ci(eori c3z fl1sck LLP July 29, 2015 Rosemary Chiavetta, Secretary Pennsylvania Public Utility Commission P. 0. Box 3265 Harrisburg, PA

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1 H S ATTORNEYS AT LAW ci(eori c3z fl1sck LLP Thomas J. Sniscak (717) x224 tisniscak()hmsieai.com Christopher M. Arfaa (717) x Whitney E. Snyder (717) x260 wesnyder(ihmsieat.coni 100 North Tenth Street, Harrisburg, PA Phone: Fax: VIA ELECTRONIC FILING Rosemary Chiavetta, Secretary Pennsylvania Public Utility Commission P. 0. Box 3265 Harrisburg, PA July 29, 2015 RE: Petition of the Borough of Cornwall for a Declaratory Order That its Provision of Water Service to Isolated Customers Adjoining Its Boundaries Does Not Constitute the Provision of Public Utility Service Under 66 Pa. C.S. 102; Docket No. P ; CORNWALL BOROUGH MUNICIPAL AUTHORITY S PREHEARING CONFERENCE MEMORANDUM Dear Secretary Chiavetta: Please find enclosed for electronic filing with the Commission the Cornwall Borough, Lebanon County, Municipal Authority s Prehearing Conference Memorandum in the abovecaptioned proceeding. A copy of this document has been served in accordance with the attached Certificate of Service. Thank you for your attention to this matter. hesitate to contact me. If you have any questions, please do not Very truly yours, TJS/CMA/das Enclosure cc: Honorable David A. Salapa Per Certificate of Service Thomas J. Sniscak Christopher M. Arfaa Whitney E. Snyder Counsellor Cornwall Borough, Lebanon County, Municipal Authority MAILING ADDRESS: P.O. BOX 177$ HARRISBURG, PA 17105

2 BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION Petition of the Borough of Cornwall for a Declaratory Order That its Provision of Water Service to Isolated Customers Adjoining Its Boundaries Does Not Docket No. P Constitute the Provision of Public Utility Service Under 66 Pa. C.S. 102 PREHEARING CONFERENCE MEMORANDUM OF THE CORNWALL BOROUGH MUNICIPAL AUTHORITY TO: THE HONORABLE DAVID A. SALAPA The Cornwall Borough, Lebanon County, Municipal Authority (Authority) by and through its attorneys in this matter, Hawke McKeon & Sniscak LLP, submits this Initial Prehearing Conference Memorandum pursuant to the Prehearing Conference Order issued June 24, 2015, and 52 Pa. Code A. Service of Documents The Authority requests that all documents be served on the following individual: Thomas J. Sniscak, Attorney ID HAWKE MCKEON & SNI$CAK LLP 100 N. 10th Street P.O. Box 1778 Harrisburg, PA Tel. (717) tj sniscakhmslega1. corn The Authority also requests that any electronic service list utilized by the parties in this proceeding include Thomas J. Sniscak (tj sniscak(hmsle gal. corn), Christopher M. Arfaa (crnarfaaiiihrnslegal.corn) and Whitney E. Snyder (wesnyder@hrnslegal.com). The Authority is

3 willing to extend the same courtesy upon request of any other party for any s or electronic service to the parties. B. Statement Regarding Possible Settlement The Authority is willing to discuss a possible settlement. C. Statement of Facts in Dispute As set forth in the Answer and New Matter filed by the Authority in response to the Borough s Petition, there are numerous facts disputed by the parties. Moreover, the facts here differ from the facts in the cases relied upon by the Borough in its Petition. The disputed facts include, but are not limited to, the following: 1. Whether the Borough will furnish safe and reliable water distribution service upon acquisition of the Authority s water distribution system (Petition 3); 2. Whether the group of water service customers outside the Borough s borders is small, defined, privileged and limited (Petition 3; see id. J 9. 14); 3. Whether the Borough will provide service to its extraterritorial customers consistent and equal to the rates, terms and conditions applicable to customers within the Borough s municipal borders. upon acquisition of the Authority s water distribution system (Petition 3); 4. Whether the continued provision of water service to extraterritorial locations or new extraterritorial locations in the future constitutes the provision of public utility service; 5. Whether the Authority has limited service to customers residing otttside the Borough s municipal limits (Petition 5): 6. Whether the Authority s service to the 47 extraterritorial premises currently served is limited to the customers who currently own the properties (Petition 5) or is extended to all future tenants and owners of such properties (Answer and New Matter at 13); 7. Whether the water service the Authority provides to the 47 extraterritorial customers is incidental (Petition 5) to some property right or the same public water service provided to all other Authority customers; 8. Whether the 47 extraterritorial customers are within close proximity to existing water mains (Petition 5); 7

4 9. Whether main extensions were required in order to serve some of the Authority s extraterritorial customers (Answer and New Matter at 13); 10. Whether all extraterritorial water customers to be served by the Borough upon termination of the Authority... are directly adjacent and abut to [sic] the Borough s municipal boundaries (Petition 5); 11. Whether the... Authority... has held... itself out as a provider of public utility services to extratenitorial customers (Petition 5): 12. Whether the Authority s extraterritorial customers had no viable option for obtaining public water service from any provider other than the Authority (Petition 5); 13. Whether a developer has recently requested that the Authority issue a capacity letter for approximately 64 new residential units to be built in West Cornwall Township in the event there is a problem with the local water company being able to provide the required water service in a timely manner (Answer and New Matter at 15); 14. Whether Alden Place, which extends into West Cornwall Township, nevertheless remains a Cornwall Borough development for all practical purposes (Petition 6); 15. Whether the 2$ plot portion of Alden Place located in West Cornwall Township was completely severed from the remainder of West Cornwall Township by State Routes 0322 and 0072 (Petition 6) for purposes of water service; 16. Whether unique geographic characteristics severely limited the available options for water service to the portion of Alden Place located outside the Borough (Petition 7); 17. Whether [d]uring development of Alden Place, Quentin Water Company ( QWC ), a PUC-certificated water utility authorized to serve West Cornwall Township, informed the developer that costs to extend service to the 28 plots in West Cornwall Township would be prohibitively expensive (Petition 7); 18. Whether the West Cornwall Township Board of Supervisors... agreed to allow all land development and zoning issues [concerning Alden Place] to be handled by Cornwall Borough (Petition 7); 19. Whether the connections to the 28 Alden Place plots located in West Cornwall Township were necessary due to exigent circumstances (Petition 8); 20. Whether the Authority s connections to the Alden Place plots located in West Cornwall Township were the result of the developer s decision to extend the Authority s mains rather than the Quentin Water Company s mains (Answer and New Matter at 1$); 3

5 21. Whether the pending 25 extraterritorial connections within the Alden Place development... were authorized to connect to the system under unique and exigent circumstances (Petition 8); 22. Whether the Authority continues to receive... requests for... extratenitorial connections (Petition 8); 23. Whether the Authority s rates differ[] on a customer class basis (Petition 10); 24. Whether approval of the Borough s Petition will... increase the rates presently charged to customers (Petition 10); 25. Whether the Borough intends to retain all operational staff currently servicing the water system on behalf of the Authority (Petition 10); 26. Whether customers would... experience a decline in service quality upon transfer of the water system to the Borough (Petition 10); 27. Whether the Borough s service to extraterritorial customers is private in nature (Petition 14); 28. Whether the Borough has served the Petition upon each of the extraterritorial customers by hand-delivery (Petition 15); 29. Whether there are additional property owners beyond the Borough s limits who would be interested in service from the Authority for which there is sufficient capacity and where there is no existing public water service (Answer and New Matter at 23); 30. Whether the Authority has always been open to receive requests from extraterritorial customers who do not wish to obtain service from their local water company or wells (Answer and New Matter at 23); 31. Whether neighboring water systems have asked the Authority to provide back- up service (Answer and New Matter at 24); 32. Whether existing and potential residential and commercial lots could be served from the Authority s water main that extends 3000 feet into West Cornwall (Answer and New Matter at 27); 33. Whether the Authority has received requests from customers located within West Cornwall for service from the Authority s water main that extends 3000 feet into West Cornwall (Answer and New Matter at 27); 34. Whether the Borough has attempted to force expedited transfer of the Authority s water distribution system and sewer collection systems to the Borough without employing or retaining personnel qualified to operate and maintain those systems (Answer and New Matter at 44); 4

6 35. Whether the Borough has promised water rate reductions on the basis of false assumptions and in the absence of a legitimate, competent rate study, apparently in order to divert the public s attention from its true purposes, which are contrary to the public interest and unrelated to water and sewer service (Answer and New Matter at 44-45); 36. Whether the Borough has attempted to prevent the Authority from fulfilling its function as an independent Commonwealth agency, attempting to intimidate Authority officials with misstatements of the law and baseless threats of personal liability for taking any action contrary to the Borough s peremptory commands (Answer and New Matter at 45); and 37. Whether the Borough has demonstrated a disregard for conflicts of interest, or the appearance thereof, by trying to have the Authority pay for the installation of a manhole riser at the residence of an immediate member of a sitting councilman s family, by permitting said councilman to vote in favor of that effort, and then by appointing said councilman to the Authority Board (Answer and New Matter at 45); D. Statement Regarding A Joint Stipulation Of Facts If No Facts Are In Dispute (Not applicable.) f. Proposed Plan and Schedule of Discovery and Proposed Litigation Schedule The Authority proposes the following litigation schedule, which includes one day of public input hearings: August 3,2015 August 21, 2015 September 15, 2015 September 22, 2015 October 19, 2015 November 3, 2015 November 6, 2015 Nov , 2015 December 3,2015 December 22, 2015 Prehearing Conference Service of Petitioner s written direct testimony Public input hearings in the Cornwall vicinity. Service of other parties written answering testimony Service of Petitioner s written rebuttal testimony Service of other parties surrebuttal testimony Rejoinder outline(s) Evidentiary hearings (including oral rejoinder) filing and service of main briefs Filing and service of reply briefs 5

7 The Authority proposes the following modified discovery procedures in order to ensure full and fair discovery of the facts alleged in the parties written testimonies within the time allowed by the foregoing litigation schedule: 1. The response period for replying to written interrogatories, requests for production and requests for admissions is within ten (10) calendar days of receipt, unless otherwise indicated. Responses may be served electronically but hard copies must follow by first-class mail. For purposes of tracking due dates, discovery requests served on a Friday after 12:00 p.m. shall be deemed to have been served on the following business day. 2. Objections to interrogatories, requests for production and requests for admissions are to be communicated orally to the propounder within three (3) calendar days of receipt and in writing within five (5) calendar days of receipt. The parties are directed to confer, by telephone or , and attempt to resolve the objections. 3. Motions to dismiss objections and compel responses shall be filed and served on the AU and other parties within three (3) calendar days of receipt of the written objections. Answers to such motions shall be filed and served within three (3) calendar days after filing of the motion. 4. If the objections are not resolved, counsel will alert the AU by of the need for a ruling, and a conference call may be scheduled. 5. Interrogatories, requests for production and requests for admissions which are objected to but which are not made the subject of a motion to compel will be deemed withdrawn. 6. Pursuant to 52 Pa.Code 5.341(b), neither interrogatories nor responses are to be served on the Commission or the AU, although a certificate of service may be filed with the Commission s Secretary. 7. Interrogatories, motions to compel and responses are to be served electronically as well as on paper. 6

8 F. Witnesses 8. Responses to requests for document production, entry for inspection or other purposes shall be served in-hand within ten (10) calendar days. 9. Any discovery-related pleading such as objections, motions, or answers served on a Friday or the day before a holiday recognized by the Commission will be deemed to have been served on the following business day for purposes of tracking due dates. At this time, the Authority intends to call Barbara Henry, Executive Director, Cornwall Borough Municipal Authority, to testify as to the disputed issues of fact set forth above and in the Authority s Answer and New Matter. The Authority anticipates identifying and calling additional witnesses to testify in this matter and reserves its right to do so. The Authority also reserves the right to adopt any testimony of other witnesses, in whole or in part, and to offer additional witnesses and exhibits as may be necessary to address the testimony, exhibits, or evidence that may be presented by any party in this proceeding. G. Issues and Sub-Issues the Authority Intends to Address The issues and sub-issues the Authority intends to address in this proceeding, and the Authority s positions with respect to those issues, are described in detail in the Answer and New Matter the Authority filed in response to the Petition, which is hereby incorporated by reference as if set forth at length. The Authority reserves the right to present additional testimony and exhibits on any other issues that may arise during the course of this proceeding. H. Evidence the Authority Proposes to Present at Hearing The Authority intends to present evidence in support of its positions as described in the Authority s Answer and New Matter, which is hereby incorporated by reference as if set forth at length. The Authority may present additional testimony and exhibits after discovery or in response to testimony or exhibits introduced by any party or witness in this proceeding. 7

9 WHEREFORE, the Cornwall Borough, Lebanon County, Municipal Authority respectfully submits this Prehearing Conference Memorandum. Respectfully submitted, Dated: July 29, 2015 Thomas J. Sniscak, Attorney I.D Christopher M. Arfaa, Attorney I.D Whitney E. Snyder, Attorney I.D HAWKE MCKEON & SNISCAK LLP 100 N. 10th Street P.O. Box 177$ Harrisburg, PA Tel. (717) tj sniscakhmslega1.com cmarfaahmslegal.com wesnyderhmslegal.com Attorneys for the Cornwall Borough, Lebanon County, Municipal Authority 8

10 BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION Petition of the Borough of Cornwall for a Declaratory Order That its Provision of Water Service to Isolated Customers Adjoining Its Boundaries Does Not Constitute the Provision of Public Utility Service Under 66 Pa. C.S. 102 Docket No. P CERTIFICATE OF SERVICE I hereby certify that I have this day served a true and correct copy of the foregoing document upon the parties, listed below, in accordance with the requirements of 52 Pa. Code 1.54 (relating to service by a party). VIA FIRST CLASS MAIL James P. Dougherty Adeolu A. Bakare Andrew S. Ziegler McNees Wallace & Nurick, LLC 100 Pine Street P0 Box 1166 Harrisburg, PA jdougherty@rnwn.com abakare@rnwn.com aziegler(rnwn.com Steven Gray, Esquire Office of Small Business Advocate Commerce Building 300 North Second Street, Suite 202 Harrisburg, PA sgray@pa.gov Christine Hoover Erin Gannon Office of Consumer Advocate 555 Walnut Street Forum Place 5th Floor Harrisburg, PA Cf1oover@paoca.org EGannon@paoca.org Johrmie Simms, Esquire Bureau of Investigation and Enforcement Pennsylvania Public Utility Commission Commonwealth Keystone Building 400 North Street, 2nd Floor West Harrisburg, PA josimms@pa.gov DATED: July 29, 2015 Thomas J. Sniscak Christopher M. Arfaa Whitney E. Snyder