dissenting.
I respectfully dissent. The imposition of a penalty by the Public Utility Commission (PUC), sua sponte, upon a utility where the complaint gave no notice of the violation upon which the penalty is based and that fines were being sought violates due process.
Margaret Shulzitski, Mr. and Mrs. Raymond Sakrewsky, Edward and Arlene S. Burgess, and Bonita Hoats each filed a separate complaint with the PUC alleging that Honey Brook Water Company (Honey Brook) was providing inadequate water service.1 Each of the complaints requested different forms of relief. Shulzitski requested that the PUC place someone in authority to correct the problems; the Sakrewskys requested that the water lines be checked for leaks; the Burgesses’ requested contact between the PUC and the company to resolve the problem; and Hoats requested the PUC’s aid in obtaining better water service.
Honey Brook was under a 1989 PUC order to drill a well to increase water supply to increase water capacity but had failed to drill the well as required because of financial difficulties. None of the complaints mentioned or sought enforcement of the PUC’s 1989 order or sought imposition of civil *152fines or penalties. The complaints were assigned to an ALJ for hearing.
When it became apparent during the hearings that Honey Brook’s failure to provide adequate service was the result of its non-compliance with the 1989 PUC order, the ALJ, sua sponte, ordered compliance with the 1989 order, imposed a fine of $100 per day during the first week of non-compliance and $200 per day thereafter until the penalty had reached $200,000. The PUC affirmed the ALJ’s decision. Because Honey Brook was never placed on notice in the complaints or any other pleading that the 1989 order was at issue or that fines would be imposed, the ALJ’s order violated Honey Brook’s due process rights because it did not have notice of the allegations made against it.
We addressed a case remarkably similar to this one in Pocono Water Co. v. Public Utility Commission, 158 Pa.Commonwealth Ct. 41, 630 A.2d 971 (1993). In Pocono, a complainant also filed a petition with the PUC alleging inadequate water service. Sua sponte, the ALJ imposed a penalty upon Pocono because it had failed to comply with a prior order to build storage tanks to provide better water service and imposed a penalty. Reversing the PUC’s order and the imposition of a penalty and addressing the due process question, we stated:
Due process in matters before the Commission requires that a party be afforded reasonable notice of the nature of the allegations against it so that the party can prepare a suitable defense. Duquesne Light Co. v. Pennsylvania Public Utility Commission, 96 Pa. Commonwealth Ct. 168, 507 A.2d 433 (1986). Although the Commission may take notice of results it reached in other cases, the record must reflect that the parties had notice that the Commission would consider such evidence. City of Erie v. Pennsylvania Public Utility Commission, 41 Pa. Commonwealth Ct. 194, 398 A.2d 1084 (1979). This court has held that the Commission violated due process rights when it assessed liability by determining an issue which the utility had not been afforded *153a reasonable opportunity to address at an evidentiary hearing. Duquesne Light Co.
Id., 158 Pa.Cmwlth. at 44-45, 630 A.2d at 973.
The holding in Pocono is clear. Before penalties can be imposed for violating a PUC order, a utility must be placed on notice in the complaint that it is being charged with violating a prior order and that penalties are being sought. Due process requires timely and adequate notice of what the agency intends to do and the procedure by which that action is going to be implemented. Memphis Light and Gas v. Craft, 436 U.S. 1, 98 S.Ct. 1554, 56 L.Ed.2d 30 (1978). Due process is not satisfied merely because Honey Brook raised its non-compliance with the 1989 order in its answer. That did not put Honey Brook on notice that it was charged with violating that order and the PUC would seek to impose penalties for such a violation. Because the complainants did not charge Honey Brook with violating the 1989 order nor request that the PUC impose penalties for such, the ALJ could not do so sua sponte.
The view that Pocono does not apply because Honey Brook was not subject to an immediate penalty for violation of a prior order but a conditional penalty for present failures is a distinction without a difference. That position fails to take into consideration that the form and extent of the penalty is irrelevant. Penalties flow from violations. If the violation was not charged, then no penalty can be imposed — for past, present or future violations.
Accordingly, because Honey Brook was never informed in the complaint that it was charged with violating the 1989 order or that fines were sought, I dissent.
FRIEDMAN and KELLEY, JJ., join in this dissent.. The complaints were filed on forms furnished by the PUC.