider in imposing penalties or approving
settlements for a violation, 52 Pa. Code §69.1201.
The City contends that the Ordinance does not create an overlapping
enforcement regime, but instead recognizes the jurisdiction of the PUC. In support of
this contention, the City cites that portion of section 263D-1(a) limiting imposition of
fines to violations of Ordinance provisions “not within the exclusive jurisdiction of
the PUC” and recognizing that “[n]othing in this Section shall be construed to permit
the City to commence or attempt to commence prosecution of any PUC Regulated
Utility for a violation of any regulation, standard or order of the PUC.” The City

25
notes that, in such situations, its only recourse is to file a complaint with the PUC
under section 701 of the Code.
However, the City ignores that portion of section 263D-1(a) that permits
the City to independently contact a public utility and advise the public utility of the
City’s perceived violations of the Code or the PUC’s regulations or orders. Similar to
the aforementioned sections of the Code, section 263D-1(a) essentially makes the
City a regulator itself. Indeed, in its answer and new matter to PPL’s amended
petition for review, the City conceded that the Ordinance was an attempt to exercise
“concurrent” authority with the PUC over management of its rights-of-way. (City’s
Answer and New Matter, May 27, 2014, ¶111.)

Conclusion
Summary relief is appropriate where there are no genuine issues of
material fact and the right to relief is clear as a matter of law. Pa.R.A.P. 1532(b);
Hospital & Healthsystem Association of Pennsylvania. A century of case law has
firmly established that the General Assembly’s intent in enacting the Code and its
predecessor statute was to provide for the uniform, statewide regulation of public
utilities and public utility facilities. Indeed, this Court has expressly held that “the
legislature intended the Public Utility Code to preempt the field of public utility
regulation.” Township of Upper Dublin, 922 A.2d at 1005. For the reasons stated
above, we conclude that sections 263B-3, 263B-4(6), and 263D-1 of the City’s
Ordinance are preempted by the Code, and, hence, are invalid. However, we
conclude that section 263B-5 of the City’s Ordinance, by which the City imposes an
annual right-of-way maintenance fee based only on its costs to maintain the same, is
not a public utility regulation and, hence, is neither preempted by the Code nor
invalid.

26
 Because no genuine issues of material fact remain to be decided as to
counts II, III, and IV of PPL’s amended petition for review and PPL has established a
clear right to relief as a matter of law, we grant PPL’s application for summary relief
and enter judgment in its favor with respect to these counts. The City is specifically
enjoined from enforcing sections 263B-3, 263B-4(6), and 263D-1 of its Ordinance.23
However, because we disagree with PPL that section 263B-5 of the City’s Ordinance
is preempted by the Code, we deny PPL’s application for summary relief as to Count
I of its amended petition for review.24 As noted above, the issues regarding the
reasonableness of the annual maintenance fee imposed under section 263B-5 of the
City’s Ordinance, and whether said fee is a tax, may require further factual
development before this Court.

________________________________
PATRICIA A. McCULLOUGH, Judge

Judge McGinley dissents.
Judge Leadbetter joins in part but dissents to maintenance fee (Section 263B-5) only.

23
Based upon this determination, we need not address PPL’s alternative arguments relating
to statutory construction and its right to occupy a right-of-way.

24
The dissent would deny PPL’s application for summary relief and hold that none of the
relevant sections of the City Ordinance are preempted by the Code because section 1511(e) of the
BCL requires public utilities to comply with a municipality’s “reasonable regulations.” 15 Pa.C.S.
§1511(e). The Majority does not deny that a municipality owns a right-of-way, that it has a duty to
maintain the right-of-way, or that it may enact “reasonable regulations” with respect to a right-of-
way. Indeed, we have denied PPL’s application for summary relief relating to the City’s imposition
of an annual maintenance fee. However, the dissent ignores that these “reasonable regulations” are
subject to the restrictions imposed by the General Assembly under the Code, as well as over 100
years of case law which recognized the Code as “the supreme law of the State,” York Water
Company, 95 A. at 397, and preempting “the field of public utility regulation,” Township of Upper
Dublin, 922 A.2d at 1005. As the Majority notes above, the relevant provisions of the City’s
Ordinance implicate subjects that are committed to the PUC’s exclusive jurisdiction under the
Code.

27
 IN THE COMMONWEALTH COURT OF PENNSYLVANIA

PPL Electric Utilities Corporation, :
Petitioner :
: No. 462 M.D. 2013
v. :
:
City of Lancaster and Pennsylvania :
Public Utility Commission, :
Respondents :

ORDER

AND NOW, this 15th day of October, 2015, the application for
summary relief filed by PPL Electric Utilities Corporation (PPL) is granted as to
counts II, III, and V of its amended petition for review. We hereby declare
sections 263B-3, 263B-4(6), and 263D-1 of the December 17, 2013 Ordinance
enacted by the City of Lancaster (City) to be preempted by the Public Utility Code,
and enjoin the City from enforcing these sections. PPL’s application for summary
relief as to Count I is denied. Section 263B-5 of the City’s Ordinance is not
preempted by the Code.

________________________________
PATRICIA A. McCULLOUGH, Judge
 IN THE COMMONWEALTH COURT OF PENNSYLVANIA

PPL Electric Utilities Corporation, :
Petitioner :
:
v. : No. 462 M.D. 2013
: Argued: June 17, 2015
City of Lancaster and Pennsylvania :
Public Utility Commission, :
Respondents :

BEFORE: HONORABLE DAN PELLEGRINI, President Judge
HNORABLE BERNARD L. McGINLEY, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Judge
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge

DISSENTING OPINION BY
PRESIDENT JUDGE PELLEGRINI FILED: October 15, 2015

The City of Lancaster (City), a home rule municipality,1 enacted Chapter
263 of the City Code entitled “Right of Way Management” imposing certain
requirements on entities whose facilities occupy the City’s right-of-way, including
public utilities. The issue in this case is whether the Public Utility Code2 preempts

1
Lancaster adopted a home rule form of government under the former Third Class City
Optional Charter Law (Optional Charter Law), Act of July 15, 1957, P.L. 901, as amended, 53 P.S.
§§41101-41625. That Act has been supplanted by the Home Rule Charter and Optional Plans Law,
53 Pa. C.S. §§2901-3171. For a full discussion, see Harrisburg School Dist. v. Hickok, 781 A.2d
221, 239 (Pa. Cmwlth. 2001).

2
66 Pa. C.S. §§101-3316.
local municipalities from including public utilities in a comprehensive management
plan that seeks to regulate the occupation of the public right-of-way between the
varying public and private interests whose facilities occupy the public streets. With
the exception of a provision that imposes an annual maintenance fee, the majority
finds that the comprehensive plan provisions are preempted by the Public Utility
Code. Because I would find that the right-of-way comprehensive management plan
embodied in Chapter 263 of the City Code is specifically recognized rather than be
preempted,3 I respectfully dissent.

I.
Before examining whether municipalities have been preempted from
regulating public utilities, we must first look at the nature of the right-of-way.4 When

3
While it is often said that municipalities are creatures of the General Assembly and possess
only such powers that are expressly granted to them, those formulations have not been accurate
since our Constitution was amended in 1968 to provide that “[t]he General Assembly shall provide
by general law for local government within the Commonwealth.” Pa. Const. art. IX, §1. Since
then, local government is an absolute right and the state cannot take it away. The Pennsylvania
Constitution also provides that “[m]unicipalities shall have the right and power to frame and adopt
home rule charters….” Pa. Const. art. IX, §2. Home rule means that it is not the state’s prerogative
to run and operate the machinery of local government, but to provide for it and to put it in operation
and that a home rule municipality “may exercise any power or perform any function not denied by
this Constitution, by its home rule charter or by the General Assembly at any time.” Id. Precisely
speaking, municipalities are not creatures of the General Assembly, but creatures of the Constitution
so that local matters are addressed by local citizens and the officials that they elect.

4
The public right-of-way is composed of the street which encompasses two distinct
portions: the roadway used for vehicles and the sidewalk for pedestrians. Mercantile Library Co. v.
Fidelity Trust Co., 83 A. 592 (Pa. 1912). It can include the pavement, shoulders, gutters and curbs
within the street lines. Granchi v. Borough of North Braddock, 810 A.2d 747 (Pa. Cmwlth. 2002).
The roadway is generally accepted as the paved and traveled portion. Babcock v. Department of
Transportation, 626 A.2d 672 (Pa. Cmwlth. 1993), appeal denied, 639 A.2d 53 (Pa. 1994). While
the sidewalk is a place set apart at the side of a street for use by that portion of the public who
travels on foot, it need not be improved to be a sidewalk. Callahan v. A. Wishart & Sons Co., 76
(Footnote continued on next page…)

DRP - 2
a municipality, by dedication or otherwise, obtains a public right-of-way, it is held in
trust for the public. A municipality is not restricted to using the street only for the
public’s right of passage and may allow additional use of the right-of-way as long as
it is for a use that serves the public generally, is consistent with its use as a public
street, and does not burden the abutting property owner’s property. In re City of
Altoona, 388 A.2d 313 (Pa. 1978). However, the fee owner does not surrender his
entire title to the land so dedicated, but reserves the fee in the residue and may
exercise full rights of ownership to that residue, above and below the surface.
Breinig v. County of Allegheny, 32 A.2d 842 (Pa. 1938); Gramlich v. Lower
Southampton Township 838 A.2d 843 (Pa. Cmwlth. 2003); Miller v. Nichols, 526
A.2d 794 (Pa. Super. 1987).

Initially, whether the occupation of the street by public utilities and
street railroads was for a public purpose was problematic because the nature of the
company was partly public and partly private, that is, although for-profit, it had
public privileges and public duties. Delos F. Wilcox, Municipal Franchises, Vol. II,
§277 (1910). See also Shuster v. Central District & Printing Telephone Co., 34 Pa.
Super. 513 (1907) (property owner entitled to compensation for telephone wires
placed along street); Berlew v. Electric Illuminating Company, 1 Pa. C.C. 651
(Northumb. 1886) (requiring utility to pay the owner of abutting property
compensation for putting poles and wires along the street). However, later, public

(continued…)

A.2d 386 (Pa. 1950). The remainder of the public right-of-way is that area not used for either
streets or sidewalks occupied by public utilities, cable and water and sewer lines and such.

DRP - 3
utilities, cable, sewer, water, street railways, subways and steam heat were held for
public purposes and could occupy the right-of-way without compensating the
abutting property owner.5

As a result, beneath the streets of a municipality exists a network of
walls, columns, cable pipes and tunnels that go over and around each other that are
required to service the needs of the municipality’s inhabitants. Some of those
facilities are those of public utilities that are subject to regulation by the Public Utility
Commission (PUC); cable providers are regulated, in part by the federal government,
while others by the municipality itself or municipal authorities and some by the
adjoining properties who have lateral lines in the right-of-way to service their
properties as well as vaults in the right-of-way.

5
Prior to 1966, the extent of a public use easement varied according to whether the street or
road was located in an urban or rural area. Rural roads were held to be for public passage only,
whereas city streets were for “any public service.” 46 South 52nd Street Corp. v. Manlin, 157 A.2d
381, 386 (Pa. 1960). See also William Laubach & Sons v. City of Easton, 32 A.2d 881 (Pa. 1943).
In 1966, the Supreme Court discarded the distinction between city streets and rural roads and held
that the rule applicable to city streets was equally applicable to rural roads. Pittsburgh National
Bank v. Equitable Gas Co., 220 A.2d 12 (Pa. 1966). The court held that a subsurface pipeline
which had been laid in the bed of a township road did not constitute an additional burden upon the
abutting land. “[A]n existing street or public road,” the Court said, “may be used for any public
service without additional compensation due the abutting landowner.” Id. at 14. “[W]hen any
public road is established, it is clearly for the purpose of public travel and commerce.” Id. at 16.
The Court reasoned: “As the means and modes of public commerce increase, what at one time
would have been considered a burden on the abutting landowner is no longer so.... Evolutionary
changes must be considered in determining whether a burden is imposed on the servient tenement.”
Id. See also Smith v. Adams, 523 A.2d 788 (Pa. Super. 1987). Of course, “[i]f a use obstructs the
abutting land or is of a new nature not in accord with the mainstream of today’s commerce, it will
still be held a violation of the landowner’s rights.” Pittsburgh National Bank, 220 A.2d at 16 n.2.

DRP - 4
 The question then is who is going to facilitate and arbitrate all of those
competing interests in the right-of-way, which are owned, operated and regulated by
different entities, so that the public interest in all of them can be served. The answer
to that question is simple: the municipality that owns and maintains the right-of- way
in trust for the public, i.e., their citizens.

II.
In general, a municipality has the right to regulate the public right-of-way.
Shuck v. Borough of Ligonier, 22 A.2d 735 (Pa. 1941). Also, in general, a municipality
can decide what entity is authorized in the right-of-way and under what conditions.
That is only true “in general” because a municipality cannot prevent a public utility
from using its right-of-way. However, it is also clear that a municipality can subject the
public utility to “reasonable regulations.” Section 1511(e) of the Business Corporation
Law of 1988 (BCL), 15 Pa. C.S. §1511(e), gives the power to a public utility to place
its public utility facilities in the right-of-way and also specifically subjects them to
reasonable municipal regulation. It provides:

A public utility corporation shall have the right to enter upon
and occupy streets, highways, waters and other public ways
and places for one or more of the principal purposes specified
in subsection (a) and ancillary purposes reasonably necessary
or appropriate for the accomplishment of the principal
purposes, including the placement, maintenance and removal
of aerial, surface and subsurface public utility facilities
thereon or therein. Before entering upon any street,
highway or other public way, the public utility
corporation shall obtain such permits as may be required
by law and shall comply with the lawful and reasonable
regulations of the governmental authority having
responsibility for the maintenance thereof.

DRP - 5
15 Pa. C.S. §1511(e) (emphasis added),

Note that this provision gives public utilities the right to occupy the right-
of-way; it does not give them the right to place facilities anywhere that they want. That
is subject to reasonable regulation by the municipality.

Chapter 263 of the City Code regulates any entity that occupies the right-
of-way. Recognizing that some facilities also have obligations to other regulators, it
makes distinctions between public utilities, non-public utilities, and cable companies
that occupy the right-of-way under franchises awarded by the City. Section 263B of the
City Code addresses PUC-regulated utilities and authorizes the City to:

• conduct inspections to ensure that utility facilities in
the rights-of-way do not constitute a public safety hazard and
are in compliance. If they are not in compliance with such
standards, it authorizes the City to bring a complaint before
the PUC to seek compliance. It also allows the City to notify
the Utility of the existence of any non-compliant facilities to
voluntarily abate such violations. (Section 263B-3; Section
263D-1).

• direct a utility to “temporarily or permanently remove,
relocate, change, or alter the position of any facilities within
the Right-of-Way” under certain circumstances, including
“the construction, repair, maintenance, or installation of any
City or other public improvement,” “the operations of the
City,” the “vacation of a Street or the release of a utility
easement,” or during emergency situations. Section 263B-
4(6).

• imposition of an annual maintenance fee “in
connection with the ongoing use and occupancy of City
Rights-of-Way.” (Section 263B-5).

DRP - 6
 • allows for the imposition of a penalty for a violation of
any provision of the Ordinance that is not within the
exclusive jurisdiction of the PUC. (Section 263D-1). (The
majority does not discuss this provision because it is not
preempted by its very terms.)

I see nothing at this stage of the proceeding in these provisions that is preempted by the
Public Utility Code and nothing that constitutes an “unreasonable regulation” within the
meaning of Section 1511(e) of the BCL.

Section 263B-3 of the City Code, which authorizes the City to inspect
public utility facilities to ensure that such facilities do not constitute a public safety
hazard and remain in compliance with PUC standards, does not make the City a
regulator, but is more like an instruction to the charged employees to make sure that
the right-of-way is safe for the public, the abutting owner and other users of the right-
of-way. If a public utility facility is in such a condition as to pose a public safety
hazard, Section 263D-1 only authorizes the City to file a complaint before the PUC to
see that the public safety hazard is abated or to seek voluntary compliance from the
public utility. Moreover, it follows the procedure specifically outlined in Section
1505(a) of the Public Utility Code, 66 Pa. C.S. §1505(a), set forth below.

The majority finds that Section 263B-4(6)’s provision allowing it to
grant to the City the power to order a public utility to remove, relocate, change or
alter the position of any facilities within the right-of-way whenever the City
determines that it is “reasonably necessary” to do so “or such shorter period in the
case of an emergency” is preempted. It cites to Section 1505(a) of the Public Utility
Code, which provides:

DRP - 7
 Whenever the commission, after reasonable notice and
hearing, upon its own motion or upon complaint, finds
that the service or facilities of any public utility are
unreasonable, unsafe, inadequate, insufficient, or
unreasonably discriminatory, or otherwise in violation of
this part, the commission shall determine and prescribe, by
regulation or order, the reasonable, safe, adequate,
sufficient, service or facilities to be observed, furnished,
enforced, or employed, including all such repairs, changes,
alterations, extensions, substitutions, or improvements in
facilities as shall be reasonably necessary and proper for the
safety, accommodation, and convenience of the public.

66 Pa. C.S. §1505(a) (emphasis added). In essence, the majority reasons that the
power to determine where facilities are located in the right-of-way does not fall
within Section 1511(e) of the BCL giving municipalities the power to enact “lawful
and reasonable regulations” regarding the right-of-way because it is not a matter of
“local concern” and must be handled by the PUC as matter of statewide concern.

What that ignores is that what goes on in the right-of-way is a matter of
local concern because municipalities are the ones that own and maintain them. If, for
example, there is a gas line break 12 feet under a municipal water line, an order
directing that the water line be temporarily relocated is eminently reasonable. Squarely
put, the PUC could not issue such an order because it has no jurisdiction to order a
municipal entity to move the line. That is why the General Assembly authorized
municipalities to enact “reasonable regulations” concerning the public utilities’ use of
the right-of-way.

Moreover, we must remember that the right-of-way is a finite resource and
all of the public users have to be accommodated, not just the public utilities. The PUC

DRP - 8
only regulates public utility services and does not have any power over non-public
utility users of the right-of-way. If it is determined that a cable or a water line has to be
moved to accommodate a needed public utility service, it cannot order that those
facilities have to be moved; only the local municipality which owns the right-of-way in
trust for the public has the power to do so and to balance the interests of those involved.

Because Section 1511(e) of the BCL gives the power to municipalities to
enact reasonable regulations, the municipality owns the right-of-way and I would deny
PPL Electric Utilities Corporation’s application for summary relief for the foregoing
reasons. Accordingly, I respectfully dissent.

___________________________________
DAN PELLEGRINI, President Judge

Judge McGinley joins in this dissenting opinion.

DRP - 9