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Stillwater currently furnishes wastewater service to 512 full-time and 268 standby customers.   All of these customers, with the exception of the Complainant, are members of the Stillwater Lakes Civic Association, Inc. (Association). 

As a result of the Parties' November 4, 2002 settlement of a civil action that the Complainant brought in the Federal District Court for the Middle District of Pennsylvania, at Civil Action Docket No. 3:CV 99 0931, the Complainant is no longer a member of the Association.   As part of the settlement, Stillwater agreed to reconnect its wastewater service to the Complainant's property even though he is no longer a member of the Association.   The Complainant pays Stillwater its regular wastewater service charges.   As part of the civil action settlement, the Parties also agreed that the Complainant's payment of these charges would not deem him to be a member of the Association.  

On September 22, 2006, the property owner filed a Complaint with to the PUC claiming that Stillwater is providing illegal public utility service, because it does not hold a Certificate of Public Convenience (Certificate).   On November 16, 2006, Stillwater filed an Answer and New Matter declaring that it is: (1) an exempt provider of non-regulated sewer service to residents of a defined parcel of property located in Coolbaugh Township, Monroe County, Pennsylvania and (2) a wholly-owned subsidiary of the Association, a Pennsylvania planned community association consisting of residents of the Community parcel.

Stillwater further stated that the Community and the Association are congruent and that the property owner's solitary status is a result of litigation that the Parties settled in federal court.  

Stillwater submitted fourteen exhibits that were admitted into the record.   The hearing generated ninety-eight pages of testimony.   The record closed on February 10, 2007.   By Initial Decision issued on April 6, 2007, Administrative Law Judge (ALJ) John H. Corbett, Jr. denied the Complaint.   On April 24, 2007, the Complainant filed Exceptions to the Initial Decision.   Stillwater filed Reply Exceptions on May 3, 2007.

The PUC took the following actions:

  1. granted, in part, and denied, in part, the Complainant's Exceptions;
  2. reversed the Initial Decision of ALJ Corbett;
  3. afforded the Stillwater Lakes Civic Association, Inc. the opportunity to become a bona fide cooperative association and to inform the Commission's Secretary in writing of its intentions within ten days of the date of entry of the Tentative Opinion and Order;
  4. informed the Stillwater Lakes Civic Association that, if it chooses to become a bona fide cooperative association, it shall provide written notification of its amended structure and its contract with the Stillwater Sewer Corporation, or other entity, to provide wastewater service only to the Association's members to the Commission's Secretary and its Law Bureau;
  5. informed the Stillwater Lakes Civic Association that, if it chooses not to become a bona fide cooperative association, the Tentative Opinion and Order shall become final on the thirtieth day after its entry and that Stillwater shall be required to apply for a Certificate of Authority/Convenience within thirty days thereafter;
  6. directed the Commission's Bureau of Fixed Utility Services to monitor the Stillwater Lakes Civic Association's and the Stillwater Sewer Corporation's response to the Tentative Opinion and Order and to determine whether any further action is necessary; and
  7. directed that the proceeding be transferred by the Secretary to the Bureau of Fixed Utility Services upon entry of the Tentative Opinion and Order.   Tentative Opinion and Order at 9-10.         

 Petition to Reopen                       

In the initial part of its Petition, Stillwater requests that the Commission reopen this proceeding.   Stillwater references the Tentative Opinion and Order, as follows:

[Stillwater] made reference to a bona fide cooperative in its Answer and New Matter but did not demonstrate that it qualified as one, especially that control and ownership are substantially equal among members and that economic benefits are passed to each member substantially equally.

In Adrian Water , the Commission held that the pivotal question, when analyzing the five factors above, is whether, in the absence of regulations or other protections of the Commission, the customers or members of the group can exercise a degree of control over the organization to protect themselves from arbitrary and unreasonable management decisions.   No such evidence exists on this record that would allow such a determination.

Additionally, the Commission further stated as follows:

The record in the instant matter is devoid of evidence which would allow the Commission to conclude that the [Stillwater Lakes Civic] Association is a bona fide cooperative association and that its subsidiary, Stillwater [Sewer], is providing service under the second Adrian Water criterion.   Instead, Stillwater appears to be operating as a de facto public utility whose service must be certificated.

Stillwater argues that, if the record were to be reopened, it would be able to establish on the record evidence to meet each of the perceived deficiencies as outlined in the Tentative Opinion and Order.   As a result, the Commission would then be able to determine that Stillwater Lakes Civic Association qualifies as an exempt bona fide cooperative association under Adrian Water .    

Section 5.571 of our Rules of Administrative Practice, 52 Pa. Code § 5.571, sets forth the criteria that must be met so as to warrant the reopening of the record.   Section 5.571 provides as follows:  

§ 5.571.   Reopening prior to a final decision

(a)  At any time after the record is closed but before a final decision is issued, a participant may file a petition to reopen the proceeding for the purpose of taking additional evidence.

(b) A petition to reopen shall set forth clearly the facts claimed to constitute grounds requiring the reopening of the proceeding, including material changes of fact or of law alleged to have occurred since the conclusion of the hearing .

(c) Within 10 days following the service of the petition, another participant may file an answer thereto.

  • The record may be reopened upon notification to the parties in a proceeding for the reception of further evidence if there is reason to believe that conditions of fact or of law have so changed as to require, or that the public interest requires, the reopening of the proceeding.
  1. The presiding officer may reopen the record if the presiding officer has not issued a decision or has not certified the record to the Commission.
  2. The Commission may reopen the record after the presiding officer has issued a decision or certified the record to the Commission.  

52 Pa. Code § 5.571 (emphasis added).

     On review of Stillwater's Petition, and the evidentiary record herein, we conclude that the Petition is meritorious and that the record herein should be reopened for the reception of further evidence, per Section 5.571(d), supra .   We reach this conclusion because we believe that the public interest requires that we afford Stillwater Sewer the opportunity to demonstrate that Stillwater Lakes Civic Association, the parent of Stillwater Sewer, as a Pennsylvania planned community association, qualifies as an exempt bona fide cooperative association under Adrian Water .   The grant of the instant Petition furthermore allows Stillwater more time to explore its options with regard to its future corporate structure.  

Petition to Stay Final Order

    Ordering Paragraph 5 of the Tentative Opinion and Order is as follows:

5.  That if the Stillwater Lakes Civic Association, Inc., chooses not to become a bona fide cooperative association, this Tentative Opinion and Order shall become final on the thirtieth (30 th ) day after its entry, and Stillwater shall be required to apply for a certificate of public convenience within thirty (30) days thereafter.

Tentative Opinion and Order at 10.

    Stillwater avers that the Board of Stillwater Civic Association (Board) informed the Commission of its intention to pursue the option of converting to a cooperative within ten days of entry of the Tentative Opinion and Order.   Petition at ¶ 19.   Stillwater Civic Association avers that it has not yet brought the question of conversion to it members for vote.   Petition ¶ 20.   As such, argues Stillwater, since it has not yet chosen “not to become a bona fide cooperative association yet,” the Commission's Order is still Tentative in nature.   Petition ¶ 21.   Stillwater avers that, if the Commission grants its Petition to Reopen, then the Commission should also stay the finality of its Tentative Opinion and Order, pending further hearing on this matter.  

                        We agree with Stillwater on this point and we will direct that the Tentative Opinion and Order be held in abeyance, pending further hearing on this matter.   We take that action to avoid confusion on the issue of the Commission's continued jurisdiction over this matter and so that Stillwater need not file a protective appeal within thirty days of the expiration of the 120 day period contemplated by the Tentative Opinion and Order.   Tentative Opinion and Order, Ordering Paragraph 4, at 9‑10.

  At the same time, we note that Stillwater has not moved as expeditiously as possible toward the resolution of the pertinent issue.   According to Stillwater's Petition, a vote on conversion was to be brought before the Board at a meeting scheduled for June 21, 2008.   Petition at ¶ 22.   On inquiry from Staff, it was ascertained that that meeting was cancelled.   No reason was given for the cancellation.  

   Accordingly, Stillwater's Petition to Stay Final Order will be granted.   However, we will direct that the reopened matter be processed as expeditiously as possible in the Office of Administrative Law Judge (OALJ).   We take that action so that the issue of Stillwater's future corporate structure can be soon settled.

Petition to Extend Time

Finally, Stillwater requested that, if its Petition to Reopen were denied, it be afforded more time to complete its conversion to a cooperative association than the 120‑day period contemplated in the Tentative Opinion and Order.   Petition ¶ 27.   Since we have decided to reopen the instant record for the reasons outlined above, Stillwater's Petition to Extend Time is moot.

Accordingly, consistent with the above discussion, we will: (1) grant Stillwater's Petition to Reopen Record; (2) grant Stillwater's Petition to Stay Final Order; (3) deny Stillwater's Petition to Extend Time as moot; (4) direct that the Tentative Opinion and Order herein be held in abeyance; and (5) remand this matter to the OALJ to conduct such further expedited proceedings as deemed appropriate; THEREFORE,

   IT IS ORDERED:

  1.  That the Petition to Reopen the Proceeding, which was filed by Stillwater Sewer Corporation, on June 18, 2008, is granted.
  2. That the Petition to Stay Final Order, which was filed by Stillwater Sewer Corporation, is granted.
  3. That the Petition to Extend Time, which was filed by Stillwater Sewer Corporation, is denied as moot.
  4. That the Commission's Tentative Opinion and Order entered January 28, 2008, herein is held in abeyance.
  5. That this proceeding is assigned to the Office of Administrative Law Judge to conduct such further expedited proceedings as deemed appropriate.  

                                                                                    BY THE COMMISSION,

                                                                                    James J. McNulty

                                                                                    Secretary

Document Name Meeting Date Docket Number Document Type Utility
Answer to Petition-Collazo - STILLWATER SEWER CORP.   C-20066892 Answer to Petition Wastewater
ANSWER TO REPLY - STILLWATER SEWER CORP.   C-20066892 Case Related Document Wastewater
Case Related Document - STILLWATER SEWER CORP.   C-20066892 Case Related Document Wastewater
Case Related Document - STILLWATER SEWER CORP.   C-20066892 Case Related Document Wastewater
COLLAZO RESPONSE TO LTR - STILLWATER SEWER CORP.   C-20066892 Case Related Document Wastewater
CONCERNED CUST OF STILLWATER FLD PET - STILLWATER SEWER CORP.   C-20066892 Case Related Document Wastewater
Document attached to disk filed - STILLWATER SEWER CORP.   C-20066892 Case Related Document Wastewater
LETTER FROM COLLAZO REGARDING COMMENTS MADE - STILLWATER SEWER CORP.   C-20066892 Case Related Document Wastewater
Opinion & Order - 1201895-OSA-0007 - 12-18-08 - Collazo v. Stillwater Pet. to Reopen - STILLWATER SEWER CORP. 12/18/2008 C-20066892 Order Wastewater
Petition for Extension of Time-Stillwater - STILLWATER SEWER CORP.   C-20066892 Petition for Extension of Time Wastewater
Petition-Stillwater - STILLWATER SEWER CORP.   C-20066892 Petition Wastewater
R Collazo ltr re req for extension - STILLWATER SEWER CORP.   C-20066892 Case Related Document Wastewater
RESPOND LTR ACKNOW RECPT OF LTR FM COMPLNT - STILLWATER SEWER CORP.   C-20066892 Case Related Document Wastewater
Respondents reply to complainant - STILLWATER SEWER CORP.   C-20066892 Case Related Document Wastewater
RESPONSE TO LETTER - STILLWATER SEWER CORP.   C-20066892 Case Related Document Wastewater
Reuben Collazo v Stillwater Sewer - STILLWATER SEWER CORP. 11/29/2007 C-20066892 Order Wastewater
WITHRAWAL REQUEST OF THE SEWER CORP - STILLWATER SEWER CORP.   C-20066892 Withdrawal Request Wastewater

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