Western Pennsylvania Water Co. v. Pennsylvania Public Utility Commission

OPINION OF THE COURT

POMEROY, Justice.

In this appeal we are again asked by the Pennsylvania Public Utility Commission to establish the proposition that the Commission has been statutorily empowered to order a public utility to extend its service to customers located outside of its certificated service area. In an earlier litigation, the Commonwealth Court held the Commission powerless so to order. Akron v. Pa. P.U.C., 2 Pa.Cmwlth. 625 (1971). This Court vacated the order of the Commonwealth Court in that case, but for a procedural reason which did not reach the merits of the Commission’s contention. Akron Borough v. Pa. P.U.C., 453 Pa. 554, 310 A.2d 271 (1973). In this ease, the Commonwealth Court has again held that the Commission lacks that power. Western Pennsylvania Water Company v. Pa. P.U.C., 10 Pa.Cmwlth. 533, 311 A.2d 370 (1973). We granted allocatur because of the important question of administrative law presented. On this record we again do not reach the merits of the question of agency power which is tendered, but remand for further proceedings.

I.

A brief historical summary is in order:

In 1966 the Commission, departing from its own precedents, ordered a municipality, operating as a public utility beyond its own boundaries but within a certificated service area, to provide water service to a customer located outside the certificated area. Hoffman v. City of Erie, 42 Pa.P.U.C. 656 (1966). Two years later, the Commission entered a similar order against a privately-owned water company. Kriley v. Butler Water Company, 43 Pa.P.U.C. 586 (1968). Neither of these orders of the Commission was appealed to a court.

In 1967 a private citizen filed a complaint with the Commission against Akron Borough, a municipal corporation which was acting as a public utility in providing water service beyond its municipal boundaries but within a certificated service area, seeking to obtain an extension of service to land of the complainant. The Commission undertook to hear and determine that complaint, but Akron Borough filed a suit within the original jurisdiction of the Commonwealth Court and sought an injunction against the Commission so proceeding.1 The Commonwealth Court held the Commission powerless to act and granted the injunction.2 On appeal to this Court, we vacated the injunction and remanded with direction to dismiss the Borough’s complaint. It was our view that the Legislature, in enacting the provision of the Public Utility Law authorizing such suits, did not “intend to create any, different test for determining in what circumstances a superior court . . . would be justified in prohibiting proceedings in an inferior tribunal” than is customarily applied in determining whether a common law writ of prohibition would issue. 453 Pa. at 564-65, 310 A.2d 271. We noted that absent some administrative hearing at which the facts underlying a complaint seeking service extension might be established, we were being asked to interpret the Public Utility Law and to weigh constitutional questions in vacuo.3

In 1972, subsequent to the Commonwealth Court’s opinion in Akron Borough (1971) but prior to this Court’s opinion in Akron Borough (1973), appellee here, the Western Pennsylvania Water Company, a private public utility corporation, filed an application with the Commission for a certificate of public convenience permitting the company to provide water service to 17 additional customers along a short stretch of road in Butler County outside of its certificated area. The application was routine and was unopposed; no hearing on it was held. On February 13, 1973, the Commission granted the application, but subject to a condition which was as follows:

“It being a condition of such certification that Western Pennsylvania Water Company recognize, and accede to, the right of the Commission to order extension of service in the future should such be appropriate in the Commission’s view.”

The Water Company refused to accept the certificate so conditioned, and appealed to the Commonwealth Court.4 In a “long form” opinion and order dated May 1, 1973,5 the Commission frankly stated that its purpose in including the condition was to avoid the Commonwealth Court’s holding in Akron Borough that the Commission was without power to order a utility to provide service beyond its certificated service area.

The Commonwealth Court, as earlier stated, held the Commission to be without such jurisdiction and hence powerless to insist on the condition. The court therefore vacated that portion of the Commission’s May 1, 1973 order which set forth the disputed jurisdictional condition above quoted, but affirmed in all other respects.

II.

It comes as a surprise that the Commission should seek to avoid the Commonwealth Court’s holding in Akron Borough by insisting that a utility such as appellee subscribe to a concept of the Commission’s power which is the exact opposite of that entertained by that court.6 Administrative agencies are creatures of the legislature and have only those powers which have been conferred by statute. Day v. Public Service Commission, 312 Pa. 381, 167 A. 565 (1933); Community College of Delaware County v. Fox, 20 Pa.Cmwlth. 335, 342 A.2d 468 (1975); City of Pittsburgh v. Milk Marketing Board, 7 Pa.Cmwlth. 180, 299 A.2d 197 (1973). An administrative agency cannot by mere contrary usage acquire a power not conferred by its organic statutes. Commonwealth v. American Ice Co., 406 Pa. 322, 178 A.2d 768 (1962). It is settled that jurisdiction of a court cannot be extended or conferred by agreement. Calabrese v. Collier Township Municipal Authority, 430 Pa. 289, 240 A.2d 544 (1968); Appeal of Kramer, 445 Pa. 238, 282 A.2d 386 (1971); McConnell v. Schmidt, 234 Pa.Super. 400, 339 A.2d 578 (1975); Employees of Oil City Hospital v. Service Employees International Union, Local 227, AFL-CIO, 18 Pa.Cmwlth. 192, 335 A.2d 537 (1975); it must follow, a fortiori, that an administrative agency cannot acquire jurisdiction by agreement. Nor is it for the agency to seek to create or assure its own jurisdiction by insisting that applicants subscribe to the agency’s view of what public policy requires. Drexelbrook Associates v. Pa. P.U.C., 418 Pa. 430, 212 A.2d 237 (1965).7

It follows that the Commission, in attempting to insert the disputed jurisdictional condition into the certificate of public convenience, was engaging in a futile act. If, the Commonwealth Court to the contrary, the legislature has in fact endowed the Commission with the power it claims, then the condition would be a truism. If the Commission has no such jurisdiction, then the attempt to create such jurisdiction by agreement with the Water Company would be invalid. We are of the view that the Commission’s attempt to resolve a dispute of statutory jurisdiction by imposition in a certificate of a condition supportive of its view is an error of law. See 66 P.S. § 1437 (1959).8

Because we must reject the Commission’s attempt to settle a difficult question of its own jurisdiction in the fashion it has here employed, we must decline once again, as we did in Akron Borough, to pass upon the merits either of the Commission’s claim of jurisdiction to order a utility to extend service to a point beyond its certificated service area, or of the Water Company’s claim that its constitutional rights would be infringed and its property unlawfully confiscated were the Commission to exercise the power it asserts. As we observed in our Akron Borough decision, “ [t] he line between constitutional regulation and unconstitutional taking is almost never discernible in absence of a concrete factual situation.” 453 Pa. at 565, 310 A.2d at 277. Regrettably, we again have no “concrete factual situation” from which to adjudicate either the jurisdictional or constitutional issues which are involved.9

While we do not understand from this record that there are facts connected with the instant application which might have caused the Commission to refuse to grant a certificate without the disputed condition, we nevertheless recognize that the possibility exists. See 4 K. C. Davis, Administrative Law Treatise, § 2910 at 183-84 (1958). Rather than affirm the order of the Commonwealth Court which excised the disputed condition from the P.U.C.’s order and affirmed the order as thus altered, we will vacate the order of the Commonwealth Court and vacate the order of the Commission granting the certificate of public convenience, and remand to the Commission for further proceedings consistent with this opinion.

It is so ordered.

MANDERINO, J., did not participate in the consideration or decision of this case.

ROBERTS, J., filed a dissenting opinion in which JONES, C. J., joins.

1 Public Utility Law § 1111, Act of May 28, 1937, P.L. 1053, art. XI, as amended by Act of June 3, 1971, P.L. 137, No. 6, § 1, 66 P.S. § 1441 (Supp.1976-77) provides:

“No injunction shall issue modifying, suspending, staying, or annuling any order of the commission, or of a commissioner, except in a proceeding questioning the jurisdiction of the commission, and then only after cause shown upon a hearing.”

2 Judge Manderino, now a Justice of this Court, dissented.

3 In commenting on the closeness of the jurisdictional issue presented in Akron Borough, we observed in a footnote:

“[A]bsent the single fact that appellee is a Borough and not a private corporation, the power of the Commission after hearing to order extensions of service would be unquestioned.” 453 Pa. at 563, n. 9, 310 A.2d at 276.

The instant litigation has impressed upon us that the question of the Commission’s power vis-a-vis privately-owned utility companies is not, in fact, “unquestioned”, but is on a par with the question of the Commission’s power vis-a-vis a municipal corporation providing service in a certificated area beyond its own municipal boundaries.

The Commission, understandably, prefers to view our language quoted above as near decisional. The appellee-Water Company, on the other hand, considers it to be obiter dictum.

We must agree with the Water Company; our language in the Akron Borough decision was dictum, perhaps the more easily disavowed because in a footnote.

4 Pursuant to a stipulation between the Commission and the Water Company, service has been supplied by the Water Company to the 17 additional customers pending this litigation without prejudice to the respective positions of the parties herein.

5 The “long form” opinion and order of the Commission were issued pursuant to Rule 23 of the then rules of the Commonwealth Court and took the place of the prior “short form” order of February 13, 1973.

6 The dissenting opinion argues, infra at 342 and 343, that the Commonwealth Court’s decision in the Akron Borough case, 2 *353Pa.Cmwlth. 625, having been later reversed by this Court, is of "questionable relevance.” We disagree, for it is clear that at the time of the imposition of the condition here in dispute, that condition was in direct conflict with the then controlling authority. What is of “questionable relevance” to the issue now before us is the fact that this Court did later happen to vacate the Commonwealth Court’s order.

7 The Commission has relied upon Section 203(a) of the Public Utility Law, 66 P.S. § 1123(a), as authority for its incorporation of the disputed condition. That section authorizes the Commission, in granting a certificate of public convenience, to “impose such conditions as it may deem to be just and reasonable.” The Commonwealth Court’s view is that the Commission and an applicant for a certificate might dispute the exact area to be covered by a certificate and that “on a proper record made” the Commission might preserve the dispute by offering a certificate conditioned upon the applicant’s agreeing to extend its service at some future date to the remainder of the disputed area. 10 Pa.Cmwlth. *354at 544, 311 A.2d 370. There is, of course, a manifest difference between a condition based on the facts in a specific case and a condition the purpose of which is to cause an applicant to subscribe to a bald proposition of the law of agency jurisdiction.

8 In his dissenting opinion Mr. Justice ROBERTS argues that the question of the P.U.C.’s jurisdiction to order extensions is “ripe” for decision and that, if we believe it not “ripe,” we would be compelled to dismiss this appeal.

The question of the authority of the Commission to order extensions is not purely a legal question of statutory interpretation, for it involves also the constitutional objections advanced by the utility. That point aside, however, there is, as the dissent points out, another element to the “ripeness” equation, namely, “hardship to the parties of withholding court consideration.” Abbott Laboratories v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 1515, 18 L.Ed.2d 681 (1967). The dissent suggests that hardship to the P. U.C. results because “continued delay denies it the use of a legislatively sanctioned power to serve and protect the consuming public’s interest.” It cannot be the case that an administrative agency’s uncertainty of its interpretation of various provisions of the regulatory statute which it administers can justify bringing to the courts naked questions of statutory interpretation. We note, moreover, that the Public Utility Commission has not in the past felt unable to order public utilities to extend service beyond their certificated service areas. We are aware of three occasions when it has done so. Hoffman v. City of Erie, 42 Pa.P.U.C. 656 (1966); Kriley v. Butler Water Company, 43 Pa.P.U.C. 586 (1968); and, of course, the Akron Borough case, supra.

Nor do we see hardship to the Water Company arising from our refusal to decide at this time the question of P.U.C. jurisdiction. One of appellant’s principal arguments in this case is that the imposition of the condition was an unlawful exercise of power. It is clear from the record that it was only the P.U.C.’s interest in the substantive question which caused the Water Company fo argue it on the merits, for the question of further “extension of service in the future” is clearly not now involved.

Reliance on Abbott Laboratories, supra, by the dissent is misplaced. In that case compliance with an already-published administrative regulation would have required “changpng] all their labels, advertisements, and promotional materials; destroy[ing] stocks of printed matter; . . . investing] heavily in new printing type and new supplies.” 387 U.S. at 152-53, 87 S.Ct. at 1517.

Finally, dismissal of this appeal would be an inappropriate disposition because, although we regard the jurisdictional question as not “ripe” for decision, there is before us a question in concrete form which requires decision at this time, viz., whether the Public Utility Commission may resolve jurisdictional questions by insertion of conditions in a certificate. It is that issue which is decided in this appeal, a decision which justifies the remand which we direct.

9 We note that in Akron Borough it was the decision of the utility to seek an injunction and prevent the Commission from conducting hearings on a third-party complaint which brought the question of the Commission’s jurisdiction before this Court without a “concrete factual situation.” The Commission objected, properly as we held. Here, it is the Commission which has precipitated this dispute in the absence of an identifiable fact situation. We see no reason why, in a proper case, through a hearing on a third-party complaint or some other appropriate procedure, a record adequate for decision of the tendered issues may not be developed.