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									                               PENNSYLVANIA
                         PUBLIC UTILITY COMMISSION
                            Harrisburg, PA 17105-3265


                                                      Public Meeting held April 26, 2012


Commissioners Present:

     Robert F. Powelson, Chairman
     John F. Coleman, Jr., Vice Chairman
     Wayne E. Gardner
     James H. Cawley
     Pamela A. Witmer


Application of Pentex Pipeline Company                                 A-2011-2230314
For Approval to Amend its Existing
Certificate of Public Convenience to Begin
To Offer, Render, Furnish, or Supply Natural
Gas Gathering or Conveying Services by
Pipeline to its Existing Customer and to the
Public in the Borough of Wyalusing and in the
Townships of Wyalusing, Herrick, Terry,
Tuscarora, Stevens and Wilmot in Bradford
County, Pennsylvania


                                OPINION AND ORDER

BY THE COMMISSION:

             Before the Pennsylvania Public Utility Commission (Commission) for
consideration and disposition are the Exceptions of Diane V. Ward, filed on February 25,
2012, to the Initial Decision (I.D.) of Administrative Law Judge (ALJ) Dennis J.
Buckley, issued February 9, 2012. Pentex Pipeline Company (Pentex) filed Replies to
Exceptions on March 12, 2012.
                                  History of the Proceeding


               On March 8, 2011, Pentex filed an Application for approval to amend its
certificate of public convenience to add natural gas gathering services to the services that
it provides for an existing transportation customer, Cargill Meat Solutions Corporation,
and for local natural gas producers in Wyalusing, Herrick, Terry, Tuscarora, Stevens, and
Wilmot Townships in Bradford County, Pennsylvania. Notice of the Application was
published in the Pennsylvania Bulletin on March 26, 2011, at 41 Pa. B. 1739.


               On April 5, 2011, Diane V. Ward filed a Protest to the Application. On
April 6, 2011, Trudy Gerlach and Joseph Shervinski each filed a Protest to the
Application.


               On April 8, 2011, the Pennsylvania Office of Consumer Advocate (OCA)
filed a Notice of Intervention.


               On April 11, 2011, Laurel Mountain Midstream, LLC (Laurel Mountain),
and MarkWest Liberty Midstream & Resources, LLC (MarkWest) filed Protests.


               On April 25, 2011, Pentex filed an Answer to the Protest of Ms. Ward and
asked that her Protest be dismissed. On April 26, 2011, Pentex filed Answers to the
Protests of Ms. Gerlach and Mr. Shervinski, as well as Preliminary Objections moving
for the dismissal of the Protests of Ms. Gerlach and Mr. Shervinski on the basis of lack of
standing of the Protestants.


               On April 29, 2011, Pentex filed Preliminary Objections moving for the
dismissal of the Protests of Laurel Mountain and MarkWest. On May 2, 2011, Pentex
filed Answers to the Protests of Laurel Mountain and MarkWest.



                                             2
              On May 9, 2011, Laurel Mountain and MarkWest filed Answers to the
Preliminary Objections of Pentex. On May 13, 2011, Ms. Gerlach filed an Answer to the
Preliminary Objections of Pentex.


              On May 18, 2011, the Honorable Tina Pickett, Representative for the 110th
Legislative District, filed a letter with the Commission asking that a public input hearing
be scheduled in Bradford County, Pennsylvania.


              On May 25, 2011, ALJ Buckley issued an Order dismissing the Preliminary
Objections relative to the Protests of Ms. Gerlach and Mr. Shervinski.1 On May 27,
2011, the ALJ issued an Order dismissing the Preliminary Objections relative to Laurel
Mountain and MarkWest.


              On June 6, 2011, the Office of Administrative Law Judge (OALJ) issued a
Notice scheduling the initial prehearing conference for July 6, 2011. On June 8, 2011,
the ALJ issued a Prehearing Order addressing procedural issues.


              On June 21, 2011, the Commission’s Office of Trial Staff2 filed a Notice of
Appearance. BIE filed a Petition to Intervene on June 29, 2011.


              A prehearing conference was held as scheduled on July 6, 2011. On
July 12, 2011, the ALJ issued a Prehearing Order, setting September 13, 2011, as the date
of the public input hearing in Wyalusing, Pennsylvania.




       1
             Pentex’s objection to the Protest of Ms. Ward and its request for dismissal
of the same was denied at the prehearing conference on August 30, 2011.
        2
             By Order entered August 11, 2011, at Docket No. M-2008-2071852, the
Commission reorganized the Office of Trial Staff into the new Bureau of Investigation
and Enforcement (BIE).

                                             3
               On July 18, 2011, Pentex filed a letter stating that the municipalities
identified in its original Application did not include Wyalusing Borough, but that this was
an oversight and that Pentex wanted to include Wyalusing Borough in its expanded
service territory.


               On July 22, 2011, Laurel Mountain and MarkWest filed a Joint Motion to
Suspend Proceedings pending completion of the proceeding in Application of Laser
Northeast Gathering Company LLC, Docket No. A-2010-2153371 (Laser).3 On
August 11, 2011, Pentex filed an Answer to the Joint Motion, requesting that the
Commission reject the request to suspend the proceeding.


               On August 26, 2011, the ALJ issued a Notice of a further prehearing
conference, setting September 1, 2011, as the date of that prehearing conference. On
August 29, 2011, that prehearing conference was re-scheduled to August 30, 2011.


               On August 30, 2011, a further prehearing conference was held as
scheduled. The main purpose of the prehearing conference was to hear oral argument on
the Joint Motion to Suspend Proceedings. The ALJ also advised the Parties of the
Commission’s August 25, 2011 decision in Laser as well as the list of questions the
Commission directed to the parties in that case.4

       3
               By Order entered June 14, 2011, the Commission held, inter alia, that Laser
had satisfied the threshold issue that its proposed service met the definition of “public
utility” service. The proceeding was remanded to the OALJ to determine whether
granting a Certificate of Public Convenience was “necessary or proper for the service,
accommodation, convenience, or safety of the public” under Section 1103(a) of the
Public Utility Code, 66 Pa. C.S. § 1103(a).
        4
               By Order entered August 25, 2011, at Docket No. A-2010-2153371, the
Commission denied the Pennsylvania Independent Oil and Gas Association’s request for
reconsideration, denied MarkWest’s request for reconsideration, and granted MarkWest’s
request for clarification. Additionally, a Secretarial Letter was issued on August 25,
2011, in which Commissioner Cawley requested that Laser and the other parties address
specific issues in the remand proceeding.

                                              4
              On September 2, 2011, ALJ Buckley issued an Order denying the Joint
Motion to Suspend Proceedings.


              On September 9, 2011, Ms. Ward and Ms. Gerlach contacted the ALJ and
asked if the September 13, 2011, public input hearing could be re-scheduled due to the
damage caused by Tropical Storm Lee. None of the other parties objected to the request,
and the public input hearing was re-scheduled to October 7, 2011.


              On September 12, 2011, Pentex filed proof of publication in the
Pennsylvania Bulletin, at 41 Pa. B. 4926, of its revised Application which included the
Borough of Wyalusing.


              On October 7, 2011, a public input hearing was held in Wyalusing,
Pennsylvania. Two sessions were held, one at 1:00 p.m. and another at 6:00 p.m. Sworn
testimony was presented by Ms. Carolyn Knapp, Mr. Steve Chant, Ms. Diane Ward,
Ms. Laura Hewitt, Mr. Charles Gerlach, Ms. Trudy Gerlach, Ms. Megan Wolfe, Mr. Greg
White, Ms. Shellie Northrop, Mr. John Bromberg, Ms. Michelle Georgescu, and Mr. Fred
Saxer. With the exception of Mr. White, all of the witnesses stated their opposition to the
Application. Additionally, Ms. Ward presented eleven exhibits that were admitted into
the record without objection.


              On October 18, 2011, the ALJ issued a further Prehearing Order revising
the procedural schedule at the request of Pentex. That request was not opposed by any of
the Parties. On November 4, 2011, Pentex filed a Motion for Suspension of the
Procedural Schedule, which was also unopposed. The ALJ issued a Prehearing Order
granting the Motion on November 4, 2011.


              On December 5, 2011, Pentex filed a Petition for Leave to Withdraw its
Application (Petition). On December 27, 2011, Laurel Mountain and MarkWest filed a


                                             5
Joint Answer in Support of Petition for Leave to Withdraw Application (Joint Answer),
asking that the Commission approve the Petition. On December 29, 2011, Diane Ward
filed a letter/Answer to the Petition, agreeing that, while granting the Petition was in the
public interest, the questions raised at the public input hearing of October 7, 2011, should
be answered.


               In an Initial Decision, issued February 9, 2012, ALJ Buckley granted the
Petition. As previously indicated, Diane Ward filed Exceptions on February 25, 2012.
Pentex filed Replies to Exceptions on March 12, 2012.


                                         Discussion


               As a preliminary matter, we note that any issue or Exception that we do not
specifically address has been duly considered and will be denied without further
discussion. It is well settled that we are not required to consider, expressly or at length,
each contention or argument raised by the parties. Consolidated Rail Corporation v. Pa.
PUC, 625 A.2d 741 (Pa. Cmwlth. 1993); see also, generally, University of Pennsylvania
v. Pa. PUC, 485 A.2d 1217 (Pa. Cmwlth. 1984).


               In his Initial Decision, the ALJ made six Findings of Fact and reached four
Conclusions of Law. I.D. at 6-7, 11. We shall adopt and incorporate herein by reference
the ALJ’s Findings of Fact and Conclusions of Law, unless they are reversed or modified
by this Opinion and Order, either expressly or by necessary implication.




                                              6
Pentex’s Petition for Leave to Withdraw its Application


              In its Petition, Pentex stated that, based on the Commission’s clarification
in the August 25, 2011 Order in the Laser proceeding, and Pentex’s desire to
expeditiously offer gathering arrangements, it had revised its business plan and strategy.
Specifically, Pentex averred the following: “Pentex: (1) is no longer willing to serve any
and all potential customers; (2) will use contracts to select and serve a defined and
limited group of customers; and, (3) is no longer committed to expanding its facilities to
meet the demand of the public as would a public utility.” Petition at 2. Pentex stated
that, accordingly, it no longer desired to pursue its Application. Pentex noted that, to the
extent its operations change in the future, it reserved the right to submit a request to
amend its Certificate of Public Convenience or to otherwise determine based on the
Commission’s Regulations whether its proposed service would be subject to the
Commission’s jurisdiction. Pentex further stated that it was in the process of evaluating
the issues raised at the October 7, 2011, public input hearing and intended to submit any
necessary filings to the Commission regarding its current public utility operations by the
end of January 2012. Id. at 3.


              In their Joint Answer, MarkWest and Laurel Mountain averred that
withdrawal of the Application was appropriate and in the public interest because Pentex
had retracted its previous statements that it was willing to serve any customer requiring
gas transportation over its system, that its negotiated contracts were not intended to be
exclusionary, and that it would expand its capacity to meet customer demand. Joint
Answer at 1. They additionally referenced the Commission’s decision to grant Laser’s
similar Petition to Withdraw Application by Order entered December 5, 2011, at Docket
No. A-2010-2153371. Furthermore, they averred that withdrawal of the Application in
this case would conserve the Commission’s and the Parties’ time and resources. Id. at 2.




                                              7
              In her Answer to the Petition, Ms. Ward stated that she believed granting
the Petition was in the public interest. Answer at 1. Nevertheless, she asserted that the
granting of the Petition should be conditioned on the requirement that Pentex respond to
the questions posed at the October 7, 2011, public input hearing. Id. at 2. These
questions addressed issues regarding Pentex’s corporate status, past reports and filings
with the Commission and in Texas, financial and technical fitness, and affiliated interest
agreements in place. Id.; Tr. at 138-174.


ALJ’s Recommendation


              Initially, we note that the ALJ evaluated Pentex’s Petition for Leave to
Withdraw its Application pursuant to Section 5.94(a) of the Commission’s Regulations,
52 Pa. Code § 5.94(a), which governs withdrawal of pleadings, including applications, in
a contested proceeding. Section 5.94(a) provides the following:


              (a) Except as provided in subsection (b), a party desiring to
              withdraw a pleading in a contested proceeding may file a
              petition for leave to withdraw the appropriate document with
              the Commission and serve it upon the other parties. The
              petition must set forth the reasons for the withdrawal. A party
              may object to the petition within 20 days of service. After
              considering the petition, an objection thereto and the public
              interest, the presiding officer or the Commission will
              determine whether the withdrawal will be permitted.

Pursuant to this Section, the ALJ found that granting the Petition was in the public
interest because it would have been premature to compel Pentex to pursue an Application
for additional authority that Pentex no longer believed it needed based on its revised
business plans and its interpretation of the Commission’s determinations in the Laser
proceeding. The ALJ stated that to continue with the proceeding would be a waste of the
time and resources of those involved in the proceeding. I.D. at 11.



                                             8
                  The ALJ clarified that Pentex’s business plans did not require a
jurisdictional pronouncement and that such a pronouncement was not made in the Initial
Decision and should not be inferred. The ALJ also stated that Laurel Mountain and
MarkWest’s representation in their Joint Answer regarding Pentex’s intentions was the
Parties’ interpretation only and was not relevant to the determination in the Initial
Decision. I.D. at 9. Furthermore, the ALJ stated that the issues Ms. Ward raised with
respect to Pentex’s fitness should be addressed outside of the scope of this proceeding,
which was nearing its conclusion. I.D. at 10. The ALJ noted that, on February 1, 2012,
Pentex Natural Gas Company filed an Application for Approval of Transfer of Assets and
Issuance of Certificate of Public Convenience Nunc Pro Tunc at Docket Nos.
A-2012-2287377 and A-2012-2287378 (February 2012 Application), which purports to
respond to some of the issues raised during the October 7, 2011, public input hearing.
I.D. at 10 n.8.


Positions of the Parties


                  In her first Exception to the Initial Decision, Ms. Ward questions Pentex’s
corporate status and whether Pentex is a Texas corporation authorized to do business in
Pennsylvania, as set forth in Finding of Fact No. 1 in the Initial Decision. She believes
that these questions will be important to deciding if the February 2012 Application,
which is currently pending before the Commission, should be granted. Exc. at 1. She
also addresses some aspects of the initial pleading in that proceeding. She states,
however, that the issues she has raised in her first Exception are not relevant to the ALJ’s
decision to grant the Petition in this proceeding, with which she agrees. Ms. Ward
addresses the same issue in her second Exception, in which she avers that this proceeding
should not be closed and should, instead, remain open until the issues involving the
corporate status of Pentex and its authority to do business in Pennsylvania are fully
resolved. Id. at 2.



                                                9
                In her third Exception, Ms. Ward requests clarification of the portion of the
Initial Decision, on page one, which states, “Diane V. Ward, a resident of Terry
Township, Bradford County, Pennsylvania, filed a Protest to Pentex’s Application.” She
explains that she is a property owner, not a resident, in Terry Township. She is a resident
of Standing Stone Township, Bradford County. Id. at 3.


                In its Replies to Exceptions, Pentex avers that all of the corporate status
issues Ms. Ward raises in her Exceptions are outside of the scope of this proceeding and
do not need to be addressed at this time. Pentex states that the February 2012
Application proceeding is intended to resolve inconsistencies related to those issues.
R. Exc. at 2.


                Pentex additionally avers that the ALJ correctly marked the current
proceeding closed because there are no further issues to resolve in this proceeding. It
states issues related to its corporate status are completely independent from issues related
to which customers it may serve in Bradford County. Pentex also states that Ms. Ward
has not raised any issues regarding its decision to serve a limited number of customers,
rather than the public, which was the basis for its Petition. Further, Pentex asserts that
Ms. Ward does not dispute that granting the Petition is in the public interest.
Accordingly, it agrees with the ALJ that a continuation of the proceeding would be a
waste of time and resources for those involved. Id. at 3.


Disposition


                Based upon our review of the record in this case, we shall deny the
Complainant’s first and second Exceptions. In both of these Exceptions, Ms. Ward
addresses issues relating to Pentex’s corporate status and its authority to do business in
Pennsylvania. We agree with the ALJ that these issues, as well as issues related to
Pentex’s fitness generally, are outside of the scope of this proceeding and are not relevant


                                               10
to the ALJ’s determination to grant the Petition pursuant to 52 Pa. Code § 5.94(a). As
Pentex has stated, Ms. Ward has not addressed any issues relating to Pentex’s Petition
and its decision not to pursue its Application to add natural gas gathering services to the
services it currently provides for an existing transportation customer. In fact, Ms. Ward
states that she agrees with the ALJ’s decision to grant the Petition and acknowledges that
the issues she raises in her Exceptions are not relevant to the ALJ’s decision to grant the
Petition.


              Additionally, we acknowledge that the February 2012 Application is
currently pending before the Commission.5 In that Application, Pentex Natural Gas
Company discusses some of the issues raised during the October 7, 2011, public input
hearing and purports to respond to the issues. February 2012 Application at 4, 7. The
Application was served on all of the Parties to this proceeding. Several individuals have
filed protests to the Application, including Ms. Ward. The OCA has also filed a Notice
of Intervention. While we will not comment on or make any determinations on the merits
or the issues relating to the disposition of the February 2012 Application proceeding, it
appears that the questions raised by Ms. Ward may be better addressed within the context
of that proceeding.


              With respect to Ms. Ward’s third Exception, we will clarify page one of the
Initial Decision to reflect that Ms. Ward is a property owner in Terry Township and is a
resident of Standing Stone Township, Bradford County. Accordingly, we shall grant
Ms. Ward’s third Exception for the purpose of making this clarification.




       5
               In the Application, Pentex Natural Gas Company seeks to transfer 100% of
the assets of its subsidiary, Pentex Pipeline Company, to Pentex Natural Gas Company.
Pentex Natural Gas Company also requests that the Commission issue a Certificate of
Public Convenience to Pentex Natural Gas Company because it will continue to serve
Cargill Meat Solutions Corporation.


                                             11
              We also note that the ALJ’s decision to grant the Petition in this case is
consistent with our recent decision to grant Laser’s Petition to Withdraw Application.
See, Application of Laser Northeast Gathering Company LLC, Docket No.
A-2010-2153371 (Order entered December 5, 2011). In that case, Laser stated the
following: “it (1) [wa]s no longer willing to serve any and all potential customers;
(2) will use contracts to select and serve a defined and limited group of customers; and,
(3) [wa]s no longer committed to expand its facilities to meet demand of the public as
would a public utility.” Id. at 15. We found that Laser’s averments in its Petition were
sufficient to grant a withdrawal of its application because it was clear that Laser would no
longer be providing “public utility” service pursuant to Section 102 of the Code, 66 Pa.
C.S. § 102, and our Policy Statement at 52 Pa. Code § 69.1401 (guidelines for
determining public utility status – statement of policy). Id. at 15-16. As Pentex made
similar averments in its Petition, we believe the ALJ correctly granted the Petition in this
case.


                                        Conclusion


              For the reasons discussed herein, we shall deny Ms. Ward’s first and
second Exceptions and grant her third Exception for the purpose of clarifying that she is a
property owner in Terry Township and is a resident of Standing Stone Township,
Bradford County. Additionally, we shall modify the ALJ’s Initial Decision for the
limited purpose of making this clarification; THEREFORE,


              IT IS ORDERED:


              1.     That the Exceptions of Diane V. Ward, filed on February 25, 2012,
are granted, in part, and denied, in part, consistent with this Opinion and Order.




                                             12
             2.     That the Initial Decision of Administrative Law Judge Dennis J.
Buckley, issued February 9, 2012, is modified for the limited purpose of clarifying that
Diane V. Ward is a property owner in Terry Township and a resident of Standing Stone
Township, Bradford County.


             3.     That the Petition for Leave to Withdraw Application filed by Pentex
Pipeline Company on December 5, 2011, is granted.

             4.     That this proceeding shall be marked closed.


                                                 BY THE COMMISSION,



                                                 Rosemary Chiavetta
                                                 Secretary

(SEAL)

ORDER ADOPTED: April 26, 2012

ORDER ENTERED: April 26, 2012




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