PUBLIC SERVICE COMMISSION CHARLESTON
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1 ENTERED MqSc CASE NO S-MA TOWN OF FAYETTEVILLE, a municipal corporation, Fayette County. Investigation and suspension of increase in sewer rates and charges as a result of petition filed in accordance with West Virqinia Code b. OF WEST VIRGINIA CHARLESTON Entered: June RECOMMENDED DECISION PROCEDURE On April 22, 1993, the Town of Fayetteville (Town or Fayetteville), a municipal corporation, Fayette County, adopted an ordinance increasing the rates and charges for sewer service to its approximately 969 customers, to become effective June 7, West Virginia Code $24-2-4b, enacted March 10, 1979, and amended July 1, 1981, removes from Commission jurisdiction primary approval of rate increases of municipally operated public utilities in this State except upon the filing of a petition within thirty (30) days of the adoption of the ordinance changing such rates and charges by: any customer aggrieved by the changed rates or charges who presents to the Commission a petition signed by not less than twenty-five percent of the customers served by such municipally operated public utility; or any customer who is served by a municipally operated public utility and who resides outside the corporate limits and who is affected by the change in said rates or charges and who presents to the Commission a petition alleging discrimination between customers within and without the municipal boundaries, if said petition is accompanied by evidence of discrimination; or any customer or group of customers who are affected by said change in rates who reside within the municipal boundaries and who present a petition to the Commission alleging discrimination between those customers or group of customers and other customers of the municipal utility, if said petition is accompanied by evidence of discrimination.
2 ~ ~ On May 24, 1993, the Commission received a petition from approximately 259 customers of the Town, in opposition to the proposed sewer rate increase. On June 1, 1993, the Public Service Commission received a Motion from the Town of Fayetteville, requesting an immediate hearing to determine the validity of the May 24, 1993 petitions filed in this proceeding. Principally, the Town's Motion asserts that, according to its comparison of the petitions filed with the Public Service Commission with its own customer billings, the petitions do not contain the signatures of the required 25% of the customers served by the Town's system, required by West Virqinia Code b(d)(l) to allow the Commission to invoke its jurisdiction pursuant to said Code section. The Town also noted that the petition was delivered to the Commission thirty two (32) days following the adoption of the rate ordinance, although West Virginia Code b requires such a petition to be filed within thirty (30) days of the adoption of the rate ordinance. The Town also noted that the sewer rate increase had been enacted by the Town in connection with a sewer project pending before the Public Service Commission for a certificate of convenience and necessity in Case No S-CN and that the Town has already been ordered by the Circuit Court of Fayette County to have the proposed sewer project in operation by May 1, The Motion asserted that any delay in action by the Commission in determining the validity of the petitions and any resulting delay on the request for approval of the increased rates and charges would cause the Town irreparable harm in that the project could not be commenced and completed by the Court-ordered deadline and that financing for the construction would be in jeopardy, inasmuch as any delay could result in higher bids for construction and an inability to obtain adequate financing for the project based upon the rate increase proposed. Accordingly, the Town requested an immediate hearing before the Commission to determine the validity of the petitions filed on May 24, 1993; that the petitions be declared to be invalid and not filed in accordance with West Virginia Code $24-2-4(b)(d)(l); that the Commission render an immediate decision and an expedited ruling with regard to the matters set forth in the Motion; that the Commission rescind its assumption of jurisdiction over the sewer municipal ordinance increasing the Town's sewer rates and charges; that the Commission enter an order forthwith issuing a certificate of convenience and necessity to the Town of Fayetteville in Case No S-CN; and that the Commission grant such other relief as may be deemed necessary and appropriate. On June 2, 1993, the Public Service Commission issued an Order invoking its jurisdiction in this matter and making the Town of Fayetteville a Respondent to this proceeding. Pending investigation, hearing and decision thereon, the Commission suspended the proposed sewer rates and charges contained in the Town's municipal ordinance and deferred their use until 12:Ol a.m., October 6, 1993, unless otherwise ordered by the Commission, to enable the Commission to examine and investigate the proposed sewer rate increase and to provide time for the Administrative Law Judge to conduct the necessary hearing required by the pertinent provisions of West Virqinia Code. Additionally, the Commission Order referred this matter to the Division of Administrative Law Judges for a decision to be rendered on or before September 6, The Commission
3 ~ Order further directed that Commission Staff submit its report in this case on or before July 22, On June 4, 1993, the undersigned Administrative Law Judge issued a Procedural Order in this case, setting an immediate hearing on the validity of the petitions as requested by the Town in its motion. The hearing was scheduled for Thursday, June 10, 1993, at 1:30 p.m., in the County Commissioners' Courtroom, Fayette County Courthouse, Fayetteville, West Virginia. The order also stated that, in addition to addressing the validity of the names contained on the petitions, the ALJ wanted the parties to address the legality of the Commission's acceptance of petitions filed outside the 30-day window provided by the West Virginia Legislature for the filing of such petitions. The order also indicated that an expedited transcript would be requested at the hearing and, if deemed necessary by the parties, an expedited briefing schedule would be established at the conclusion of the hearing. The order did not require the Town to provide public notice of the hearing, since the issues to be addressed were legal in nature only and did not deal with the substance of the municipal rate ordinance. The hearing set for June 10, 1993, was held as scheduled, with James C. Blankenship, Esquire, appearing on behalf of the Town of Fayetteville; Susan Riggs, Esquire, of the Legal Division, appearing on behalf of Commission Staff; and Robert Arthur, an individual, appearing pro E, who submitted the petitions to the Public Service Commission on behalf of the Citizens Utility Action Group (Citizens). The Town presented the testimony of one witness and two witnesses spoke on behalf of the Citizens. Commission Staff presented no testimony. The Town additionally submitted three exhibits into evidence in this case. At the conclusion of hearing on June 10, 1993, this matter was submitted for a decision. EVIDENCE The Town of Fayetteville called as its witness Paula Ballard, the office clerk for the Town. Ms. Ballard sends out the water and sewer bills and keeps the books for the water and sewer systems. She testified that not everyone who has the Town's water service has sewer service, but all sewer customers also have the Town's water. Ms. Ballard also sponsored the three Town exhibits. Town Exhibit No. 1 was a complete computer listing of all of the Town's sewer customers. The Town has 969 sewer customers, which was the same customer count as it had on April 22, 1993, when the Town adopted the municipal sewer rate ordinance. Town Exhibit No. 2 was the copy of the petition reviewed by Ms. Ballard for purposes of comparison with the sewer customer list. On Town Exhibit 2 Ms. Ballard had highlighted all of the names and signatures being challenged by the Town in this proceeding. Additionally, the Town had numbered each signature and each page for ease of identification of the challenged names. Town Exhibit 3 was a document prepared by the Town and sponsored by Ms. Ballard consisting of a list of all of the challenged names, containing the petition page and signature location; the name; the address; the account number for the address, if one existed; and the reason for the
4 Town's challenge to the signature. Since the Town has 969 sewer customers, the petitions would have to contain 243 valid signatures in order to successfully invoke Commission jurisdiction under West Virginia Code S24-2-4b. According to Ms. Ballard, removing all of the challenged signatures reduces the number of signatures on the petition to 228. Most of the challenges involve more than one signature for a service address; signatures for addresses which do not take the Town's sewer service; or signatures of people who were not customers of the Town's sewer system and were not the spouse of a customer of the Town's sewer system. Ms. Ballard went through each name on Town Exhibit No. 3 individually, indicating the signature's location on Town Exhibit 2, and reciting the information set forth on Town Exhibit No. 3. Copies of Town Exhibits 2 and 3 were provided to all parties and all parties were permitted to review Town Exhibit No. 1, the computer printout of all sewer system customers. Robert Arthur presented the testimony on behalf of the Citizens challenging the Town's municipal rate ordinance. Mr. Arthur explained that, after reviewing the Town's exhibits and the information which the Citizens had, the Citizens felt that they could perhaps validate two of the signatures challenged by the Town. However, that still would leave the petition short of the required number of signatures. Another witness on behalf of the Citizens, Mary Krese, indicated that she could validate two more of the challenged signatures on the Town's exhibits. However, the Citizens petitions would still be short of the required number of signatures. Accordingly, Mr. Arthur presented no testimony to validate any of the challenged signatures on the Town's exhibits. DISCUSSION The Public Service Commission has limited jurisdiction over rate increases of municipally operated public utilities. The provisions of West Virqinia Code $24-2-4b, as enacted on March 10, 1979, and amended on July 1, 1981, set forth specific jurisdictional limitations upon the Commission. Accordingly, the Public Service Commission can only invoke its jurisdiction over a municipal rate ordinance if it receives a valid petition in compliance with the provisions of that Code section within thirty days of the adoption of the ordinance. In this case, the applicable requirement is set forth in West Virginia Code b(c)(l), which requires the filing of a petition signed by not less than 25% of the customers served by the municipally operated public utility, within thirty days of the adoption of the municipal rate ordinance. The Public Service Commission has frequently discussed the fact that the requirements of West Virqinia Code S24-2-4b with respect to invoking the Commission's jurisdiction are specific jurisdictional limitations and the Public Service Commission has no authority to invoke its jurisdiction over a municipal rate ordinance absent the fulfillment of all of the requirements set forth in that Code section. (See, Case No W-MA, City of Loqan, Commission Order Dismissing Proceeding, September 14, 1984; Case No W-MA, City of Mount Hope, Commission Order Denying Petition for Reconsideration, July 19, 1985; Case No W-MA, Town of Meadow Bridge, Commission Order Affirming Recommended Decision, August 11, 1992). ~ ~ ~ _ I
5 As noted in the Procedure section of this decision, the Administrative Law Judge directed the parties to address the Commission's authority to accept petitions challenging municipal rate ordinances outside the 30-day window provided by the Legislature in West Virqinia Code b. In actuality, the Commission has previously addressed this issue many times and has determined that, since these requirements are jurisdictional in nature, the Commission may not accept a municipal rate ordinance filed outside the 30-day window. The ALJ would note that the petition challenging the Town of Fayetteville's rate ordinance in this case was filed on May 24, 1993, 32 days after the adoption of the municipal rate ordinance. However, this case need not be decided on that basis, since the Town's principal challenge to the petitions involves the validity of many of the signatures contained thereon. With respect to the validity of signatures on a petition challenging a municipal rate ordinance, the principal point of inquiry must always be whether or not the individuals signing the petition are customers of the municipal utility service for which the municipal rate ordinance was adopted. West Virqinia Code S24-2-4b(c)(l) specifically requires the signatures on the petition challenging a municipal rate ordinance to be signatures of the customers served by the municipally operated public utility. Additionally, the Public Service Commission has enacted procedural rules for Commission review of electric cooperative, telephone cooperative and municipal rate changes pursuant to West Virginia Code $ (municipal rate rules). Among other things, in those municipal rate rules the Commission has specified certain requirements and guidelines for determining the validity of customer signatures on rate ordinance petitions. Rule 2.2(b) contains the Commission's definition of the term "customer", which incorporates the statutory definition of the word "customer" as set forth in West Virginia Code S24-1-2, and also provides some additional guidelines. That section provides as follows: (b) Whenever used in Chapter 24 of the Code or this Rule, the term "Customer" shall mean and include any person, firm, corporation, municipality, public service district or any other entity who purchases a product or services of any utility and shall include any such person, firm, corporation, municipality, public service district or any other entity who purchases such services or products for resale. (1) This definition refers to customers of record with the utility and cannot be broadened to include all residents of a municipality or those who may be ultimate consumers of the product. (2) The spouse of a customer of record may sign a petition for the customer of record, but if both parties sign they are to be treated as one customer. Accordingly, from the plain language of the Commission's rules and the statutory definition of customer, a signature on a petition challenging a municipal rate ordinance must be the customer of record with the utility or the spouse of a customer of record. (See, Case No.
6 I W-MA, City of Hurricane, Recommended Decision, April 2, 1980; Case No S-MA, City of Bluefield, Recommended Decision, July 8, 1981; Case No W-MA, City of Gary, Recommended Decision, February 23, 1984; Case No WS-MA, City of Ronceverte, Commission Order Affirming Recommended Decision, October 11, 1985; Case No W-MA, Town of Meadow Bridge, Commission Order Affirming Recommended Decision, August 11, 1992). The intervenor in this proceeding, Robert Arthur, a member of the Citizens Utility Action Group for the Town of Fayetteville, acknowledged, after a review of the Town's challenges to the signatures, that the petition did not contain sufficient signatures to invoke the Commission's jurisdiction over the Town municipal rate ordinance and he presented no testimony to validate any signatures, other than the statement of Ms. Krese, with respect to only two of the signatures on the Town's challenged list. Accordingly, it must be determined that the petition filed on May 24, 1993, did not contain a sufficient number of valid signatures to successfully invoke the Commission's jurisdiction over the Town of Fayetteville's April 22, 1993 municipal sewer rate ordinance and, therefore, the Commission's order invoking its jurisdiction must be vacated and this proceeding must be dismissed from the Commission's docket of open cases. During his testimony, Mr. Arthur also raised one legal issue with respect to the validity of the Town's challenge to the petition filed on May 24, Mr. Arthur expressed the opinion that the Town had to adopt a municipal ordinance to challenge the petition filed to institute the municipal appeal proceeding with the Public Service Commission, and that, since no municipal ordinance had been enacted by the Town of Fayetteville to approve the filing by the Town of the motion challenging the May 24, 1993 petition, the action was invalid. Initially, it must be noted that the Public Service Commission would not appear to have jurisdiction to litigate this particular issue, since it would involve litigation involving the rights and powers of a Mayor of a municipal corporation and the obligations of a municipal corporation to take certain actions by municipal ordinance, none of which would appear to be within the Commission's jurisdiction as set forth in Chapter 24 of the West Virqinia Code. Nonetheless, the Administrative Law Judge has reviewed the pertinent Code provisions, contained in Chapter 8 of the West Virqinia Code, involving municipal corporations. West Virginia Code S states, in pertinent part, as follows, "When not otherwise provided by charter provision or general law, the mayor of every municipality shall be the chief executive officer of such municipality, shall have the powers and authority granted in this section, and shall see that the ordinances, orders, bylaws, acts, resolutions, rules and regulations of the governing body thereof are faithfully executed." It would appear from a reading of this provision, that it is the obligation of the Mayor to insure that municipal rate ordinances, like other municipal ordinances, are implemented. Accordingly, the filing of the motion by the Town to challenge the petition filed on May 24, 1993, with the Mayor's signed verification attached thereto, would appear to be legitimately within the scope of authority of the Mayor, unless the Town's
7 charter provides otherwise. Naturally, the Public Service Commission would not be the appropriate body to determine whether or not the Town's charter provided the Mayor with this authority or required some other action. Additionally, West Virginia Code sets forth specific enumerated instances when the action of a municipal governing body must be by municipal ordinance. These instances include levying taxes and collecting fees, requiring licenses to do business, relating to offenses and penalties, authorizing the issuance of bonds, providing for public improvements, relating to planning and zoning, providing for a contractual or other agreement with another jurisdiction, and other such matters. Additionally, as set forth in that Code section, a municipality's charter may require that certain actions be taken by municipal ordinance. The action of the Town, in challenging the petition in opposition to the Town's municipal rate ordinance, does not seem to fall within any of the enumerated cases set forth in West Virqinia Code S for which a municipal ordinance is required. Thus, the Administrative Law Judge is of the opinion that Mr. Arthk's argument with respect to the ability of the Town to challenge the petition filed on May 24, 1993, must fail. However, as noted above, the ALJ is of the opinion that the Public Service Commission is not the body with the jurisdiction to make this determination. Accordingly, this matter will not be discussed further in this order. FINDINGS OF FACT 1. On April 22, 1993, the Town of Fayetteville enacted a municipal rate ordinance increasing rates and charges to the Town's sewer customers. (See, Rate Ordinance filed with the Public Service Commission). 2. The Town of Fayetteville served 969 sewer customers on April 22, 1993, and maintained that same number of customers as of the date of hearing in this case challenging the validity of the petitions. (Testimony of Paula Ballard, Transcript June 10, 1993; Town Exhibit 1). 3. On May 24, 1993, thirty-two days after the adoption of the municipal rate ordinance, the Commission received a petition, containing 259 signatures, in opposition to the proposed sewer rate increase. (Petition filed May 24, 1993). 4. Twenty-five percent (25%) of the Town's 969 sewer customers would be 243 customers. (Testimony of Paula Ballard, Transcript June 10, 1993). 5. After comparing its actual list of sewer customers to the petition filed in opposition to the municipal sewer rate ordinance, the Town challenged 31 signatures thereon, reducing the number of valid signatures on the petition to 228, less than the number required to invoke Commission jurisdiction over the Town municipal sewer rate ordinance. (Town Exhibits 2 and 3; Testimony of Paula Ballard, Transcript June 10, 1993).
8 ~~ ~~ 6. The citizens of the Town of Fayetteville felt that they could validate perhaps only four of the signatures challenged by the Town of Fayetteville. (See, Testimony of Bob Arthur, Transcript June 10, 1993; Testimony of Mary Krese, Transcript June 10, 1993). 7. Other than the statements that they could perhaps validate four signatures on the Town's list of challenges, the citizens presented no further testimony or evidence in this case. (See, Transcript generally, June 10, 1993). CONCLUSIONS OF LAW 1. The petition filed on May 24, 1993, in opposition to the Town of Fayetteville's April 22, 1993 municipal sewer rate ordinance, does not contain a sufficient number of signatures to successfully invoke Commission jurisdiction in this matter. 2. Since the petition filed in this proceeding on May 24, 1993, requesting the Commission to invoke its jurisdiction over the Town of Fayetteville's April 22, 1993 municipal sewer rate ordinance does not contain a sufficient number of valid signatures to comply with the requirements of West Virginia Code $24-2-4b, the Public Service Commission cannot invoke jurisdiction over this matter and, accordingly, the Commission Order Invoking Jurisdiction entered on June 2, 1993, must be vacated and this proceeding must be removed from the Commission's docket of open cases. (See, City of Benwood V. Public Service Commission, 271 S.E.2d 342 (W.Va. 1980); Case No W-MA, City of Loqan, Commission Order, September 14, 1984; Case No W-MA, City of Mount Hope, Commission Order, July 18, 1985; Case No W-MA, Town of Meadow Bridge, Commission Order, August 11, 1992). ORDER IT IS, THEREFORE, ORDERED that the motion filed by the Town of Fayetteville on June 1, 1993, requesting that the Public Service Commission declare invalid the petition filed on May 24, 1993, in opposition to the municipal sewer rate ordinance, be, and it hereby is, granted. IT IS FURTHER ORDERED that the Commission Order issued on June 2, 1993, invoking Commission jurisdiction over the municipal sewer rate ordinance adopted by the Town of Fayetteville on April 22, 1993, be, and it hereby is, vacated. IT IS FURTHER ORDERED that this proceeding be dismissed and removed from the Commission's docket of open cases. The Executive Secretary is hereby ordered to serve a copy of this order upon the Commission by hand delivery, and upon all parties of record by United States Certified Mail, return receipt requested. Leave is hereby granted to the parties to file written exceptions supported by a brief with the Executive Secretary of the Commission within
9 fifteen (15) days of the date this order is mailed. If exceptions are filed, the parties filing exceptions shall certify to the Executive Secretary that all parties of record have been served said exceptions. If no exceptions are so filed this order shall become the order of the Commission, without further action or order, five (5) days following the expiration of the aforesaid fifteen (15) day time period, unless it is ordered stayed or postponed by the Commission. Any party may request waiver of the right to file exceptions to an Administrative Law Judge's Order by filing an appropriate petition in writing with the Secretary. No such waiver will be effective until approved by order of the Commission, nor shall any such waiver operate to make any Administrative Law Judge's Order or Decision the order of the Commission sooner than five ( 5) days after approval of such waiver by the Commission. MKM : ma 1 Melissa K. Marland Chief Administrative Law Judge
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