               IN THE COMMONWEALTH COURT OF PENNSYLVANIA


UGI Utilities, Inc.,                     :
                       Petitioner        :
                                         :   No. 464 M.D. 2013
             v.                          :
                                         :   Argued: June 17, 2015
City of Lancaster, Charlotte             :
Katzenmoyer, Director of Public          :
Works, City Council for the 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 UGI Utilities, Inc. (UGI)
for partial summary relief seeking 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.                    UGI is a
Pennsylvania corporation and a regulated public utility providing natural gas and
other utility services to residential and business customers throughout eastern and
central Pennsylvania. UGI serves approximately 355,000 customers in a service
territory encompassing portions of 16 Pennsylvania counties. Within the City and its
immediately surrounding suburban area, UGI serves approximately 42,000
customers, including 18,000 customers in the City alone.                     In order to serve its
customers, UGI has developed a network of underground natural gas distribution
mains, service lines, and other facilities. UGI maintains approximately 54 lineal
miles of underground distribution lines within the City’s streets and other public
rights-of-way.
                 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, UGI filed a petition for review in the nature
of a complaint in this Court’s original jurisdiction seeking declaratory and injunctive
relief, naming the City, Charlotte Katzenmoyer, the City’s Director of Public Works,
City Counsel, and the PUC as defendants.2


       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, and an annual assessment
per linear foot of underground facilities located in the City’s rights-of-way.

       2
           The City, Katzenmoyer, and City Council shall be referred to collectively as the City.



                                                   2
                               II. December 17, 2013 Ordinance
                 On December 17, 2013, the City enacted the Ordinance at issue, which
repealed the previously enacted Administrative Ordinance No. 2-20133 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)4 and the Home Rule Charter and Optional Plans Law5 in enacting the
Ordinance.6
                 The Ordinance describes 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.)



       3
           The fee resolution remained in effect.

       4
           Act of June 23, 1931, P.L. 932, as amended, 53 P.S. §§35101-39701.

       5
           53 Pa.C.S. §§2901-2984.

       6
         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
                Section 263B of the Ordinance addresses PUC-regulated utilities and
purports to impose certain duties on public utilities and grant various powers to the
City. For example, section 263B-2 requires each public utility to submit to the City’s
Department of Public Works two paper copies and one electronic copy of a map
depicting and certifying the location of all existing facilities within the City’s rights-
of-way.      (Ordinance at 6, 7.)          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. Additionally,
section 263B-4(9) requires each public utility that has been issued a street opening
permit by the City to submit an updated map or maps. Further, section 263B-5
permits the City to impose an annual maintenance fee “in connection with the
ongoing use and occupancy of City Rights-of-Way.7 (Ordinance at 8.)

      7
          The relevant provisions of the Ordinance state, in full, as follows:

                §263B-2 As-Built Maps

                On or before March 1, 2014, each Public Utility shall submit to the
                Department [of Public Works of the City of Lancaster] two paper
                copies and one electronic copy of as-built map or maps and
                engineering specifications as set forth in the Policies and Procedures
                depicting and certifying the location of all its existing Facilities
                within the Right-of-Way. Such electronic and paper maps and
                engineering specifications shall be submitted in a format and include
                the information required by the City by [sic] in the Policies and
                Procedures. If the maps are not provided electronically in the
                required format, then the Utility shall reimburse the City for the cost
                of converting the paper maps into electronic form or the cost of
                converting electronic maps in another format into the required format.
                Such maps are, and shall remain, confidential documents and are
                exempt from public disclosure under Pennsylvania’s Right to Know
                Law, 65 Pa.C.S. §708; the Public Utility Confidential Security
                Information Disclosure Protection Act, 35 P.S. §§2141.1-2141.3; and
                the Public Utility Commission Regulations relating to Confidential
(Footnote continued on next page…)

                                                    4
(continued…)

           Security Information, 52 Pa. Code §102.1. After submission of the
           as-built maps required under this Section, each Public Utility having
           facilities in the City Rights-of-Way shall update such maps as
           required under this Ordinance.

           §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

                                            ...

           (9) Facilities Maps. Each Utility issued a Street Opening Permit shall
           submit to the City, not later than thirty (30) days after completion of
           the permitted construction (or any party thereof, if required by the
           City), two paper copies and one electronic copy of updated as-built
           map or maps and engineering specifications as set forth in the
           Policies and Procedures depicting and certifying the location of the
           new Facilities constructed or updated. Such documents shall be
           submitted in a format and include the information required by the
           City in its Policies and Procedures. If the maps are not provided
           electronically in the required format, then the Utility shall reimburse
           the City for the cost of converting paper maps into electronic form or
           the cost of converting electronic maps in another format into the
           required format. Such maps are exempt from public disclosure under
(Footnote continued on next page…)

                                             5
                                   III. Amended Petition for Review
              UGI thereafter filed an amended petition for review again seeking
declaratory and injunctive relief. UGI argued 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 location, construction and maintenance of all public utility facilities; violated
UGI’s statutory right under section 1511(e) of the Business Corporation Law of 1988,



(continued…)

              Pennsylvania’s Right to Know Law, 65 Pa.C.S. §708; the Public
              Utility Confidential Security Information Disclosure Protection Act,
              35 P.S. §§2141.1-2141.3; and the Public Utility Commission
              Regulations relating to Confidential Security Information, 52 Pa.
              Code §102.1.

                                               ...

              §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. . . .

(Ordinance at 6-8.)



                                                6
15 Pa.C.S. §1511(e), to use public rights-of-way without charge;8 and imposed
excessive fees, charges, costs, and assessments that will have a material adverse
impact on utility rates and services.                  UGI sought a declaration that the
aforementioned provisions of the Ordinance were preempted by the Code and, hence,
were invalid and unenforceable, and that the imposition of the new maintenance and
sidewalk and street opening fees, as well as the cost of requiring it to submit maps
and drawings, were excessive and unreasonable.
                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 and that UGI failed to plead how the
specific Ordinance provisions interfere with the PUC’s exclusive jurisdiction or are
preempted by the Code. UGI 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 UGI’s amended petition for review.



      8
          Section 1511(e) states that:

                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)
                (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, including the
                placement, maintenance and removal of aerial, surface and subsurface
                public utility facilities thereon or therewith. 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.




                                                   7
               The City later filed an answer denying the material allegations of UGI’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 UGI
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 legitimate method of cost recovery. Both UGI and the PUC
filed answers to this new matter, denying these assertions.


                             IV. Application for Summary Relief
               UGI thereafter filed its application for summary relief which is presently
before this Court.9 UGI alleges that no material facts are in dispute and that its right
to relief is clear. UGI seeks a declaration that sections 263B-2, 263B-3, 263B-4(9),
and 263B-5 of the Ordinance are invalid.


                                            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

       9
           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
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
                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 exclusive authority of the PUC has been extensively discussed in the
companion case of PPL Electric Utilities Corporation v. City of Lancaster, ___ A.3d
___ (Pa. Cmwlth., No. 462 M.D. 2013, filed October 15, 2015), and need not be
recited here.


                             C. City of Lancaster Ordinance
                We begin this section of the opinion by noting that the issues and the
arguments advanced by the parties in this appeal relating to sections 263B-3 and



                                              9
263B-5 of the Ordinance are substantially the same as those set forth and disposed of
by this Court in the companion case of PPL Electric Utilities Corporation. In that
case, we granted, in part, the application for summary relief filed by PPL Electric
Utilities Corporation, concluding that section 263B-3 of the Ordinance is preempted
by the Code, and, hence, is invalid. However, we denied the application for summary
relief with respect to section 263B-5 of the Ordinance, concluding that this section
was not preempted by the Code and noting that 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. We incorporate that opinion by reference and reach
the same conclusions herein.
                We now turn to sections 263B-2 and 263B-4(9) of the Ordinance, both
of which, as discussed above, require a public utility to submit and/or update maps
and engineering specifications depicting and certifying the location of all existing
facilities within the City’s rights-of-way. Section 1501 of the Code imposes certain
obligations on all public utilities regarding the character of its service and facilities,
including that all such “service and facilities shall be in conformity with the
regulations and orders of the [PUC].” 66 Pa.C.S. §1501.10

      10
           Section 1501 states, in full, 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
(Footnote continued on next page…)

                                                       10
             The PUC has promulgated a specific regulation addressing the maps,
plans, and records of a public utility. Section 59.37 of the PUC’s regulations requires
that:

             Each public utility shall keep complete maps, plans, and
             records of its entire distribution and other system showing
             the size, character, and location of each main, district
             regulator, street valve and drip, and each service
             connection, together with such other information as may be
             necessary. The maps, plans, and records required by the
             provisions of this section shall be kept up to date so that the
             utility may promptly and accurately furnish any information
             regarding its facilities, or copies of its maps, upon request
             by the Commission.
52 Pa. Code §59.37.
             Sections 263B-2 and 263B-4(9) of the City’s Ordinance impose
additional requirements on public utilities, mandating that each public utility submit
to the City two paper copies and one electronic copy of a “map or maps and
engineering specifications” depicting and certifying the location of all its existing
and/or updated facilities within the City’s rights-of-way. These sections further
require the public utility to reimburse the City the cost of converting paper maps into


(continued…)

             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.



                                              11
electronic form or the cost of converting electronic maps from one format to another.
In essence, these sections allow the City to become a regulator itself, which
contradicts the intent of our General Assembly in enacting the Code, as set forth in
the long-established case law more fully discussed in the companion case of PPL
Electric Utilities Corporation. See, e.g., Duquesne Light Company v. Upper St. Clair
Township, 105 A.2d 287 (Pa. 1954) (regulation of utilities expressly committed to the
PUC); York Water Company v. York, 95 A. 396, 397 (Pa. 1915) (“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.”); PECO Energy Company v.
Township of Upper Dublin, 922 A.2d 996, 1005 (Pa. Cmwlth. 2007) (“the legislature
intended the Public Utility Code to preempt the field of public utility regulation”).
Thus, we must conclude that sections 263B-2 and 263B-4(9) of the Ordinance are
preempted by the Code, and, hence, are invalid.


                                     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-2, 263B-3, and 263B-4(9) of the City’s



                                          12
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, is not a public utility regulation and, hence, is
neither preempted by the Code nor invalid.
              Because no genuine issues of material fact remain to be decided and
UGI has, in part, established a clear right to relief as a matter of law, we grant UGI’s
application for summary relief and enter judgment in its favor with respect to sections
263B-2, 263B-3, and 263B-4(9) of the Ordinance. Further, the City is specifically
enjoined from enforcing these sections. We deny UGI’s application for summary
relief as to section 263B-5 of the Ordinance. 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.11



                                               ________________________________
                                               PATRICIA A. McCULLOUGH, Judge



Judge McGinley dissents.
Judge Leadbetter joins in part but dissents to maintenance fees (Section 263B-5) and
maps (Section 263B-2 and B-4(9)) only.




       11
          Based upon this determination, we need not address UGI’s alternative arguments relating
to statutory construction and its right to occupy a right-of-way under section 1511(e) of the
Business Corporation Law of 1988, 15 Pa.C.S. §1511(e).



                                               13
             IN THE COMMONWEALTH COURT OF PENNSYLVANIA


UGI Utilities, Inc.,                     :
                       Petitioner        :
                                         :    No. 464 M.D. 2013
             v.                          :
                                         :
City of Lancaster, Charlotte             :
Katzenmoyer, Director of Public          :
Works, City Council for the 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 UGI Utilities, Inc., is granted as to sections 263B-2, 263B-
3, and 263B-4(9) of the December 17, 2013 Ordinance enacted by the City of
Lancaster (City). We hereby declare sections 263B-2, 263B-3, and 263B-4(9) of
the Ordinance to be preempted by the Public Utility Code, and enjoin the City
from enforcing these sections. UGI’s application for summary relief as to section
263B-5 of the Ordinance is denied. Section 263B-5 is not preempted by the Code.



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


UGI Utilities, Inc.,                   :
                       Petitioner      :
                                       :
             v.                        : No. 464 M.D. 2013
                                       : Argued: June 17, 2015
City of Lancaster, Charlotte           :
Katzenmoyer, Director of Public        :
Works, City Council for the 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


             For the reasons set forth in PPL Electric Utilities Corporation v. City of
Lancaster and Pennsylvania Public Utility Commission, (Pa. Cmwlth., No. 462 M.D.
2013, filed October 15, 2015), I respectfully dissent.



                                       ________________________________
                                       DAN PELLEGRINI, President Judge


Judge McGinley joins in this dissenting opinion.
