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ATTORNEYS AT LAW
Four Penn Center, 13th Floor 1600 John F. Kennedy Blvd. Philadelphia, PA 19103-2808 215-587-1000 Main 215-587-1444 Main Fax www.postschell.com
David B. MacGregor
[email protected] 215-587-1197 Direct 215-320-4879 Direct Fax File #: 170401
November 16, 2018
VIA ELECTRONIC FILING (NON-PROPRIETARY VERSION)VIA HAND DELIVERY (PROPRIETARY VERSION)
Rosemary Chiavetta, Secretary Pennsylvania Public Utility Commission Commonwealth Keystone Building 400 North Street, 2nd Floor North P.O.Box 3265 Harrisburg, PA 17105-3265
Re: Pennsylvania Public Utility Commission, Bureau of Investigation and Enforcementv. UGI Utilities, Inc., Docket No. C-2018-3005151
Dear Secretary Chiavetta:
Enclosed for filing, please find the Non-Proprietary version of the Answer of UGI Utilities, Inc. (“UGI” or the “Company”) to the October 4, 2018 Formal Complaint of the Bureau of Investigation and Enforcement (“I&E). The original Proprietary Version of UGI’s Answer will be filed with the Pennsylvania Public Utility Commission (“Commission”) by hand.
REQUEST FOR CONFIDENTIAL TREATMENT OF PROPRIETY INFORMATION
UGI is filing a Proprietary Version of its Answer because the information and averments contained therein in relate to an ongoing National Transportation Safety Board (“NTSB”) investigation. NTSB regulations prohibit UGI, as a party to the NTSB investigation, from disseminating information except for the limited purposes of supporting the NTSB investigation. Specifically, NTSB regulations prohibit Parties from releasing “[information related to the accident,” “[a]ny information collected or compiled by the NTSB as part of its investigation, such as photographs, visual representations of factual data, physical evidence from the scene of the accident, interview statements, wreckage documentation...;” and “[a]ny information regarding the status of an investigation, or activities conducted as part of the investigation.” 49 C.F.R. § 831.13(a)(1), (c). “Parties are prohibited from releasing information obtained during an investigation at any time prior to the NTSB’s public release of information....” Id. The regulations further provide that “[a]ny dissemination of factual information by a party may be
Allentown Harrisburg Lancaster Philadelphia Pittsburgh Princeton Washington, D.C.
A Pennsylvania Professional Corporation
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Rosemary Chiavetta, Secretary November 16, 2018 Page 2
made only as provided in this section.” Id. § 831.13(c)(2). The NTSB even goes so far as to prohibit Parties from disseminating information within the Parties’ organizations, unless the dissemination is to individuals within the organization “who have a need to know for the purpose addressing a safety issue including preventative or remedial actions.” Id. § 831.13(c)(3). “Any other release of factual information related to the investigation must be approved by the IIC prior to release....” Id. § 831.13(c)(4).
Pursuant to the NTSB’s regulations, UGI received permission from the NTSB to file a Proprietary Version of its Answer to I&E’s Formal Complaint under seal. The Proprietary Version of UGI’s Answer is contained in a sealed envelope which also has been stamped “CONFIDENTIAL.”
UGI requests that the Proprietary Version of its Answer that has been labeled “CONFIDENTIAL” and that is contained in the envelope that has been stamped “CONFIDENTIAL” be given confidential treatment by the Commission, including its various offices and bureaus. That is, UGI requests that the confidential materials be excluded from the Commission’s public document folder and that the confidential copies not be disclosed to the public.
UGI further notes that, to the extent that the NTSB concludes its investigation during the course of this proceeding, UGI will consider and work with the parties and the Commission to provide an updated version of its Answer with the proprietary designations and redactions removed.
If there are any questions concerning this matter, please contact me at the addresses or telephone numbers provided above. Copies of UGI’s Answer will be provided in accordance with the attached certificate of service
Respectfully submitted,
DB M/dam Enclosures
cc: Certificate of Service
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CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing has been served upon the following persons, in the manner indicated, in accordance with the requirements of 52 Pa. Code § 1.54 (relating to service by a participant).
NON-PROPRIETARY VERSION VIA E-MAIL & HAND DELIVERY
PROPRIETARY VERSION VIA HAND DELIVERY
Stephanie M. Wimer, Senior Prosecutor Michael L. Swindler, Deputy Chief Prosecutor Timothy K. McHugh, Prosecutor Bureau of Investigation and Enforcement Commonwealth Keystone Building 400 North Street, 2nd Floor West PO Box 3265Harrisburg, PA 17105-3265
Date: November 16, 2018
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BEFORE THEPENNSYLVANIA PUBLIC UTILITY COMMISSION
Pennsylvania Public Utility Commission, Bureau of Investigation and Enforcement,
Complainant,
Docket No. C-2018-3005151
v.
UGI Utilities, Inc.,
Respondent.
NOTICE TO PLEAD
YOU ARE HEREBY ADVISED THAT, PURSUANT TO 52 PA. CODE § 5.63, YOU MAY FILE A REPLY TO THE ENCLOSED NEW MATTER WITHIN TWENTY (20) DAYS AFTER THE DATE OF SERVICE. YOUR REPLY SHOULD BE FILED WITH THE SECRETARY OF THE PENNSYLVANIA PUBLIC UTILITY COMMISSION, P.O. BOX 3265, HARRISBURG, PA 17105-3265. A COPY OF YOUR REPLY SHOULD ALSO BE SERVED ON THE UNDERSIGNED COUNSEL.
Kent D. Murphy (ID # 44793) UGI Utilities, Inc.460 North Gulph Road King of Prussia, PA 19406 Phone:610-768-3628 Fax: 610-992-3203 E-mail: [email protected]
Date: November 16, 2018
Respectfully submitted,
)avid B. McGregor iPost & Schell, P.C.Four Penn Center 1600 John F. Kennedy Boulevard Philadelphia, PA 19103-2808Phone:215-587-1197 Fax: 215-320-4879 E-mail:[email protected]
Garrett P. Lent (ID # 321566)Post & Schell, P.C.17 North Second Street, 12th Floor Harrisburg, PA 17101-1601 Phone: 717-612-6032 E-mail:[email protected]
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Counsel for UGI Utilities, Inc.
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BEFORE THEPENNSYLVANIA PUBLIC UTILITY COMMISSION
PUBLIC VERSION - CONFIDENTIAL, PROPRIETARY INFORMATION REDACTED
Pennsylvania Public Utility Commission, Bureau of Investigation and Enforcement,
Complainant,
Docket No. C-2018-3005151
v.
UGI Utilities, Inc.,
Respondent.
ANSWER OF UGI UTILITIES, INC. TO THE FORMAL COMPLAINT OF THE BUREAU OF INVESTIGATION AND ENFORCEMENT
UGI Utilities, Inc. (“UGI”) hereby answers the Formal Complaint (“Complaint”) filed by
the Pennsylvania Public Utility Commission (“Commission”), Bureau of Investigation and
Enforcement (“I&E”) before the Commission on October 4, 2018. UGI denies the allegations in
the Complaint except as specifically and unequivocally admitted herein and denies all titles,
headings, footnotes, subheadings, and any other material not contained in numbered paragraphs.
UGI denies that it committed any violations of the Pennsylvania Code and Code of Federal
Regulations in connection with the July 2, 2017 natural gas explosion that occurred in the
Springdale Farms residential development in Millersville, Lancaster County, Pennsylvania.
I. COMMISSION JURISDICTION AND AUTHORITY
1. Admitted in part. The mailing address of the Commission is admitted. The
remainder of Paragraph 1 of the Formal Complaint contains a legal conclusion to which no
response is required. To the extent a response is required, UGI admits that the Commission is
authorized to regulate Pennsylvania public utilities pursuant to the authority granted to it by the
Public Utility Code.
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2. Admitted in part. The identity of the Complainant is admitted. The remainder of
Paragraph 2 of the Formal Complaint contains a legal conclusion to which no response is
required. To the extent a response is required, UGI admits that I&E is authorized to initiate
enforcement actions against Pennsylvania public utilities pursuant to the Public Utility Code.
3. Paragraph 3 of the Formal Complaint pertains to the Complainant’s legal
representation, to which no responsive pleading is required.
4. Admitted.
5. Paragraph 5 of the Formal Complaint contains, a legal conclusion to which no
response is required. To the extent a response is required, UGI admits that it is a “public utility”
and “natural gas distribution company” as defined in Sections 102 and 2202 of the Code. 66 Pa.
C.S. §§ 102 and 2202.
6. Paragraph 6 of the Formal Complaint contains a legal conclusion to which no
response is required. To the extent a response is required, UGI denies any factual averments
contained Paragraph 6,
7. Paragraph 7 of the Formal Complaint contains a legal conclusion to which no
response is required. To the extent a response is required, UGI denies any factual averments
contained in Paragraph 7.
8. Paragraph 8 of the Formal Complaint contains a legal conclusion to which no
response is required. To the extent a response is required, UGI denies any factual averments
contained in Paragraph 8.
9. Paragraph 9 of the Formal Complaint contains a legal conclusion to which no
response is required. To the extent a response is required, UGI denies any factual averments
contained in Paragraph 9.
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10. Paragraph 10 of the Formal Complaint contains legal conclusions to which no
response is required. To the extent a response is required, UGI denies Paragraph 10. By way of
further response, it is denied that UGI has violated any safety standards applicable to natural gas
public utilities in Pennsylvania.
11. Paragraph 11 of the Formal Complaint contains a legal conclusion to which no
response is required. To the extent a response is required, UGI admits Paragraph 11.
12. Paragraph 12 of the Formal Complaint contains a legal conclusion to which no
response is required. To the extent a response is required, UGI denies any factual averments
contained in Paragraph 12.
II. BACKGROUND
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[END PROPRIETARY INFORMATION]
III. VIOLATIONS
Counts 1 -11
68. The first sentence of Paragraph 68 re-alleges and reincorporates by reference
preceding allegations and requires no response beyond those made by UGI in response to the
preceding allegations. The remainder of Paragraph 68 sets forth conclusions of law to which no
response is required. To the extent a response is required, UGI denies the allegations.
Count 12
69. The first sentence of Paragraph 69 re-alleges and reincorporates by reference
preceding allegations and requires no response. The remaining allegations contained in
Paragraph 69 sets forth conclusions of law to which no response is required. To the extent a
response is required, UGI denies the allegations.
Counts 13-18
70. The first sentence of Paragraph 70 re-alleges and reincorporates by reference
preceding allegations and requires no response. The remaining allegations contained in
Paragraph 70 set forth conclusions of law to which no response is required. To the extent a
response is required, UGI denies the allegations.
Count 19
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71. The first sentence of Paragraph 71 re-alleges and reincorporates by reference
preceding allegations and requires no response. The remaining allegations contained in
Paragraph 71 sets forth conclusions of law to which no response is required. To the extent a
response is required, UGI denies the allegations.
IV. REQUESTED RELIEF
72. Paragraph 72 consists of the Commission’s request for relief, which does not
require a response. To the extent a response is required, UGI denies that I&E is entitled to any
of the relief sought, or any other relief.
73. Paragraph 73 consists of the Commission’s request for relief, which does not
require a response. To the extent a response is required, UGI denies that I&E is entitled to any
of the relief sought, or any other relief.
74. Paragraph 74 consists of the Commission’s request for relief, which does not
require a response. To the extent a response is required, UGI denies that I&E is entitled to any
of the relief sought, or any other relief.
VII. NEW MATTER
1. I&E’s Complaint does not allege that UGI has violated any specific part or
subpart of 49 C.F.R. §§ 191.5, 192.13(c), 192.605(a) and 192.615 or 52 Pa. Code § 59.33(b).
Rather than identify specific violations of PHMSA’s and the Commission’s pipeline safety
regulations, the Formal Complaint attempts to require UGI to take actions, and/or maintain and
follow written plans and procedures that either are not specified in or are inconsistent with the
applicable regulations.
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2. By attempting to require UGI to take actions and/or modify its written plans and
procedures, I&E appears to be utilizing a complaint proceeding to modify and/or revise the
minimum pipeline safety standards set forth in PHMSA’s regulations, which have been adopted
by this Commission. Allowing I&E to pursue a complaint predicated on requirements that
are not explicitly set forth in PHMSA’s and the Commission’s regulations, would constitute
improper rulemaking. It also raises issues of fundamental fairness and creates significant
compliance uncertainty for gas distribution operators throughout Pennsylvania, who are not
parties to this Formal Complaint Proceeding.
3. To the extent that I&E and/or Commission believes that obligations in
addition to those explicitly set forth in PHMSA’s and the Commission’s regulations should
be applied to pipeline operators as minimum safety standards, UGI submits that such
requirements can only be considered in the course of a notice-and-comment rulemaking
proceeding, consistent with PHMSA’s and the Commission’s regulations. It is a
fundamental principle of administrative law that a federal or state agency must follow
appropriate rulemaking procedures that include notice and opportunity for public comment
when creating new compliance obligations.
4. Specifically, non-statutory mandatory requirements may only be imposed by
the Commission pursuant to regulations promulgated under the Commonwealth Documents
Law, 45 Pa. C.S. §§ 1201 et al., and Pennsylvania’s regulations governing the procedure for
adopting and revising regulations, 1 Pa. Code §§ 7.1 et al. A Pennsylvania agency cannot
create and apply new regulations or regulatory interpretations in the context of an
enforcement proceeding. See, e.g., Borough of Pottsowr v. Pa. Municipal Retirement Bd.,
551 Pa. 605, 609-10, 712 A.2d 741, 743 (Pa. 1998) (“Where an agency, acting pursuant to
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delegated legislative authority, seeks to establish a substantive rule creating a controlling
standard of conduct, it must comply with the provisions of the Commonwealth Documents
Law.”). Similarly, PHMSA may only adopt new minimum pipeline safety regulations
pursuant to the notice and comment procedures set forth in 49 C.F.R. Part 190, Subpart D.
49 C.F.R. §§ 190.301-190.343. I&E’s attempt to create and apply new regulations or
regulatory interpretations in the context of this enforcement proceeding is inconsistent with
this fundamental principles.
5. For these reasons, UGI submits that the Formal Complaint is an improper
attempt to create and apply new regulations or regulatory interpretations, which would
create new controlling standards of conduct for Pennsylvania pipeline operators that do not
currently exist under PHMSA’s or the Commission’s regulations.
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V. CONCLUSION
WHEREFORE, for all the foregoing reasons, UGI Utilities, Inc. requests that
Pennsylvania Public Utility Commission deny the October 4, 2018 Formal Complaint filed by
the Bureau of Investigation and Enforcement.
Kent D. Murphy (ID # 44793) UGI Utilities, Inc.460 North Gulph RoadKing of Prussia, PA 19406Phone:610-768-3628Phone:610-992-3203E-mail: [email protected]
1600 John F. Kennedy BoulevardPhiladelphia, PA 19103-2808Phone:215-587-1197Fax: 215-320-4879E-mail :[email protected]
Garrett P. Lent (ID #321566)Post & Schell, P.C.17 North Second Street, 12th Floor Harrisburg, PA 17101-1601 Phone:717-612-6032 Fax: 717-731-1985 E-mail:[email protected]
Date: November 16, 2018 Counsel for UGI Utilities, Inc.
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