Pennsylvania Public Utility Commission Issues Proposed Rulemaking Order to Revise Evidentiary Criteria for Household Goods in Use Carrier Applicants

On September 12, 2013, The Pennsylvania Public Utility Commission (“Commission”) issued a Proposed Rulemaking Order by which it is recommending revisions to the evidentiary criteria applicable to household goods in use (moving companies) Applicants when they seek authorization to provide service in Pennsylvania.  The revisions recommended by the Commission would ease entry barriers for new Applicants, thereby promoting and encouraging increased competition within Pennsylvania.  It is the Commission’s expectation that increased competition will lead to better prices and enhanced service quality and reliability for Pennsylvania consumers.  

 The current evidentiary criteria for motor common carrier applications, including household goods in use, is set forth in the Commission’s Policy Statement at 52 Pa. Code §41.14.   An Applicant must now demonstrate that approval of its application will serve a useful public purpose, responsive to a public demand or need (need evidence).  52 Pa. Code §41.14(a).  In addition, the Applicant must show that is has the technical and financial ability to provide the proposed service.  52 Pa. Code §41.14(b).  Approval may be withheld if the record shows that the Applicant lacks a propensity to operate safely and legally.  52 Pa. Code §41.14(b).  The Commission also may withhold approval if it is established that entry of a new carrier would impair the operations of existing carriers to such an extent as to be contrary to the public interest.   52 Pa. Code §41.14(c).

 In its Proposed Rulemaking Order, the Commission is recommending several changes that would make it easier for new Applicants seeking household goods in use authority to obtain Commission approval.  The most significant recommendation is the elimination of the requirement that the Applicant show that approval will serve a useful public purpose, responsive to a public demand or need.  

 The Commission noted:

Rather than determining public need by means of an administrative process, competition among these carriers in regard to price, quality and reliability as well as experienced demand for their services by consumers who may freely choose among those competing carriers, will determine whether a given carrier’s service is needed by the public.

Order, at p. 3.

 Further, the Commission would no longer consider the impact a new carrier would have on the operations of existing carriers.  It noted, “[i]n a competitive market with low barriers, the Commission finds no reason to continue to protect, by an administrative process, carriers whose services are no longer demanded by consumers who have chosen other carriers.  Order, at p. 3.

 Additional revisions the Commission is recommending as necessary offshoots of the above-noted changes include:

1. Elimination of the requirement that carriers with gross intrastate operating revenues of under $200,000 seeking a rate increase provide substantiating financial data, so long as they have operating ratios of no less than 93%;
2. Elimination of jurisdictional territorial restrictions. Newly approved Applicants would receive statewide authority, unless they desire a limitation. Existing carriers would also be deemed to have statewide authority, again unless they desire otherwise;
3. The regulations providing for Emergency Temporary Authority (“ETA”) and Temporary Authority (“TA”) would no longer apply to household goods in use carriers; and
4. An increase in the minimum liability insurance coverage for carriers operating commercial motor vehicles weighing over 10,000 pounds from $300,000 to $750,000.

 The Commission emphasized:

Applicants will continue to be required to demonstrate their technical and financial fitness to provide the proposed service, including adequate training and experience, capitalization and insurance coverage.  Moreover, we intend to remain vigilant as to consumer protection and will not hesitate to bring enforcement actions against carriers that fail to maintain proper levels of insurance, fail to operate safely or lawfully, fail to be transparent in their prices and contract terms with consumers, fail to adequately protect consumers’ household goods in transit, or otherwise fail to meet their fundamental duty to provide safe, reasonable, and adequate service to the public.

Order, at pp. 7-8.

There will be a 30-day public comment period from the date the Order is published in the Pennsylvania Bulletin.  The Order has not been published as of the date of this article.

Link to Order: http://www.puc.state.pa.us/pcdocs/1246381.docx