It has been a long-standing cardinal rule in Pennsylvania that municipal authorities were beyond the regulatory reach of the Pennsylvania Public Utility Commission (“PUC”). The prevailing law in Pennsylvania was that municipal authorities were governed solely by the provisions of The Municipality Authorities Act, 53 Pa.C.S. §§ 5601- 5622, and that the PUC had no authority over their operations. It was understood that the PUC could not regulate the rates charged by municipal authorities, could not adjudicate customer complaints, could not regulate their service territories, and had no control over their operations. Under the Municipality Authorities Act, such regulation was reserved exclusively for the Courts of Common Pleas within the Commonwealth. See, e.g., 53 Pa.C.S. § 5607(d)(9) (“[t]he court of common pleas shall have exclusive jurisdiction to determine questions involving rates or service [of a municipal authority].”
In October 2024, however, the Pennsylvania Commonwealth Court created a crack in the once impenetrable wall between municipal authorities and the PUC when, in the case of Conyngham Twp. v. Pa. PUC, 325 A.3d 885 (Pa. Cmwlth. Ct. 2024), it held that the PUC has jurisdiction to approve the expansion of service of a municipal authority beyond the original borders of the municipality that formed it. The Supreme Court is now possibly poised to tear down the wall altogether.
The Conyngham Twp. case involved an appeal to the Commonwealth Court from a decision by the PUC addressing a Complaint by Conyngham Township (“Township”) against the Sanitary Sewer Authority of the Borough of Shickshinny (“Authority”) and whether the Authority required approval from the PUC to operate and provide service in the neighboring Conyngham Township. The Authority was originally formed in 1973 by Shickshinny Borough and began providing sanitary sewer services to the Township in 1992. After the Authority terminated its contract with the Township in 2021, the Township filed a complaint with the PUC over certain billing issues.
In its Complaint, the Township asserted that the Authority was “providing wastewater treatment and disposal services beyond its jurisdictional limits without a Commission-issued Certificate of Public Convenience.” Id. at 886. The PUC determined that it did not have jurisdiction over an issue involving the service territory of a municipal authority and therefore dismissed the Complaint. The Commonwealth Court, however, reversed the PUC’s decision and held that the PUC did have jurisdiction to consider fairly limited issues relating to the operation of municipal authority beyond its original municipal borders. Conyngham Twp., 325 A.3d at 891. The PUC thereafter sought review of the Commonwealth Court’s decision by the Pennsylvania Supreme Court.
On June 2, 2025, the Pennsylvania Supreme Court granted the PUC’s Petition for Allowance of Appeal (i.e. accepted the case for review). Most surprisingly, in its order granting the Petition, the Supreme Court “rephrased” the question it would be considering as follows:
Did the Commonwealth Court err when it held the Pennsylvania Public Utility Commission has jurisdiction over a municipal authority established under the Municipality Authorities Act, 53 Pa.C.S. §§ 5601, et seq.?
See Conyngham Twp. v. Pa. PUC, 2025 Pa. LEXIS 823 (June 2, 2025). Consideration of this open-ended question by the Supreme Court could dramatically alter the regulatory landscape under which municipal authorities have operated since the original enactment of the Municipal Authorities Act in 1935. Depending on the breadth of the Supreme Court’s decision, municipal authorities may be forced to upend decades of past business practices. Even the narrowest of decisions — merely affirming the Commonwealth Court’s holding — could result in a flood of applications to the PUC by municipal authorities seeking retroactive approval for their past expansions outside of their original municipal boundaries.
There is no timetable for when the Supreme Court will make a decision in the case.
