Pennsylvania’s highest court has ruled that Lancaster city may not assess “maintenance fees” on utility companies regulated by the Public Utility Commission, such as PPL and UGI.
Allowing municipalities to impose such fees would infringe on the commission's authority and could lead to “a crazy quilt of local regulations” rather than “a uniform, statewide regulatory scheme,” the state Supreme Court said in a unanimous opinion this week.
The ruling, on an appeal filed by PPL, invalidates a provision of an ordinance City Council passed in 2013. It was based on cost studies showing that the city incurs more than $500,000 a year in unreimbursed general expenses related to utility poles, wires and pipelines. The maintenance fees were intended to recoup those outlays.
The city has never tried to collect the fees from regulated utilities because it was challenged in court within weeks of its passage.
City officials are reviewing the new ruling and its implications, Mayor Danene Sorace said.
“Obviously, we are disappointed,” she said. Without the fees, the unreimbursed costs fall on city residents: “Our property taxes are subsidizing PUC-regulated utilities.”
PPL, conversely, is pleased, spokeswoman Jess Baker said.
“This ruling will save our customers money,” she said, noting the precedent it sets bars any other municipalities from trying to establish maintenance fees.
A related case involving UGI has been on hold in Commonwealth Court, awaiting the Supreme Court’s decision.
Other components of the 2013 ordinance would have allowed the city to inspect utilities’ infrastructure, order removals and relocations and penalize utilities for noncompliance. The Commonwealth Court ruled against those provisions, but let the maintenance fees stand, leading to PPL’s appeal in 2017.
The Supreme Court said the fees constitute a “utility regulation,” and the lower court erred in not overturning them, too.