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Unfair Trade Practice Claims Involving Utility Billing: PUC has Primary but Not Exclusive Jurisdiction

Utility customers who challenge billing practices under the Unfair Trade Practices and Consumer Protection Law (UTPCPL) must bring their challenge first to the Public Utility Commission (PUC), but may pursue their claim in civil court under the UTPCPL if the PUC concludes that the utility violated its tariff, the Commonwealth Court has ruled.

In Pettko v. Pennsylvania American Water Company, ___ A.3d ___ (Pa. Cmwlth. 2012) (No. 1061C.D. 2011 filed January 13, 2012) (Brobson, J.), plaintiffs filed a class action challenging Pennsylvania American Water Company’s distribution system improvement charge (DSIC) and state tax adjustment surcharge (STAS) billing procedures, together with the company’s alleged system of rounding individual charges up rather than down.  The trial court sustained the company’s preliminary objection, ruling that the PUC has primary jurisdiction over a utility’s method of calculating tariffed charges, and that, because the remedy in a successful challenge would be refunds which the PUC may order, the PUC had exclusive jurisdiction as well.  The Commonwealth Court affirmed the trial court’s decision as to primary jurisdiction, but held further that in the event the PUC were to conclude that the utility violated its tariff in rendering bills, plaintiffs would be able to pursue a UTPCPL claim in the trial court, not to be duplicative of any refunds ordered by the PUC, for additional damages including exemplary and treble damages, as provide for in the UTPCPL.

The plaintiffs in the case alleged that, although the PUC authorized periodic increases in DSIC and STAS charges, to be effective at the beginning of a particular calendar month, the company implemented those increases at the beginning of billing cycles that predated the effective date of the increase, and failed to pro-rate the charges for the billing cycle in which the increase began.  In addition, the plaintiffs alleged that the company rounded up every individual charge to the nearest cent, even though “accepted rules of arithmetic would dictate rounding down,” and that, although “individually small, the practice of rounding up to the next cent” when aggregated across individual customer bills and across bills rendered to all customers, “represents a considerable amount of money.”

The court affirmed the trial court’s transfer of the case to the PUC, rather than dismissal of the case without prejudice, because the PUC had primary jurisdiction over the general question of the propriety of the company’s billing practices.  In the event the PUC finds that the company violated its tariff, however, the plaintiffs may resume their suit under the UTPCPL in the court of common pleas.  As the court reasoned:  “[W]hile we agree that the PUC has primary jurisdiction over the general question of whether PAWC’s billing practices comport with the tariff, the refund action does not eliminate Pettko’s right to seek relief under the UTPCPL, because the PUC has no power to award relief, if it is appropriate for that claim.”  (Slip up at 20)

A copy of the decision is attached here.   pettko v pa american water.pdf 


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