This recent decision out of the Commonwealth Court dealt with the reasonableness of sewer rates charged to property owners with extraordinarily high water usage. The court found that where sewer bills are tied exclusively to metered water use, property owners can challenge higher sewer bills by showing the increased water usage is not reaching the sewer system.
GSP Management Co. (“GSP”) operated the Lehigh Terrace Mobile Home Park (“Lehigh Terrace”). Lehigh Terrace was connected to water and sewer service provided by the Duncansville Municipal Authority (the “Authority”). While the Authority metered water going into Lehigh Terrace, it did not meter wastewater discharged into its sewer system. Instead, sewer rates were based on water meter readings. Water bills for Lehigh Terrace typically ranged from $750 to $1,250 throughout the year. On several occasions during 2009 and 2011 Lehigh Terrace experienced significant leaks in its internal water distribution system that resulted in water usage that was two to ten times above its highest typical month. During these months the Authority charged Lehigh Terrace a corresponding amount for sewer usage, despite the fact that the excess water was leaking into the ground rather than the sewer system.
GSP filed a declaratory judgment action against the Authority, claiming the rate system violated § 5607(d)(9) of the Municipality Authorities Act (Act) requiring municipal authorities apply “reasonable and uniform rates” for services. It argued the rate system was unreasonable on its face and as applied. The Court of Common Pleas of Blair County concluded the Authority’s rate structure was facially valid and that GSP had failed to demonstrate that the Authority had abused its discretion or imposed an arbitrary rate system in this particular scenario. GSP appealed.
On appeal the Commonwealth Court affirmed the trial court’s rejection of the facial challenge, but reversed its rejection of the as applied challenge. It held that basing sewer rates on metered water usage was a valid way to set sewer rates. However, where such a system is used, the customer must be able to challenge sewer bills by establishing that a substantial part of the metered water did not reach the sewage system. Where there is an extraordinary water loss between the point of metering and point of discharge that is substantial in quantity and unplanned or unanticipated, relief is warranted to ensure the bills are not unreasonable.
Click here to read: GSP Mgmt. Co. v. Duncansville Mun. Auth., 40 CD 2015 (Pa. Cmmw. Ct. Oct. 19, 2015).