PUBLIC SERVICE COMMISSION OF WEST VIRGINIA. CHARLESTON Entered: NOV- 20, 1987

Transcription

1 _- - M.C. CASE NO AC HOWELL SANITATION, INC., a corporation, Cumberland, Maryland. Application for an amendment of certificate. CHARLESTON Entered: NOV- 20, 1987 ADMINISTRATIVE LAW JUDGE'S DECISION PROCEDURE On June 17, 1987, Howell Sanitation, Inc. ('thowell'' or "Applicant"), a corporation, filed an application to amend P.S.C. M.C. Certificate No. F-6565, to authorize operation as a common carrier by motor vehicle in the transportation of trash, rubbish and garbage by container service for business, commercial and industrial establishments within and between points and places in Mineral County to a point of disposal, in lieu of the present operating authority under said certificate which confines such operations to the Frankfort Magisterial District of Mineral County. By order entered that same date, the Commission ordered the Applicant to provide public notice by publication of its application in a newspaper, duly qualified by the Secretary of State, published and of general circu- lation in Mineral County. Notice was thereby given, and written protest was received to the granting of the amended authority applied for therein. Upon receipt of the aforesaid written protests, the Commission by order entered July 6, 1987, set this matter for hearing to be held in the Council Chambers at the City Building, Keyser, West Virginia, on July 17, The hearing was held as scheduled. The Applicant was represented by John Philip Melick, Esq., of Jackson, Kelly, Holt & O'Farrell,

2 Charleston, and W. Stevens Hidey, Esq., of Hidey, Coyle & Getty, Cumberland, Maryland. Protestants Rogers Transfer Company ("Rogers") and United Disposal Service, Inc. ("United") were represented by James D. Kauffelt, Esq., of Kauffelt & Kauffelt, Charleston. Although written protest was also received from Frank Starkey, dba Starkey & Son Disposal ("Starkeyl'), Starkey did not formally appear or participate during the hearing. At the outset of the hearing, Protestants Rogers and United moved to dismiss the application on the ground that Howell's present authority was void due to a failure to formally commence operations as required by the Commission's order entered March 31, 1987, in M.C. Case No TC. However, the Commission by order entered June 25, 1987, in M.C. Case No TC extended through July 24, 1987, the time in which Howell could commence operations, and the Commission's files confirm that Howell has filed the proper certificates of insurance and formally commenced operations within the deadline as extended by the Commission. In addition, any challenge to the Commission's order of June 25, 1987, is not appropriately before the Administrative Law Judge in this proceeding. (Tr., pp. 7-10). The Applicant presented four public witnesses, Mr. Phil Grogan of Keyser Garment Company, Mr. Thomas Ray Hann of Martin's Food Stores, Mr. A. P. Boxley, 111, an owner/operator of several McDonald's restaurants, and Mr. Norman Lee Moore, a sanitarian with the Mineral County Health Department, as well as Mr. Charles E. Howell, Jr., the President and Chief Executive Officer of the Applicant and of Howell Trucking, Inc. ("HTT."), the Applicant's sole shareholder. The Protestants presented three witnesses, Mr. John I. Rogers, 11, the Vice-president of Rogers, and Messrs. I = -2-

3 William V. Hood, Jr., and Stewart G. Thayer, Jr., the Vice-PresLdent/General Manager and President of United. Neither Protestant presented public witnesses. At the conclusion of the taking of evidence, the parties were directed to file recommended decisions 30 days after delivery of the transcript, with reply briefs to follow in an additional ten days. By subsequent agreement of the parties, the deadline for reply briefs was extended to September 18, The Administrative Law Judge has reviewed all of the recommended decisions and briefs which were submitted. Applicant's Evidence DISCUSSION OF THE EVIDENCE INCLUDING FINDINGS OF FACT Phil Grogan is the President and General Manager of Keyser Garment Company ("Company"). (Tr., pp ). Mr. Grogan has been employed by the Company for thirty (30) years, and his current responsibilities include the overall operations of the Company's plants in Keyser, West Virginia, and Cumberland, Maryland. (Tr., p. 11). The Company manufac- tures various types of wearing apparel and employs 160 people in Keyser. The garment industry is very competitive, and, as costs increase, the Company can only look for ways to cut its other costs because it is competitively constrained from increasing its prices. (Tr., pp ). Both the Keyser and Cumberland facilities generate a substantial amount of solid waste in the form of piece goods, paper, and boxes. (Tr., p. 13). The Company's Keyser facility is currently served by United with four dumpsters kept at the back of the building. (Tr., p. 13; Appl. Exs. 1, 2 and 3). The Company's plant in Cumberland, Maryland, is served by dumpsters owned and serviced by HTI. (Tr., pp ). Mr. Grogan is

4 pleased with the service he receives from HTI in Cumberland, Maryland, due to HTI's timely pickups, good maintenance of containers, and substantially lower rates. Mr. Grogan is dissatisfied with the service he receives from United for several reasons. First, because the dumpsters contain no lids, wind blows the debris out onto neighboring lawns which necessitates the dispatch of a Company employee, thereby raising the Company's costs. (Tr., pp ). Moreover, those with partial lids have sharp edges, and he is concerned that children who sometimes play around the Keyser plant may hurt themselves. (Tr., pp ). Second, it is important that both plants be served on a timely basis because waste matter soon builds up inside the plant, slowing down production, but United has twice failed to make scheduled pickups at the Keyser plant. (Tr., pp ). Third, Mr. Grogan is dissatisfied with United's rates and billing practices. When United recently increased its rates by approximately 220%, the Company was not given notice of the rate change. Services are also billed in advance. (Tr., pp ). Finally, Mr. Grogan has been unable to contact United during normal business hours because United has installed an answering machine instead of staffing the office. (Tr., p. 18). When Mr. Grogan was advised by the Commission Staff that United's rate change without notice and prospective billing were not allowed, he called Rogers and Starkey but: was told that they were not taking any new business because they were attempting to sell their certificates to United. (Tr., pp ). When he had no apparent alternative to United in Keyser, Mr. Grogan called Mr. Howell and asked him if he could pick up the Company's waste. Mr. Howell told Mr. Grogan that neither Howell nor HTI had authority to serve Keyser. (Tr., p. 19). -4-

5 I. Mr. Grogan concluded his direct examination by stating that he was testifying in support of Howell's application. Howell and HTI have good service and good equipment, as well as cheaper rates. United has not proven to Mr. Grogan that they can do anything yet at this point. (Tr., p. 21). Mr. Grogan was then cross-examined. The Company has been a United customer since May 1, 1987, and previously received service from Waste Management, located in Ridgeley. Prior to Waste Management, the Company was served by Mr. Haywood. Some of the dumpsters had lids when they were previously owned by Waste Management or Mr. Haywood, and Mr. Grogan believes that they have since been "busted up" when being emptied. Mr. Grogan also contacted Waste Management to complain about the lack of lids last year without much success. (Tr., pp ). Fifteen years ago, the Company was served by Rogers, but has used United and its predecessors since moving to the new plant where the Company began to use containerized service. (Tr., p. 24). The Cumberland plant has 22 employees and generates less waste than the plant in Keyser. The plant in Cumberland has one or two dumpsters and has been operating two months. (Tr., p. 25). United's rates are volumetric and also affected by the number of pickups per month. (Tr., p. 26). If cardboard boxes were broken down, they would not fill up the dumpsters as fast. (Tr., p. 26). Mr. Grogan's main concern with United's service is the price. (Tr., p. 27). Mr. Grogan has attempted to appeal the rate charged by United to the Commis- sion, but has not been satisfied with the results. (Tr., pp ). The level of service to the Keyser plant over the last few years has been about the same. TTr., pp ). Mr. Grogan was unable to negotiate a r -3-

6 lower rate with United, so he agreed to take a lower level of service. (Tr., pp ). The Company now has to have someone stomp on the trash to get more in the dumpsters. (Tr., p. 32). Mr. Grogan's first bill from United was at the same rate, but was payable in advance. His second bill from United was based on the new rates, which were increased without any notice. (Tr., pp ). Thomas Hann resides in La Vale, Maryland, and is the Store Manager of the Martin's Food Store in Keyser. (Tr., pp ). Mr. Hann has primary responsibility for the entire Martin's operation in Keyser and has been in the food and grocery business since He has managed other grocery stores in Gettysburg, Pennsylvania, and has also been in management capacities in Chambersburg and Hagerstown. (Tr., p. 35). Grocery stores have particular waste disposal needs because they generate a great deal of produce and meat waste and, consequently, must be frequently serviced. Before coming to Keyser, Mr. Hann had dealt only with an enclosed container compaction unit that is inaccessible from the outside. (Tr., pp ; Appl. Ex. 4). Food waste is a particular concern at a grocery store, because produce and meat items rot, create juices, and result in odors which draw flies and cause bacterial growth. Grocery stores are also subject to the public health laws. (Tr., p. 38). Presently, the Martin's Food Store in Keyser is served with several open containers. This allows people to access the waste and scavenge for food, which happened as recently as the evening before Mr. Hann testified. (Tr., pp ). Mr. Hann's store is now served by United with one open dumpster and three small containers with flip lids that are accessible to anyone. He is displeased with this service. (Tr., pp ; Appl. Exs. 5, 6, 7, and -6-

7 8). Although one of the containers is a roll-off type, United lacks a corresponding vehicle, and United employees must climb into the dumpster to pick up and throw the waste into another vehicle. (Tr., p. 40). The present containers also fill up and overflow quickly, a situation which can be partially rectified only by having store employees break down cardboard so that more can be put into the containers. Although Martin's management has expressed their concerns to United, United's response has been that they cannot provide the type of service which Martin's needs, an enclosed container/compactor type that does not permit access from the outside. (Tr., p. 41). No carriers presently certificated in Keyser can provide roll-off service in conjunction with a customer-owned compaction unit. (Tr., p. 42). In addition to these public health concerns, Mr. Hann is also dissatisfied with United service because of the visual appearance presented by the rear of the store as persons cross the river into Keyser. (Tr., pp ). Mr. Hann used Applicant's Exhibits 7 and 8 to point out the leakage problem presented by the United containers which attract flies and bacte- ria. (Tr., p. 44). Although store employees have in the past used Clorox in an attempt to contain bacterial growth and keep the smell down, Mr. Hann is concerned that people who are able to access the open dumpsters will be harmed by the bleach either by coming in contact with it or ingesting the bleach-contaminated food waste. (Tr., p. 44). Although Mr. Hann's store requires weekend service, he is unable to get weekend service from United unless special arrangements are made on Saturday. (Tr., p. 45). -7-

8 -8- '"1111" R Mr. Hann has determined that Howell and HTI can provide enclosed container service of the type he desires, and he testified at the hearing to support Howell's application. (Tr., p. 46). Mr. Hann was then cross-examined, Mr. Hann is not certain whether his store is served on Saturdays. (Tr., p. 47). However, he reiterated that what he wants is enclosed container service, not necessarily daily pickups. (Tr., p. 47). To Mr. Hann's knowledge, practically every food service establishment requires and uses enclosed container service. (Tr., p. 48). Mr. Howell did not tell Mr. Hann that Howell would give him closed container service, but only that it would be available from him if Howell obtained authority. (Tr., p. 49). Martin's has purchased its own compactor but has not been able to install and use it due to the absence of certificated carriers with the corresponding equipment. (Tr., pp ). Mr. Hann has explained to United the total inadequacy of United's equipment. (Tr., p. 50). Although Mr. Hann has not spoken directly with United officials about the particular leakage and other sanitation concerns, other Martin's officials have done so. Mr. Hann has directed his concerns to Mr. Dan Strickler in Martin's Construction and Maintenance Department, who reported back to Mr. Hann that roll-off service was unavailable from United. (Tr., pp ). Mr. Hann has also discussed the problem with his District Manager, Mr. Martin, who also contacted United. (Tr., p. 53). Mr. Hann disagreed that United should have a full month's experience before it can determine how much service his store needs. Mr. Hann knew his needs from day one, and he believes it is the customer, not the.carrier, who determines what the customer's needs are. (Tr., pp ).

9 e Mr. Hann reiterated that Martin's has purchased its own compactor which it wishes to install, but is unable to use due to the absence of complementary service. (Tr., p. 54). United was unable to provide the roll-off service which Martin's requires. (Tr., pp ). Mr. Hann became aware of the hearing through his District Manager, Mr. Martin. (Tr., p. 56). Mr. Hann has reason to believe that Howell will provide the store with enclosed container service, because, at this point, he cannot purchase it from anyone else. (Tr., pp ). On redirect examination, Mr. Hann identified Applicant's Exhibit No. 9, a reply to a telephone call between Dan Strickler and Mr. Howell. Mr. Hann also identified Mr. Grubb's signature on the second sheet of Applicant's Exhibit No. 9, in which Mr. Grubb indicated that presently certificated carriers were unable to handle "our size container." (Tr., p. 59; Appl. Ex. 9). Martin's needs are not presently met by the certificated carriers in Keyser. (Tr., p. 60). A. P. Boxley, 111, resides in La Vale, Maryland, and is a McDonald's licensee with stores in Keyser and in Frostburg and La Vale, Maryland. (Tr., pp ). All three locations generate a large quantity of paper and food waste. (Tr., pp ). The Frostburg and La Vale stores are currently served by HTI. The Frostburg store is served with an eight-yard container that is dumped six days a week, while at the La Vale store HTI uses a six-yard compactor that is dumped four times per week. (Tr., pp. 65, 76; Appl. Ex. No. 12). Mr. Boxley is very pleased with the HTI service he receives in Maryland. (Tr., p. 65). The waste generated at McDonald's stores is highly compactible, and compaction units provide better service and cleaner grounds. (Tr., p. 66). The HTI trucks are regularly dispatched and if -9- R

10 Mr. Boxley encounters any problem he can easily reach the main office and talk to either Mr. Howell or other HTI employees. (Tr., pp ). HTI serves Mr. Boxley's two Maryland stores in about five minutes each, an important consideration because a large trash truck ties up parking, and quick service means more business for Mr. Boxley and better customer satisfaction. (Tr., p. 67). Mr. Boxley's Keyser store is served by United with four containers. (Tr., pp ; Appl. Exs. 10 and 11). Mr. Boxley used Applicant's Exhibits 10 and 11 to point out the inadequate service United provides in Keyser, which is only three days per week and is not enough to handle the store's needs. The Keyser store's heaviest volumes occur on the weekend but United does not provide service on Saturday or Sunday. This contrasts with the service received in Maryland from HTI, which empties the container on Saturday evening and Monday morning. (Tr., p. 68). Mr. Hood informed Mr. Boxley that weekend service was not available from United. (Tr., pp ). Mr. Boxley is also dissatisfied with the type of containers used by United. Because the containers are noncompaction, it is very difficult to keep the area sanitized. Mr. Hood informed Mr. Boxley that United is unable to provide compactor service, but even if United had the proper vehicles, Mr. Boxley would have to buy the compactor unit himself. Mr. Boxley does not want to purchase a compactor unit. (Tr., p. 69). United's service to Mr. Boxley in Keyser also presents a substantial spillage and odor problem, which in the past month has attracted rats. (Tr., p. 70). Because of United's equipment and mode of service, the trash area and adjacent parking lot in Keyser must be sanitized on a daily basis. In addition to the odor problem around the trash containers D -10-

11 themselves, the truck leaks hydraulic oil and food waste on the parking lot which results in large spots that must be scrubbed, cleaned, and sanitized. (Tr., pp ). This problem does not occur at the two Maryland facilities served by HTI. (Tr., p. 71). Mr. Boxley has been talking to Mr. Howell for five years about serving his store in Keyser. Mr. Boxley fully supports the Howell application and hopes that he and other Mineral County residents have more than one choice, because he believes that if there is some competition in the area, problems will be eliminated. (Tr., pp ). Mr. Boxley also observed that if the pending application to transfer the Rogers and Starkey certificates to United is successful, there will be only one provider of containerized trash service in Keyser unless the Howell application is granted. (Tr., p. 72). Mr. Boxley believes that Howell services will be a real asset to Mineral County. Mr. Boxley was then cross-examined. He became aware of the hearing through his attempted protest and inquiries related to a substantial United rate increase in late May. Mr. Boxley was not given notice of the rate increase, and he has contacted numerous governmental and civic officials in an attempt to generate support for additional competition in the Mineral County area. (Tr., pp ). Mr. Boxley first contacted United when he received the increased bill and was told by a United employee that he would just get a "big run-around" from Mr. Hood. (Tr., pp ). Mr. Boxley's trash service has been inadequate ever since he has been in Keyser beginning in June, 1981, and United has shown no improvement in the level of service. (Tr., pp ). Mr. Boxley also talked to Mr. Rogers, who was unable, like United, to provide the compaction service. -1 1

12 (Tr., p. 77). Although Mr. Boxley attempted at one time to alleviate his problems with an additional dumpster, it became even more difficult to move the dumpsters around to keep the area clean, and the extra dumpster had to be removed. (Tr., p. 77). Mr. Boxley pays an extra charge of about $ per month to HTI for a compactor at the Maryland stores. (Tr., p. 78). Mr. Boxley's rate paid to United has been reduced somewhat from the initial increase. (Tr., p. 21). Although Mr. Boxley's stores are served at a much lower rate in Maryland, his main concern in Keyser is the unavailability of compaction service. Six-day service is an alternative to compaction service, but Mr. Hood told Mr. Boxley that Saturday service was unavailable from United. (Tr., p. 82). Although United was willing to provide Mr. Boxley with four-day service, the fourth day would mean a substantial increase in rates. Mr. Boxley believes that United controls the market and that he is at United's mercy. (Tr., p. 83). Compaction service is the most desirable service for Mr. Boxley, and that service is unavailable from the existing carriers. (Tr., p. 84). Mr. Boxley has determined that Howell can provide compaction service now. (Tr., pp ). Mr. Boxley has been unable to discuss compaction rates with Mr. Hood because of the service's unavailability from United. (Tr., p. 85). Mr. Boxley is somewhat familiar with the Commission's General Order No. 57. (Tr., pp ). Norman Moore is a sanitarian with the Mineral County Health Department ("Department'') and has held his present position for approximately 14 years. The Department has primary responsibility for sewage and water systems, general regulations governing food service establishments, day care centers, nursing homes, and anything affecting the public health -12-

13 within Mineral County. (Tr., pp ). Mr. Moore's concern is not with waste disposal as such, but with the health and sanitation ramifications of the storage and disposal of garbage. (Tr., p. 88). This is jurisdictionally confined to restaurants, grocery stores, schools, and other public establishments. (Tr., p. 88). The Department has had problems over the years with the storage of waste in the Keyser area. Mr. Moore believes there is a widespread lack of maintenance, inadequate cleaning, absence of lids, leaking, and rust in containers. These problems are amplified by leaking trucks with faulty gaskets and other problems. (Tr., p. 89). Mr. Moore reviewed a copy of Applicant's Exhibit No. 5, and stated that the absence of lids and overfilled conditions constituted several violations of the Department's food service and retail market sanitation regulations. (Tr., p. 90). Mr. Moore attributes the problems in Keyser to both customer apathy and an inability of present carriers to provide suitable service. (Tr., pp ). Mr. Moore also identified Applicant's Exhibit No. 13 as a photograph of the Mineral County Vo-Technical Center, and stated that the broken lid meant that it was neither insect nor rodent proof. (Tr., pp ). Mr. Moore's primary responsibility is the southern end of Mineral County, including portions of Keyser. The problems observed by Mr. Moore are not confined to Keyser but prevail throughout Mineral County. (Tr., pp ). Mr. Moore was then cross-examined. The problems in Mineral County have increased since the containerized "green box" systems began to deteriorate and were not satisfactorily maintained or replaced. (Tr., p. 94). Mr. Moore also pointed out several violations of his Department's regulations evident in Applicant's Exhibit Nos. 10 and 11, photographs of -13-

14 the Keyser McDonald's owned by Mr. Boxley. Accordingly, Mr. Boxley's store has been cited for violations in the past. (Tr., pp ). Because it is the food service establishment, not the carrier, who is cited, that establishment must take up the problems with the carrier who provides service. (Tr., p. 97). Mr. Moore believes that United has been providing service since approximately May 1, 1987, and he once discussed his concerns about United service with Mr. Hood behind the Keyser IGA. Mr. Hood told Mr. Moore that United planned to recondition its containers. (Tr., pp ). (Tr., pp ). Mr. Moore does not pay particular attention to what carrier's container is located at a particular establishment. (Tr., p. 101). Mr. Moore did not testify to "favor" one side over another, but simply to answer questions about things he has observed within his area of responsibility. (Tr., pp ). Mr. Moore became aware of the hearing from Mr. Strickler of Martin's Food Stores who called him to complain about the problems experienced by Martin's Food Store in Keyser and ask or information about what the Department's regulations require. Mr. Moore informed Mr. Strickler that the containers used by United to serve the store were inadequate. (Tr., pp ). Charles E. Howell, Jr., is President and Chief Executive Officer of Howell and HTI. Mr. Howell is also the 100 percent shareholder of HTI. (Tr., pp ). HTI presently serves the Frankfort District of Mineral County with containerized trash removal service for business, industrial, and commercial customers. Howell operates its fleet in conjunction with HTI in Cumberland, Maryland. (Tr., pp ). HTI provides similar services in Maryland, an unregulated state, and competes

15 against 12 or 13 other carriers, including United and Rogers. (Tr., pp ). The books of Howell and HTI are kept on a distinct basis. Howell was established as a separate West Virginia corporation in order to facilitate compliance with West Virginia workers' compensation, tax, and other laws. (Tr., p. 114). Time and mileage for vehicles and other equipment used in West Virginia are kept on a specific basis, and the Commission Staff could calculate a cost based rate for Howell in West Virginia if the need arose. (Tr., pp ). Howell and HTI operate 17 vehicles, including four front-end loaders, four roll-off vehicles, four residential rear-end loaders, as well as two service vehicles and three pickup trucks. The average age of the fleet is less than four years, and the oldest active vehicle was built in (Tr., p. 116). Howell employees maintain the vehicles, which are all insured as evidenced by the certificates of insurance filed with the Commission. (Tr., p. 117). The vehicles that operate in West Virginia are properly tagged and operate with the required cab cards. (Tr., p. 117). Howell and HTI employ 23 people. (Tr., p. 117). Howell's containers are also maintained and refurbished by Howell employees, who are members of the Teamsters in Cumberland, Maryland. Howell and HTI experience an extremely low rate of employee turnover. (Tr., p. 118). HTI has approximately 750 business, industrial, and commercial customers in Maryland, while Howell has 23 such customers in the Frankfort Magisterial District in Mineral County. (Tr., pp ). Mr. Howell then used a series of photographs (Appl. Exs. 16, 17, 18 and 19) to explain how the fleet is operated and containers are maintained and sanitized. (Tr., pp ). Howell and HTI provide compaction -15-

16 service, both through their own containers and containers that complement compaction units owned by customers. (Tr., pp ). Both companies keep their equipment, including containers, in good operating condition and in compliance with state and local health and other regulations. (Tr., pp ). Howell began operating in the Frankfort District of Mineral County on April 1, 1987, when it purchased Certificate No. F-6565 from A ti M Disposal of Ridgeley, West Virginia. A ti M's containers were in unsatisfactory condition and were all replaced at the date of sale. (Tr., p. 124). Howell and HTI use several methods of sanitizing containers and incur substantial expenses in doing so. (Tr., pp ). Neither Howell or HTI have been cited for the violation of any health regulations in either Maryland or West Virginia. Mr. Howell is generally familiar with the Commission's Rules and the other regulations that apply to Howell in West Virginia, including the Commission's General Order No. 57. Howell has never been the subject of a complaint or a rate appeal to the Commission. (Tr., p. 126). Mr. Howell took all of the photographs offered as exhibits by the Applicant with the exception of Applicant's Exhibit No. 13, which was taken by Mr. Joe Perkins at Mr. Howell's direction. (Tr., pp ). Mr. Howell then testified about the financial condition of the two companies. All vehicles are company owned, and Howell is well capitalized. HTI stands fully behind Howell in its commitment to West Virginia, and the two corporations have the financial capability to meet the needs throughout Mineral County. (Tr., p. 132). Howell is prepared to purchase whatever additional equipment is necessary to meet those needs. (Tr., p. 133). -16-

17 Mr. Howell has been in the trucking industry all of his life, and started in the waste hauling business in He belongs to the national and Maryland Solid Waste Associations, and is in the process of joining the West Virginia Solid Waste Association. (Tr., p. 133). Howell wishes to serve all of Mineral County to meet the needs of the people. (Tr., pp ). Mr. Howell was then cross-examined. HTI has been the largest competitor in the Cumberland area for about ten years. Howell presently owns no equipment, but leases equipment from HTI. (Tr., pp ). Similarly, Howell itself has no employees, but uses employees of HTI. (Tr., p. 135). There was not a written lease between Howell and HTI when Mr. Howell testified. (Tr., p. 136). On the advice of the Commission's Motor Carrier Division the vehicles used in West Virginia do not carry common carrier plates due to a reciprocity agreement involving Maryland and West Virginia. However, vehicles used by Howell in West Virginia do carry West Virginia stickers and cab cards, and all assessments and taxes have been paid. Those vehicles are properly registered in West Virginia and Howell pays road fuel and motor fuel tax on those vehicles. (Tr., pp ). Future equipment purchases will be by Howell itself. (Tr., p. 137). Howell has no physical location in West Virginia, but operates with HTI out of the HTI facilities in Cumberland, Maryland. Although Howell is confining its operation to containerized service, it is not confining its service to high volume customers. (Tr., p. 138). Howell's rates are set by the size of the dumpster and the number of pickups per week, as modified through negotiation to accommodate different cost considerations for each customer. (Tr., pp. 138, 139). Howell presently serves apartment -17-

18 houses in West Virginia because those customers were served by A & M. (Tr., p. 139). Howell and HTI sanitize their containers primarily during the warm months of the year, although different types of waste dictate different sanitation schedules. (Tr., pp ). Howell did not change the rates that were in force when it acquired its certificate in the Frankfort Magisterial District. (Tr., p. 140). HTI for approximately four years has hauled scrap metal from the Penn Ventilator Plant in Keyser to a salvage yard in Cumberland, Maryland. That service was provided upon the agreement of Rogers and Haywood, who were unable to provide the service required by the customer. Mr. Howell contacted the Commission as soon as United became certificated in Mineral County and was told by a member of the Commission Staff that the interstate hauling of scrap metal was not subject to Commission regulation. (Tr., pp ). Mr. Howell discussed with Mr. Rogers the purchase of the Roger's certificate in early 1986, but negotiations went no farther. (Tr., pp ). Howell has made no arrangements to serve its public witnesses in this proceeding. (Tr., p. 146). Howell does not want all the commercial business, but is willing and able to serve all of those who want service in the rest of Mineral County. Mr. Howell has no way of knowing how much of the business Howell will receive if the application is granted, but he thinks that perhaps in a two-year period he might have 50% of the business. (Tr., p. 147).. -Howell's and HTI's charges reflect the disposal costs they incur at landfills. Those charges may triple in the near future, but that increase I' -18

19 will have an equal impact on all carriers in the area. (Tr., pp ). Mr. Howell anticipates that Howell will have its own employees in the near future, but he is unsure if they will be members of the same collective bargaining unit as the employees of HTI. (Tr., pp ). On redirect examination, Mr. Howell emphasized that he has only been operating in West Virginia since April 1, 1987, and that he is still attempting to determine all of the specific regulatory requirements in West Virginia. (Tr., pp ). Howell will abide by all Commission regulations, and the Applicant has retained local West Virginia counsel to ensure that Howell complies with West Virginia law. (Tr., p. 151). Mr. Howell has never been advised that any of the current operations of either Howell or HTI are contrary to West Virginia law or the Commission's Rules, and he has discussed these matters with the Commission Staff on a regular basis. (Tr., pp ). On recross examination, Mr. Howell explained that Howell filed certificates of insurance on March 17, 1987, but that there was some confusion and delay in having those certificates filed in the appropriate form, thereby necessitating an extension in which Howell could formally commence operations. (Tr., pp ). Howell has operated continuous- ly from April 1, 1987, because A & M went out of business on that date and, if Howell had not commenced operations, the residents of Frankfort would have been without containerized trash service. (Tr., pp ). Protestants' Evidence John I. Rogers, 11, is Vice President of Protestant Rogers, which holds authority from the Commission to provide commercial and industrial -19-

20 trash pickup service in Mineral County. Although Rogers has pending an application to transfer that authority to United, if that transfer is denied, Mr. Rogers believes that a grant of the authority requested by Howell would adversely affect Rogers' ability to operate and serve the public in Mineral County. (Tr., p. 157). Mr. Rogers' belief is based on the fact that the number of trash haulers has declined to less than half of what it was 20 years ago. Mr. Rogers characterized competition as keen, and said the economics are not very good right now for trash service in Mineral County. (Tr., pp ). Mr. Rogers also believes that a grant of the requested authority would adversely affect Rogers' ability to serve residential customers, even though Rogers has only 135 commercial accounts compared to 2,300 residential accounts. (Tr., p. 159). On cross-examination, Mr. Rogers admitted that he conducted no economic study as to the impact of Howell's requested authority and that his was not a surprising reaction for someone who is potentially going to compete with Howell. (Tr., p. 160). Mr. Rogers also admitted that there was much less competition in Mineral County than there was 20 years ago and that if Rogers' pending application to sell its authority to United is approved, United will be the only certificated commercial trash hauler left in Keyser. (Tr., pp ). Approximately half of Rogers' commercial accounts are by hand pickup, and Mr. Rogers does not know what percentage of Rogers' revenues are confined to containerized commercial, business and industrial customers. (Tr., pp ). Mr. Rogers also acknowledged that Rogers has been able to survive competition in Maryland despite the absence of any legal barriers as to the number of entrants. (Tr., pp ). Rogers' vehicles operate,in' Maryland without Maryland tags, and they use the -20-

21 Allegheny County, Maryland, landfill for waste collected both in West Virginia and Maryland. (Tr., p. 164). William V. Hood, Jr., is Vice President and General Manager of United. (Tr., p. 165). United has provided commercial trash hauling service in the Keyser area since May 1, 1987, under authority and with equipment acquired from Waste Management. (Tr., pp ). Mr. Hood stated that the condition of the containers acquired from Waste Management was less than desirable, and United has since purchased sleeves to convert those containers to front-load containers. United is also committed to replacing the lids on its Containers. (Tr., pp Mr. Hood believes that United can more efficiently serve the needs of Mineral County with front-load trucks and containers. (Tr., p. 168; Prot. Ex. 1). United recently acquired a 1979 Mack packer unit, but that unit has not been placed into service yet due to the recent change in title. (Tr., p. 169). United will begin its container conversion program in the areas where the need is greatest. (Tr., p. 170). United recently spent $34,000 for a 1979 Mack acquired specifically for the commercial part of United's business in Mineral County. (Tr., p. 171). Mr. Hood has spoken with Nr. Grogan on two or three occasions about service to the Company, including one meeting in which Mr. Hood and Mr. Grogan called Mr. Hatfield of the Commission Staff from Mr. Grogan's office. (Tr., pp ). Mr. Grogan was told at that time that United would continue to serve the Company during any dispute over the rate. (Tr., p. 173). According to Mr. Hood, Mr. Grogan had never raised with him his concern about the condition of the dumpsters used by United to serve the Company. (Tr., p. 173). Mr. Hood has also spoken with Mr. McCrary of che Commission Staff about the rate charged to the Company.

22 (Tr., pp ). Mr. Hood has discussed with Mr. Grogan the possibil- ity of Company employees breaking down cardboard boxes to reduce the Company's needs to two-day-a-week service, and the Company is currently being charged the old rate pending resolution of the rate dispute. (Tr., p. 175). Mr. Hood also discussed with Mr. Grogan how expenses could be cut by having Company employees smash waste down into the containers. (Tr., p. 175). Mr. Hood stated that Mr. Grogan never raised the issue of container lids with him, and in any event, United plans to recondition those particular dumpsters. (Tr., p. 176). Mr. Hood also gave his version of United's discussions with Martin's. Mr. Hood has never met Mr. Hann, but has had numerous conversations with several different people with Martin's. (Tr., p. 177). The first person, named Florence, told Mr. Hood that Martin's wanted service to its own compaction unit. Mr. Hood told Florence that such service was unavail- able. (Tr., p. 178). Mr. Hood next talked to Mr. George Grubb, and told Mr. Grubb that United did not have the containers that could be used with Martin's compaction unit. (Tr., pp ). Mr. Hood also spoke with Mr. Ed DeShell, the grocery manager at the Martin's store in Keyser, who was unable to tell him exactly what quantity of waste the store would generate. (Tr., p. 181). Mr. Hood also spoke with Mr. Martin about the store's requirements and the present inability of United to supply a roll-off container that would complement Martin's compaction unit. (Tr., pp ). Finally, Mr. Hood stated that he had not received any complaints from Martin's about public access to the current containers, and emphasized that those containers are emptied six days a week, includ- ing Saturdays. (Tr., pp ). United has investigated the possible -22-

23 lease or purchase of suitable containers for a customer owned compaction unit. (Tr., pp ). Mr. Hood next testified about his communications with Mr. Boxley. Mr. Hood's first conversation with Mr. Boxley concerned the United rate increase, at which time Mr. Hood agreed to lower the rate from $400 to $316, although Mr. Boxley continued to feel that United's rates were out of line and that he would have to appeal the rate to the Commission. (Tr., pp ). At that time, Mr. Boxley made no complaint about United's service. Mr. Hood has rejected a written contract prepared by Mr. Boxley, and Mr. Boxley and Mr. Hood have also discussed Mr. Boxley's desire for a self-contained compaction container and United's present inability to provide such a container. (Tr., pp ). Mr. Hood also recounted his conversations with Mr. Moore about the Department's concerns with United's service to food service and other establishments regulated by the Department. (Tr., pp ). United has recently purchased several pieces of equipment, and Mr. Hood hopes to refurbish all of United's containers within six months. (Tr., pp ). If United were to lose 50% of its commercial container business, Mr. Hood believes that United would have difficulty meeting its financial commitments on this equipment, although he deferred to Mr. Thayer on the particular financial impact. (Tr., p. 198). United employs 11 people in Mineral County and buys all of its fuel in Keyser. It also has its vehicles repaired and maintained in West Virginia. (Tr., pp ). On cross-examination, Mr. Hood acknowledged that United cannot presently provide compaction service. (Tr., p. 201). Mr. Hood was unaware of the notice requirements contained in the Commission's General -23- U

24 Order No. 57, although United has operated in West Virginia for over a year. (Tr., p. 202). Mr. Hood also acknowledged that an answering machine is sometimes used at United's offices during normal business hours. (Tr., p. 203). Mr. Hood was somewhat unsure about rate increases in Maryland since United began operating in May of this year, but he acknowledged that most West Virginia rates were raised for business and industrial customers. (Tr., p. 204). Er. Hood identified Applicant's Exhibit No. 20 as the form contract United provides to its prospective customers. (Tr., p. 205). Mr. Hood did not ask anyone with Martin's to testify as a public witness on behalf of United, and he acknowledged that the present service to Martin's is an unacceptable situation. (Tr., pp ). Mr. Hood also admitted that the situation at the Martin's store has not changed, and he acknowledged that United had not replaced or reconditioned any of its dumpsters in the area since beginning service in early May. (Tr., pp ). Mr. Hood agreed that if the pending application of Rogers to transfer its certificate to United is successful, and Howell's application is denied, United will be the only common carrier of solid waste for commercial, industrial and business customers by container service in Mineral County. (Tr., pp ). Stuart G. Thayer, Jr., is the President of United. Mr. Thayer testified briefly about his contacts with Martin's and his perception of Martin's needs. (Tr., pp ). Mr. Thayer and his wife are personal guarantors of the loans United has received from area banks. (Tr., p. 220). If United was to lose 50% of its commercial container business, Mr. Thayer believes it would adversely affect United's ability to function and m -24-

25 to meet its debt obligations. (Tr., pp ). Mr. Thayer maintained that this impact would also occur even if United's pending application to acquire the Rogers and Starkey certificates is approved, although he could not quantify that impact. (Tr., pp ). Mr. Thayer was then cross-examined. Mr. Thayer has no experience managing a grocery store, but he believes that Martin's management may not have an accurate idea of their own needs. (Tr., pp ). Mr. Thayer acknowledged that United is presently unable to provide the roll-off service that would allow Martin's to install the compactor that it has already purchased. (Tr., pp ). United has not performed any study to support Mr. Thayer's testimony about the impact of Howell's application in this proceeding, and he was relying solely on Mr. Howell's speculations in making his assessment. (Tr., pp ). Mr. Thayer was somewhat vague as to whether United's residential business subsidizes its commercial services, although he admitted that the two services are provided with different equipment. (Tr., pp ). Only the commer- cial customers served under United's Hampshire County certificate are served with the rear-load vehicle that is also used to serve residential customers. (Tr., pp ). DISCUSSION OF APPLICABLE LAW West Virginia Code 924A-1-1 confers upon the Public Service Commission the power and duty to supervise and regulate the transportation of persons and property for hire by motor vehicle upon or over the public highways of this State so as to protect the safety and welfare of the traveling and shipping public in their use of transportation agencies by motor vehicle; to preserve, foster, and regulate transportation and permit m -25-

26 the coordination of transportation facilities; and to provide the travel- ing and shipping public with transportation agencies rendering stabilized service at just and reasonable rates. West Virginia Code provides, in part, that it shall be unlawful for any common carrier by motor vehicle to operate within this State without first having obtained from the Commission a certificate of convenience and necessity. The statute provides that before granting a certificate to a common carrier by motor vehicle the Commission shall take into consideration existing transportation facilities in the territory for which a certificate is sought, and in case it finds from the evidence that the service furnished by existing transportation facilities is reasonably efficient and adequate, the Commission shall not grant a certificate. Before commencing operation, all common carriers are required to obtain a certificate of convenience and necessity from the Commission as required by and pursuant to the provisions of West Virginia Code An applicant for a certificate of convenience and necessity has the burden of proof to establish that public convenience and necessity require the proposed service. Weirton Ice & Coal Supply Company v. Public Service Commission, 240 S.E.2d 686, 689 (W.Va. 1977). The law provides that there must be a showing of both "convenience and necessity", not "convenience or necessity," the language being conjunctive not disjunctive. Charleston Transit Co. v. Public Service Commission, 142 W.Va. 750, 758, 98 S.E.2d 437 (1957). The Commission has interpreted these requirements to mean that the applicant must demonstrate that it has the financial ability, experience, and fitness to provide a needed, useful and responsive public service, as well as that the public convenience and necessity require the proposed -26-

27 service. Ford Brothers, Inc., M.C. Case No , April 9, The applicant must produce public witnesses who are able to testify that the proposed service is needed in the area of application. Harless Excavating Company, Inc., M.C. Case No , April 23, If the evidence of record in the case reveals that there is some kind of need in the proposed area of application, the applicant has established a prima facie case that public convenience and necessity require the proposed service and that the service furnished by existing transportation facilities is not reasonably efficient and adequate. Ford Brothers, Inc., supra. In order to make this prima facie showing of some kind of need in the community, the applicant need not establish that there is a public need in each and every point within the requested authority. Boudman Enterprises, Inc., M.C. Case No , April 24, The applicant is not required to demon- strate by positive proof that the service furnished by existing facilities is not reasonably adequate and efficient. Additionally, along with the testimony of public witnesses (See, Talley Well Service, Inc., M.C. Case No , November 20, 1980), factors such as the desirability of addi- tional competition and the enhancement of a company's ability to provide a prompt and efficient public service may warrant a finding that the addi- tional service is required by the public convenience and necessity. Mac's Wrecker Service, Inc., M.C. Case No. 3358, December 13, Once the applicant has presented satisfactory evidence that public convenience and necessity require the proposed service, the burden of proof then shifts to those persons who are protesting the application. The Protestants must demonstrate by a preponderance of the evidence that the service furnished by existing transportation facilities is reasonably efficient and adequate - and that the entry into the field by the applicant rn -27-

28 would adversely affect or be detrimental to the public (because, for example, additional competition would be ruinous to existing common carriage) and that all reasonable needs in the area of application are being met. Harless, supra, at page 3. The Protestants must establish that the granting of the requested authority would affect the operations of existing common carriers to an extent contrary to the public interest and this evidence must be demonstrated by other than self-serving state- ments of the Protestants as to the adequacy and efficiency of their concerns in meeting demands. (Id.) - Thus, in order to meet their burden of proof in an application for a certificate of convenience and necessity, the Protestants must present witnesses other than themselves before the Commission will deny an application based on their presentation. Ford Brothers, Inc., supra. In the Commission's recent decisions regarding motor carrier law and the granting of certificates to operate as common carriers in this State, the Commission has established several presumptions. The Commission has established the rebuttable presumption that competition is in the public interest and that the public's interest in efficient, adequate, reasonably priced and reasonably available service is paramount. Additionally, once the applicant has established a prima facie case, the rebuttable presump- tion is created that existing services are not reasonably efficient and adequate. See, Joseph C. Frazier, M.C. Case No , and Taxi Service, Inc., M.C. Case No. 866, February 9, Applicant's Prima Facie Case No Frotestant disputed the sound financial condition of the Applicant or its ability to provide service throughout Mineral County. Howell's?Q -LV- =- D

29 affiliation with HTI, the largest commercial waste hauler in the Cumberland area, indicates that the Applicant will be able to obtain the vehicles, employees and equipment necessary to provide containerized service to business, industrial and commercial customers throughout Mineral County. The testimony of Messrs. Howell, Grogan and Boxley, as well as the numerous photographic exhibits, are ample evidence of the soundness and quality of the Applicant's operation. It must be noted that the Applicant has occasionally failed, in a technical sense, to abide by all of the Commission's regulations. For example, the Applicant continued to provide service from April 1, 1987, in the Frankfort Magisterial District despite the fact that Howell did not file certificates of insurance in a form acceptable to the Commission until late June. In addition, a written Certificate of Lease had not been filed with the Commission pursuant to Rule 9.04 at the time of the hearing. On the basis of the evidence presented, however, the Administrative Law Judge finds that these technical violations of the Commission's Rules were in good faith and, for that reason, do not approach the level necessary to raise any question about the Applicant's fitness. Robert Thalman and Bruce Voellinger, dba Cross Town Movers, M.C. Case No C, January 27, As Mr. Howell observed, former residents of A & M Disposal would have been without service had Howell not continued to provide service during the time that the certificates of insurance were being replaced with forms acceptable to the Commission. In any event, it is clear from the record that Howell's vehicles were insured at all times, and this filing problem was purely technical under Rule Similarly, the Administrative Law Judge takes notice of the fact that, shortly after -29-