PENNSYLVANIAPUBLIC UTILITY COMMISSIONHarrisburg, PA 17105-3265

Public Meeting held November 10, 2011

Commissioners Present:

Robert F. Powelson, ChairmanJohn F. Coleman, Jr., Vice ChairmanWayne E. GardnerJames H. Cawley, DissentingPamela A. Witmer, Dissenting

Application of Laser Northeast Gathering Company, LLC for Approval to Begin to Offer, Render, Furnish, or Supply Natural Gas Gathering and Transporting or Conveying Service by Pipeline to the Public in Certain Townships of Susquehanna County, Pennsylvania

Docket No. A-2010-2153371

OPINION AND ORDER

BY THE COMMISSION:

Before the Pennsylvania Public Utility Commission (Commission) for

consideration and disposition is the Petition to Withdraw Application (Petition), filed by

Laser Northeast Gathering Company, LLC (Laser) on September 8, 2011, relative to the

above-captioned proceeding.1 The Pennsylvania Independent Oil and Gas Association

(PIOGA) filed Objections to the Petition to Withdraw Application (Objections) on

September 29, 2011. MarkWest Liberty Midstream & Resources, LLC (MarkWest) and

1 Pursuant to Section 5.94 of our Regulations, 52 Pa. Code § 5.94, either the presiding officer or the Commission will determine whether a withdrawal is permitted.

Laurel Mountain Midstream, LLC (LMM) filed a Joint Answer in Support of Petition to

Withdraw Application (Joint Answer) on October 3, 2011.

I. History of the Proceeding2

On January 19, 2010, Laser filed an Application for a Certificate of Public

Convenience (Certificate) authorizing it to begin to offer natural gas gathering and

transporting or conveying service by pipeline to the public in the townships of Apolacon,

Choconut, Forest Lake, Great Bend, Jessup, Liberty, Middletown, and New Milford in

Susquehanna County, Pennsylvania (Application). Notice of the Application was

published in the Pennsylvania Bulletin on January 30, 2010, at 40 Pa. B. 687, and in the

Susquehanna County Independent on January 27, 2010.

Subsequent to the receipt and consideration of protests and petitions to

intervene,3 evidentiary hearings were held on August 23 and 24, 2010.4 The record

consists of a transcript of 445 pages and the Parties’ testimony and exhibits. On

September 10, 2010, Laser, the OTS, Silver Lake, Vera Scroggins, and

William C. Fischer (collectively, the Settling Parties) filed a non-unanimous Joint

Petition for Settlement (Settlement). The Settling Parties requested that the Commission grant Laser a Certificate, subject to numerous modifications pertaining to safety, eminent domain and landowner 2 A detailed History of the Proceeding may be found in our Opinion and Order, entered on June 14, 2011, at this Docket (June 2011 Order) at 2-5. 3 The Parties to this proceeding include: MarkWest; PIOGA; Laser; the Office of Trial Staff (OTS); the Office of Consumer Advocate (OCA); Vera Scroggins; William C. Fischer; ETC Northeast Pipeline LLC (ETC); Silver Lake Association (Silver Lake); LMM; DTE Pipeline Company (DTE); and Superior Appalachian Pipeline, LLC (Superior). The OTS is now part of the Commission’s Bureau of Investigations and Enforcement. See, Implementation of Act 129 of 2008; Organization of Bureaus and Offices, Docket No. M-2008-2071852 (Final Procedural Order entered August 11, 2011).4 Public input hearings were also held. A summary of the extensive testimony from the public input hearings may be found in the Recommended Decision on pages 14-47.

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issues. The Settling Parties also urged the Commission to provide for the “light-handed” regulation of Laser.5 The Parties filed Briefs on

September 27, 2010, and Reply Briefs on October 12, 2010.

Administrative Law Judge (ALJ) Susan D. Colwell’s Recommended

Decision was issued on December 1, 2010, in which she disapproved the Settlement and

denied Laser’s Application. Several Parties subsequently filed Exceptions, Replies to

Exceptions, and various other documents.

Our June 2011 Order determined that Laser had met the threshold issue

that its proposed service constitutes “public utility” service under Section 102 of the

Public Utility Code (Code), 66 Pa. C.S. § 102, and we remanded this proceeding to the

Office of Administrative Law Judge (OALJ) to determine whether the granting of a

Certificate was “necessary or proper for the service, accommodation, convenience, or

safety of the public” under Section 1103(a) of the Code, 66 Pa. C.S. § 1103(a). We also

directed that the record be developed so that the following questions could be addressed:

(1) If a Certificate of Public Convenience is determined to be necessary or proper, should any conditions be imposed as conditions precedent?

(2) Should an exclusive service territory be considered?

(3) Should Laser’s interconnect contracts be publicly available to police and prevent unreasonable discrimination in violation of Section 1304 of the Code?

(4) Is Laser’s proposed tariff reasonable under the Code?

(5) Are the Settlement terms in the public interest?

5 A detailed description of the Settlement may be found in the June 2011 Order at 6-10.

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On June 29, 2011, MarkWest filed a Petition for Reconsideration or, in the

Alternative, Clarification and Amendment of the June 2011 Order. Also, on

June 29, 2011, PIOGA filed a Petition for Reconsideration of the June 2011 Order. On

July 11, 2011, Laser, the OTS,6 the OCA, and Vera Scroggins filed Answers to the

Petitions.

Four appeals were filed with the Commonwealth Court, but those appeals

were stricken as inoperative. Laurel Mountain Midstream, LLC v. Pa. PUC,

No. 1323 C.D. 2011 (August 1, 2011); MarkWest Liberty Midstream & Resources, LLC

v. Pa. PUC, No. 1322 C.D. 2011 (August 1, 2011); Superior Appalachian Pipeline,

L.L.C. v. Pa. PUC, 1287 C.D. 2011 (August 1, 2011); Pennsylvania Independent Oil and

Gas Association v. Pa. PUC, No. 1274 C.D. 2011 (August 1, 2011).

By Order entered August 25, 2011 (August 2011 Order), we denied

PIOGA’s request for reconsideration, denied MarkWest’s request for reconsideration,

and granted MarkWest’s request for clarification. Additionally, a Secretarial Letter was

issued on August 25, 2011, in which Commissioner Cawley requested that Laser and the

other Parties address specific issues in the remand proceeding.

As previously noted, Laser filed the instant Petition on September 8, 2011.

On September 29, 2011, PIOGA filed Objections. On October 3, 2011, MarkWest and

LMM filed a Joint Answer. On October 7, 2011, Laser filed a letter petition requesting

leave to respond to the Objections of PIOGA and the Joint Answer of MarkWest and

LMM (Letter Petition), as well as a Response to the Objections of PIOGA and the Joint

6 The OTS filed two Answers, one in response to PIOGA’s Petition and one in response to MarkWest’s Petition.

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Answer of MarkWest and LMM (Response). On October 13, 2011, MarkWest and LMM

filed an Answer to Laser’s Letter Petition and Response (October 13, 2011 Answer).7

Four Petitions for Review have been filed with the Commonwealth Court,

appealing our June 2011 Order and our August 2011 Order. PIOGA filed a Petition for

Review on September 23, 2011. Both MarkWest and LMM filed Petitions for Review on

September 26, 2011. Superior filed a Petition for Review on October 7, 2011.

II. Discussion

We note that any issue that we do not specifically address herein has been

duly considered and will be denied without further discussion. It is well settled that we

are not required to consider expressly or at length each contention or argument raised by

the parties. Consolidated Rail Corporation v. Pa. PUC, 625 A.2d 741 (Pa. Cmwlth.

1993); also see, generally, University of Pennsyl vania   v. Pa. PUC , 485 A.2d 1217

(Pa. Cmwlth. 1984).

A. The Commission’s Orders

1. June 2011 Order

In the June 2011 Order, we concluded that “[b]ased on our review of the

record, the applicable law, and the positions of the Parties, we disagree with the ALJ’s

7 Our Regulation at 52 Pa. Code § 5.94 provides only for the filing of a petition for leave to withdraw and an objection thereto. Laser properly requested leave to file a response to the filings of PIOGA, MarkWest and LMM. We will treat that request as a petition, pursuant to 52 Pa. Code § 5.41, which we will grant. In their responses, PIOGA, MarkWest, and LMM raised new requests for relief regarding rescission of our prior Orders, which were not previously addressed in Laser’s Petition. We will consider Laser’s Response, together with the October 13, 2011 Answer of MarkWest and LMM, to the extent that they raise new issues not previously raised in the Petition.

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decision that the service proposed by Laser is not ‘for the public’ and that, therefore,

Laser is not a public utility.” June 2011 Order at 23. We found that the record supported

a finding that Laser was proposing to hold itself out to all members of the customer group

that have a need for its service and, as such, was providing service “for the public” under

Section 102 of the Code, 66 Pa. C.S. § 102.8 We noted that, while Laser intends to use

negotiated contracts with its customers, the contracts are not meant to be exclusionary,

but to establish technical requirements, delivery points, and other terms and conditions of

service. We did not find Laser’s use of contracts to be a deterrent to conferring public

utility status because our Regulations allow negotiated contracts for natural gas

transportation pipelines. Id. at 26. As a public utility, if Laser and its customers cannot

agree upon any item, the Commission may establish just and reasonable terms and

conditions of service subject to Laser’s tariff, and Laser would also be subject to

Commission jurisdiction to establish just and reasonable rates and terms of service under

Sections 1301, 1304, and 1501 of the Code, 66 Pa. C.S. §§ 1301, 1304, and 1501.

8 Section 102 provides the following, in pertinent part:“Public utility”(1) Any person or corporations now or hereafter owning or operating in this Commonwealth equipment or facilities for:

(i) Producing, generating, transmitting, distributing or furnishing natural or artificial gas, electricity, or steam for the production of light, heat, or power to or for the public for compensation.

***(v) Transporting or conveying natural or

artificial gas, crude oil, gasoline, or petroleum products, materials for refrigeration, or oxygen or nitrogen, or other fluid substance, by pipeline or conduit, for the public for compensation. (2) The term does not include:

***(iii) Any producer of natural gas not

engaged in distributing such gas directly to the public for compensation.

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Id. at 26, 27.

Moreover, we stated that we disagreed with the ALJ’s determination that

the Settlement terms would not be enforceable. We determined the following:

Our enforcement authority exists under Section 502 of the Code, 66 Pa. C.S. § 502,9 which gives us the power to enforce Orders approving certificates of public convenience, as well as under Chapter 11 and related case law, which gives us the power to revoke certificates of public convenience for, among other things, a violation of an express settlement term approved by Commission Order.

Id. at 40. We noted that, on numerous occasions, we have approved settlements of utility

mergers/acquisitions subject to voluntary conditions proposed by applicants that address

issues beyond our jurisdiction. Id.

2. August 2011 Order

9 Section 502 provides as follows:

Whenever the commission shall be of opinion that any person or corporation, including a municipal corporation, is violating, or is about to violate, any provisions of [the Code]; or has done, or is about to do, any act, matter, or thing herein prohibited or declared to be unlawful; or has failed, omitted, neglected, or refused, or is about to fail, omit, neglect, or refuse, to perform any duty enjoined upon it by [the Code], or has failed, omitted, neglected or refused, or is about to fail, omit, neglect, or refuse to obey any lawful requirement, regulation or order made by the commission; or any final judgment, order, or decree made by any court, then and in every such case the commission may institute injunction, mandamus or other appropriate legal proceedings, to restrain such violations of the provisions of [the Code], or of the regulations, or orders of the commission, and to enforce obedience thereto.

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In the August 2011 Order, we denied the Petitions for Reconsideration filed

by PIOGA and MarkWest because they did not satisfy the standards for reconsideration

set forth in Duick v. Pennsylvania Gas and Water Company, 56 Pa. P.U.C. 553 (1982).

We stated that, in reaching our decision in the June 2011 Order, we relied on well-

established case law in determining that Laser was not using its contracts to control who

would receive service. We noted that, based on the record, we concluded that Laser’s

contracts were not intended to be exclusionary, but to establish technical requirements,

delivery points, and other terms and conditions of service. August 2011 Order at 13.

Moreover, we granted MarkWest’s request for clarification of our

June 2011 Order. In doing so, we stated,

[T]he absence of a finding of an intent to serve all producers that request service would be dispositive in determining that an entity is not a public utility. Similarly, a gatherer that uses contracts to determine which producers are privileged to demand service would likewise not be a public utility.

August 2011 Order at 18. We emphasized, however, that each case involves its own

unique set of facts and that we will apply the facts of each specific case to the applicable

law to determine the outcome in that specific case.

We stated that some of the facts we considered in reaching our

determination in this proceeding included the following:

Laser will be transporting or conveying natural or artificial gas by pipeline or conduit for compensation. June 2011 Order at 24.

Laser will serve any and all potential customers needing to move gas through the pipeline system. Id. at 25.

Laser intends to utilize negotiated contracts to secure customers; contracts are not meant to be exclusionary, but rather to establish technical requirements, delivery points, and other terms and conditions of service. Id. at 26.

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Laser has made a commitment to expand its capacity, as needed, to meet increased customer demand. Id. at 27.

We further stated that, if the above facts were not present, then the proposed service

would not qualify as “public utility” service and would, therefore, not be subject to our

regulation. August 2011 Order at 19.

B. Laser’s Petition to Withdraw Application

Before addressing the merits of Laser’s Petition, we will address our

reasons for ruling on the Petition in light of the outstanding appeals that have been filed

with the Commonwealth Court. In general, Rule 1701(a) of the Pennsylvania Rules of

Appellate Procedure, Pa. R.A.P. 1701(a), states that “after an appeal is taken or review of

a quasijudicial order is sought, the trial court or other government unit may no longer

proceed further in the matter.” However, Pa. R.A.P. 1701(b) sets forth some exceptions

to this general rule. It provides the following, in pertinent part:

(b) Authority of a trial court or agency after appeal.After an appeal is taken or review of a quasijudicial order is sought, the trial court or other government unit may:

***(6) Proceed further in any matter in which a non-

appealable interlocutory order has been entered, notwithstanding the filing of a notice of appeal or a petition for review of the order.

Pennsylvania Rule of Appellate Procedure 341, Pa. R.A.P. 341 defines a

final order, from which an appeal may be taken as of right. In pertinent part,

Pa. R.A.P. 341(c) states (emphasis added):

(c) Determination of finality. When more than

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one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim or when multiple parties are involved, the trial court or other governmental unit may enter a final order as to one or more but fewer than all of the claims and parties only upon an express determination that an immediate appeal would facilitate resolution of the entire case.… In the absence of such a determination and entry of a final order, any order or other form of decision that adjudicates fewer than all the claims and parties shall not constitute a final order.

Both the June 2011 Order and the August 2011 Order are interlocutory

orders and are not final orders within the meaning of Pa. R.A.P. 341. We expressly

stated the following in the June 2011 Order, at 28:

At this point, Laser has merely satisfied the threshold issue that its proposed service meets the definition of “public utility” service. See 66 Pa. C.S. § 1101 (“Upon the application of any proposed public utility…”). Next, the Commission must determine whether the granting of a Certificate of Public Convenience for Laser’s service, under the conditions proposed in the non-unanimous Settlement and otherwise, is “necessary or proper for the service, accommodation, convenience, or safety of the public” under Section 1103(a) of the Code, 66 Pa. C.S. § 1103(a).

Additionally, our Order entered July 15, 2011, at this Docket, stated at page 2 that “the

June 2011 Order is not a final order within the meaning of R.A.P. 341,” and we

questioned whether the petitions for reconsideration were properly before us at that time.

Nonetheless, as a precautionary measure, we granted reconsideration, pending review of,

and consideration on, the merits.

Because we have not made a final determination in this proceeding

regarding whether Laser should be issued a Certificate of Public Convenience, and this

proceeding has been remanded for a determination on this issue, we are of the opinion

that we can consider Laser’s Petition pursuant to Pa. R.A.P. 1701(b)(6), notwithstanding

the appeals that have been filed.

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1. Positions of the Parties

In its Petition, Laser requests leave to withdraw its Application in this

proceeding. Laser avers that its proposed plan and intent has changed in the following

manner:

it (1) is no longer willing to serve any and all potential customers; (2) will use contracts to select and serve a defined and limited group of customers; and, (3) is no longer committed to expand its facilities to meet demand of the public as would a public utility.

Laser’s Petition at 2. Laser states that, according to the August 2011 Order,10 it will be

operating as a private pipeline, as opposed to a public utility pipeline and, consequently,

it no longer desires to pursue its Application to become a public utility pipeline.

In its Objections, PIOGA states that, while it supports the end result of

Laser’s Petition because it will mean no public utility status for Laser’s midstream

gathering pipeline, the Petition does not contain sufficient information as required by the

Commission’s Regulations and decisions upon which the Commission can determine

whether granting the Petition is in the public interest. PIOGA’s Objections at 1, 3.

PIOGA avers that the Commission has made clear11 that more than a simple conclusive

statement of changed intent, such as that provided by Laser here, is required to satisfy the

10 Laser cites to the August 2011 Order, at 19, which, Laser states, emphasized Laser’s intent to “serve any and all potential customers needing to move gas through the pipeline system,” to not use “exclusionary” contracts, and to make a “commitment to expand its capacity as needed, to meet customer demand.” Laser’s Petition at 1.

11 PIOGA relies upon the Commission’s decisions in Kaufman v. Verizon Pennsylvania Inc., Docket No. C-20055680 (Order entered November 19, 2008) and Phone Talk, Inc., et al. v. The Bell Telephone Company of Pennsylvania, 1992 Pa. PUC LEXIS 53 (June 19, 1992).

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Section 5.94(a) requirement.12 Id. at 3, 4. PIOGA believes that Laser should be required

to disclose to the Commission the factors that affected its change of intention, including

developments both in and outside of the Commission’s proceeding and whether its

change of intention involves a settlement of any issues in this proceeding with any party.

PIOGA also believes that Laser should be required to disclose any changes to the terms

and conditions of its existing contracts; whether it has begun providing its midstream

gathering service, and, if not, when it intends to do so; and whether its private pipeline

response to producer demand for expansion of its system will differ from what its public

utility pipeline response would have been. Id. at 5.

PIOGA also objects to Laser’s Petition on the basis that the Petition fails to

address its effect on the Commission’s June 2011 Order and August 2011 Order.

PIOGA avers that, due to the ramifications of the Commission’s decision in this

proceeding for other midstream gathering company application proceedings, the public

interest would be served if the Commission expressly addresses the effect of Laser’s

withdrawal request on the Commission’s prior Orders in this proceeding. PIOGA states

that, if the Commission grants Laser’s Petition, the Commission should rescind or vacate

the June 2011 Order and August 2011 Order and state that the Orders and the

determinations therein have no precedential effect and are not to be cited or relied upon in

Commission proceedings. Id. at 8.

In their Joint Answer, MarkWest and LMM state that they support Laser’s

Petition and encourage the Commission to approve it. Joint Answer at 1, 2. They believe

withdrawal of the Application is appropriate because Laser’s stated intention not to hold

itself out as offering service “for the public” disqualifies Laser’s natural gas gathering

service from being “public utility” service according to the Commission’s Orders. They

also aver that withdrawal of the Application, which is currently on remand before the

12 52 Pa. Code § 5.94(a) (relating to withdrawal of pleadings in a contested proceeding).

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presiding ALJ, will conserve the Commission’s and the Parties’ time and resources.

Id. at 2.

Moreover, MarkWest and LMM request that the Commission rescind

and/or vacate the June 2011 Order and the August 2011 Order for several reasons. First,

they aver that the Orders are based on specific facts and circumstances that have changed.

They state that, as a result of Laser’s retraction of its statements regarding its intent to

offer service for the public (statements that provided support for the determinations in the

Commission’s Orders), the critical factual support for the Orders no longer exists.

Id. at 3. Second, MarkWest and LMM believe that the evidentiary record is incomplete

because the proceeding has been remanded for further development of the record and

because Laser’s contracts with producers were never entered into the record. They aver

that these circumstances support rescission of the Orders. Id. at 4.

Third, MarkWest and LMM submit that the legal effect of the Orders is

unclear. They state that, notwithstanding the Commission’s belief that the

June 2011 Order is not a final order within the meaning of Pa. R.A.P. 34113 and the

incomplete status of this proceeding which has been remanded, it is reasonable to expect

other applicants seeking certification as natural gas gathering public utilities to rely on

the Orders as controlling precedent. Id. at 4. Accordingly, MarkWest and LMM request

that the Commission expressly state that the June 2011 Order and the August 2011 Order

are not controlling precedent and should not be cited as controlling precedent in other

proceedings. Id. at 5. They also state that, if the Commission grants Laser’s Petition and

vacates and rescinds the prior Orders, and such Orders become final and non-appealable,

then they anticipate withdrawing their appeals currently before the Commonwealth

Court. Id. at 2.

13 Citing the Commission’s Order, entered July 15, 2011, at this Docket, which granted reconsideration of the June 2011 Order, pending further review of, and consideration on, the merits.

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In its Response to the Objections of PIOGA and the Joint Answer of

MarkWest and LMM, Laser avers that the June 2011 Order and the August 2011 Order

should not be rescinded for several reasons. Laser states that the prior decisions are not

precedent as the Commission is not bound by stare decisis, and the Commission has

made it clear that the decisions apply only to Laser and the facts presented in this case.

Additionally, Laser states that the prior Orders simply reflect the language in our Policy

Statement at 52 Pa. Code § 69.1401 (Guidelines for determining public utility status – statement of policy) and apply the existing law to a given set of facts. Laser states that the same process will be applied in all Commission cases. Laser’s Response at 5. Furthermore, Laser opines that PIOGA, MarkWest, and LMM cannot be harmed by our prior decisions because they have taken the position that their service is different from Laser’s and does not constitute “public utility” service. Id. at 5, 6.

In their October 13, 2011 Answer, MarkWest and LMM disagree with Laser’s statement that their reasons for requesting rescission are unfounded because Commission decisions are not precedential and the Commission is not bound by stare decisis. They remind Laser that it urged the Commission in this proceeding to approve its Application based on two other cases that Laser characterized as “precedential,” including the Application of Ardent Resources, Inc., Docket No. A-140005 (Order entered April 16, 2007). MarkWest and LMM’s October 13, 2011 Answer at 2.

2. Disposition

Withdrawal of pleadings, including applications, in a contested proceeding

are governed by Section 5.94 of our Regulations, 52 Pa. Code § 5.94. Section 5.94(a)

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provides the following:

(a) Except as provided in subsection (b), a party desiring to withdraw a pleading in a contested proceeding may file a petition for leave to withdraw the appropriate document with the Commission and serve it upon the other parties. The petition must set forth the reasons for the withdrawal. A party may object to the petition within 20 days of service. After considering the petition, an objection thereto and the public interest, the presiding officer or the Commission will determine whether the withdrawal will be permitted.

Based on our review of the applicable law, as well as the information provided by Laser

in its Petition and the responses thereto, we find that it is in the public interest to grant

Laser’s Petition.

We agree with MarkWest and LMM that approval of Laser’s Petition is

appropriate because Laser’s stated intention not to hold itself out as offering service “for

the public” disqualifies Laser’s natural gas gathering service from being “public utility”

service according to our June 2011 Order and August 2011 Order. We reached our

finding that Laser’s proposed service met the definition of “public utility service” under

the applicable law based on the specific facts regarding the service Laser proposed to

provide. These facts included Laser’s intention to serve any and all potential customers

needing to move gas through the pipeline system, its use of contracts that were not

intended to be exclusionary, and its commitment to expand its capacity, as needed, to

meet increased customer demand. June 2011 Order at 25, 26, 27. We stated that in the

absence of these facts, Laser’s proposed service would not qualify as public utility

service. Laser has now stated in its Petition that the service it plans to provide has

changed in the following manner:

it (1) is no longer willing to serve any and all potential customers; (2) will use contracts to select and serve a defined and limited group of customers; and, (3) is no longer committed to expand its facilities to meet demand of the public as would a public utility.

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Laser’s Petition at 2. We find that the information Laser provided in its Petition is

sufficient to grant a withdrawal of Laser’s Application, because it is clear from the new

information that Laser will no longer be providing “public utility” service under

Section 102 of the Code, 66 Pa. C.S. § 102, our Policy Statement at

52 Pa. Code § 69.1401 (Guidelines for determining public utility status – statement of policy),14 and the applicable law that we relied upon in our June 2011 Order and August 2011 Order. Moreover, because this proceeding is currently on

14 The Policy Statement provides the following:

(c) Fact based determination. The Commission will consider the status of a utility project or service based on the specific facts of the project or service and will take into consideration the following criteria in formulating its decision:

(1) The service being provided by the utility project is merely incidental to nonutility business with the customers which creates a nexus between the provider and customer.

(2) The facility is designed and constructed only to serve a specific group of individuals or entities, and others cannot feasibly be served without a significant revision to the project.

(3) The service is provided to a single customer or to a defined, privileged and limited group when the provider reserves its right to select its customers by contractual arrangement so that no one among the public outside of the selected group is privileged to demand service, and resale of the service is prohibited, except to that extent that a building or facility owner/operator that manages the internal distribution system serving the building or facility supplies electric power and related electric power services to occupants of the building or facility. See 66 Pa. C.S. §§ 102 and 2803 (relating to definitions).

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remand before the ALJ, our decision to grant the Petition will reduce the time and the expenses that the Parties and the Commission would have incurred in continuing to litigate this matter.15

Because we are granting Laser’s Petition, we agree with the Parties who filed responses to the Petition that it is necessary to address the impact that our decision will have on the June 2011 Order and the August 2011 Order. PIOGA, MarkWest, and LMM request that we rescind our prior Orders, while Laser asserts that our prior Orders should not be rescinded. Based on our review of the record and the applicable law, we do not believe it is appropriate in this case to rescind our prior Orders.

In 2010, in Pa. PUC v. T.W. Phillips Gas and Oil Co., Docket No.

R-2008-2013026 (Order entered April 16, 2010), we addressed the issue of rescission of

an interlocutory order in a case with a similar procedural and appellate history. In that

proceeding, in 2008, the Commission referred a dispute over purchased gas cost rates to

the Office of Administrative Law Judge for additional hearings. As occurred in this

proceeding, a party filed both a Petition for Reconsideration and a Petition for Review of

the interlocutory order with the Commonwealth Court. After the Commission granted

the Petition for Reconsideration, pending later disposition on the merits, the Petition for

Review was withdrawn. When the Commission subsequently denied the Petition for

Reconsideration, the same party filed a second Petition for Review of the Commission’s

interlocutory orders with the Commonwealth Court. Shortly thereafter, the parties to that

15 Because our prior Orders were not final decisions and this proceeding has been remanded, we find this case to be distinguishable from Kaufman, supra, and Phone Talk, supra, which PIOGA relies on in its Objections. Both Kaufman and Phone Talk involved requests to withdraw complaints in cases in which the evidentiary proceedings had been concluded and significant civil penalties against the Respondent had been recommended.

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case negotiated a settlement, withdrew the pending appeal, and requested that the remand

proceeding be discontinued and that the prior Commission orders be rescinded.

While the Commission granted the request to discontinue the remand

proceeding, it declined the request to rescind its prior orders. In reaching its decision, the

Commission rejected the parties’ argument that the non-rescinded orders would serve as

advisory opinions, which are disfavored under the law. Id. at 8.

Separately, we note that, while the determinations in the June 2011 Order and the August 2011 Order were specific to the interlocutory issues

presented to us, other statements in the Orders were of generally applicable legal

principles. These Orders did not adjudicate the merits of Laser’s application. The

Commission also granted Exceptions for the purpose of acknowledging prior

Commission and Commonwealth Court decisions that were relevant. For example, the

Commission acknowledged that it had the authority, under Section 502 of the Code, 66

Pa. C.S. § 502, to enforce its orders approving settlement provisions agreed to by the

parties as a condition for resolving a case, including cases involving certificates of public

convenience.16 The Commission also restated the legal principles that service to a limited

class of customers may constitute service “to or for the public”17 and that the

determination of public utility status is a fact specific inquiry.18 The Commission has the

full authority and the obligation to affirm its prior orders, correct the misapplication of 16 The Commission has, on numerous occasions, approved settlements of

cases involving certificates of public convenience that included provisions that required the public utility to make charitable donations to a non-profit entity, maintain a corporate presence in a specific city, or maintain a certain minimum level of employees for period of time. All of these actions are normally fully within the discretion of utility management, and not something the Commission could compel. The Commission has been monitoring and enforcing compliance with orders approving settlement provisions such as these for many years. See Statewide Sustainable Energy Board, Docket No. M-00031715 (Order entered August 12, 2003).

17 June 2011 Order at 25 (citing Waltman v. Pa. PUC, 596 A.2d 1221(Pa. Cmwlth. 1991); Rural Telephone Co. Coalition v. Pa. PUC, 941 A.2d 751, 760 (Pa. Cmwlth. 2008)).

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Commonwealth Court precedent, and provide guidance to the public regarding issues

within its jurisdiction for future adjudications. Rescinding the June 2011 and the August 2011 Orders would, in fact, foster regulatory uncertainty about the validity

of prior, long-standing Commission decisions.

Additionally, we conclude that rescission is no longer an appropriate option

for one other reason. There are two other cases involving applications for certificates of

public convenience for natural gas gathering and transportation service that are pending

before the Commission. In one, the presiding Administrative Law Judge has required the

parties, in a Prehearing Order, to address all the directed questions issued by the

Commission at this docket, including those attached to our June 2011 Order, and those

attached to the Secretarial Letter issued on August 25, 2011.19 The Applicant in that case

has already submitted its Direct Testimony, and public input hearings have already

occurred. It would be impractical and illogical for us to require the parties in that

proceeding to address the directed questions, but, at the same time, rescind the June 2011

and August 2011 Orders and, thereby, deprive the parties of the guidance provided in the

Orders.20 However, any final adjudication of the merits of those pending application

cases will be determined with reference to the specific facts adduced and legal arguments

made in each such case.

III. Conclusion

Based upon our review of the record in this proceeding, Laser’s Petition

18 June 2011 Order at 26 (citing 52 Pa. Code § 69.1401 (Guidelines for determining public utility status – statement of policy)).

19 Application of Peregrine Keystone Gas Pipeline, LLC, Docket No. A-2010-2200201 (Fourth Prehearing Order issued September 12, 2011).

20 We further note that a bill has recently been introduced in the General Assembly that would address the jurisdictional status of natural gas pipeline corporations that provide gathering services. See House Bill 1926 of 2011. The Commission stands ready to assist the General Assembly in its review of the Code provisions governing intrastate pipeline utilities, and will promptly implement any legislation signed into law.

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and the responses thereto, and the applicable law, we find that granting Laser’s Petition is

in the public interest. We shall, however, decline to rescind our June 2011 Order and

August 2011 Order, consistent with the foregoing discussion; THEREFORE,

IT IS ORDERED:

1. That the Petition to Withdraw Application for Approval to Begin to

Offer, Render, Furnish, or Supply Natural Gas Gathering and Transporting or Conveying

Service by Pipeline to the Public in Certain Townships of Susquehanna County,

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Pennsylvania, filed by Laser Northeast Gathering Company, LLC on September 8, 2011,

is granted.

2. That the requests of the Pennsylvania Independent Oil and Gas

Association, MarkWest Liberty Midstream & Resources, LLC, and Laurel Mountain

Midstream, LLC regarding rescission of the Opinion and Order, entered June 14, 2011,

and the Opinion and Order, entered August 25, 2011, at this Docket, are denied.

3. That Laser Northeast Gathering Company, LLC shall notify the

Commission in the future if it plans to hold itself out as offering service “for the public”

pursuant to Section 102 of the Code, the applicable case law which interprets Section 102 of the Code, and the Policy Statement at 52 Pa. Code § 69.1401.

4. That this proceeding shall be marked closed.

BY THE COMMISSION

Rosemary ChiavettaSecretary

(SEAL)

ORDER ADOPTED: November 10, 2011

ORDER ENTERED: December 5, 2011

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