PUC Creates Private Right of Action Against Act 127 Companies
September 17, 2015
In what appears to be a first for the PUC, the Commission voted last week to allow private parties to sue “pipeline operators” under Pennsylvania’s Act 127 for alleged noncompliance with federal safety standards (Laffey v. Knox Energy Cooperative Associates, Inc.).
The complainant filed a complaint against Knox at the PUC alleging that a private gas line on her property owned by Knox was creating a hazardous condition and asked the Commission to order Knox to bury the line. Knox defended at the hearing stage by pointing out that the Commission does not have jurisdiction over “bona fide cooperative associations,” like Knox, and the ALJ agreed.
At the Commission, the PUC agreed with Knox and the ALJ that it didn’t have jurisdiction over Knox because, as a coop, Knox didn’t satisfy the definition of a “public utility” under Title 66. But, in a motion by Vice Chairman Coleman, the Commission decided that Laffey could nonetheless prosecute a complaint against Knox to determine whether it was violating Act 127. Act 127 generally requires “pipeline operators” as defined in the Act to register with the PUC and to pay assessments on jurisdictional facilities. It also gives the PUC explicit authority to enforce federal pipeline laws against such non-utilities. But that enforcement authority is conferred upon the PUC itself – until now.
Vice Chairman Coleman’s rationale for establishing a private right of action at the PUC for prosecuting violations of Act 127, and, in turn for Federal Pipeline Safety laws, is that federal law grants to individuals a private right to bring enforcement actions for violation of federal pipeline safety laws. But the provision in federal law (48 U.S. C. § 60121) grants an individual a right to bring an action in federal court, subject to certain limitations. Nothing in that section confers similar authority on state commissions charged with enforcing federal pipeline safety laws.
The PUC’s complaint authority is set forth in section 701 of the Public Utility Code, which states that “any person” may complain about “any public utility in violation … of any law which the commission has jurisdiction to administer, or of any regulation or order of the Commission. So, the PUC’s right to create a right to sue for individuals would appear to be limited to actions against “public utilities,” which, as the Commission found, does not include Knox. On the other hand, a strict reading of this section would mean that the Commission doesn’t have authority to authorize complaints against electric generation or natural gas suppliers, that are licensed by the PUC but which are not public utilities. The PUC regularly adjudicates such complaints.
In addition to remanding the case back to the Office of Administrative Law Judge, the Coleman motion also directed the PUC’s Law Bureau to review the matter and to advise whether it would be appropriate to promulgate regulations on the issue of private causes of action under Act 127. If they do, one issue that the PUC lawyers should consider is whether the Commission really has the authority to establish such private rights to sue Act 127 companies in the first place.
If you have any questions, please contact Dan Clearfield at (717) 237-7173 or dclearfield@eckertseamans.com or Sarah Stoner at (717)237-6026 or sstoner@eckertseamans.com.
This Eckert Seamans Energy and Utilities Blog is intended to keep readers current on matters affecting businesses and is not intended to be legal advice.