Conyngham Township v. PUC, Aplt.
CourtSupreme Court of Pennsylvania
Date FiledOctober 29, 2026
Docket34 MAP 2025
JudgeBrobson, P. Kevin
StatusPublished
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Full Opinion
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IN THE SUPREME COURT OF PENNSYLVANIA
MIDDLE DISTRICT
TODD, C.J., DONOHUE, DOUGHERTY, WECHT, MUNDY, BROBSON, McCAFFERY, JJ.
CONYNGHAM TOWNSHIP, : No. 34 MAP 2025
:
Appellee : Appeal from the Order of the
: Commonwealth Court at No. 113
: CD 2024, dated October 4, 2024,
v. : Vacating and Remanding the
: Decision of the Public Utility
: Commission at No. C-2021-
PENNSYLVANIA PUBLIC UTILITY : 3023624 dated January 18, 2024
COMMISSION, :
: ARGUED: April 16, 2026
Appellant :
OPINION
JUSTICE McCAFFERY DECIDED: October 29, 2026
For more than 80 years, municipal authorities throughout the Commonwealth have
operated largely without regulation by the Pennsylvania Public Utility Commission
(Commission). Under the Public Utility Code (Code), 66 Pa.C.S. §§ 101-3316, the
Commission exercises regulatory authority over public utilities and municipal entities
providing utility service to customers beyond their corporate boundaries. Since 1945, the
prevailing law has been that the Commission lacks regulatory authority over municipal
authorities incorporated under the Municipality Authorities Act (MAA), 53 Pa.C.S. §§
5601-5623. The MAA is a comprehensive statutory scheme governing municipal
authorities that places jurisdiction over disputes involving their rates and service
exclusively with the courts of common pleas. With one exception, 1 municipal authorities
established under the MAA historically have not been regulated by the Commission, even
1 The Pittsburgh Water and Sewer Authority, discussed infra, is the sole exception.
when they provide service outside the boundaries of their incorporating municipalities.
However, in 2024, the Commonwealth Court concluded the Commission possessed
jurisdiction to consider a challenge to a municipal authority’s failure to obtain Commission
approval, in the form of a certificate of public convenience (certificate), before extending
its utility service to customers beyond the boundaries of the incorporating municipality.
We granted discretionary review to consider the propriety of that decision.
We hold the Commission’s jurisdiction over municipal corporations, as defined
in the Code, does not extend to municipal authorities incorporated under the MAA,
because the MAA vests the courts of common pleas with exclusive jurisdiction over
municipal authorities’ rates and services. We further hold that municipal authorities
incorporated under the MAA are not subject to Commission regulation when they operate
beyond the boundaries of their incorporating municipalities. Therefore, we reverse the
Commonwealth Court’s order.
I. FACTS AND PROCEDURAL HISTORY
In 1973, the Borough of Shickshinny (Borough), a municipality in Luzerne County,
filed Articles of Incorporation with the Secretary of the Commonwealth establishing the
Sanitary Sewer Authority of the Borough of Shickshinny (Authority) as a municipal
authority for the purpose of constructing, improving, furnishing and equipping a sanitary
sewage system and sewage treatment works. See Certified Record at 909a-912a.
Shortly thereafter, the Secretary issued a Certificate of Incorporation “evidencing the
incorporation of [the A]uthority under the provisions of [the Municipality Authorities Act of
1945 (1945 MAA)].” Id. at 917a. The Borough is the Authority’s sole member.
The Authority treats domestic wastewater and discharges the treated wastewater
into the Susquehanna River in accordance with a permit issued by the Pennsylvania
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Department of Environmental Protection (DEP). The Authority operates a sewage
processing plant on Authority-owned property in adjacent Conyngham Township
(Township). The Authority provides sewage treatment services to the Borough, a portion
of the Township, and a few other areas beyond the Borough limits. The Township’s sewer
lines are owned and maintained by the Conyngham Township Sewer Authority (CTSA)
and convey wastewater to the Authority’s processing plant via a single point of
connection, where it is treated by the Authority. The Township is not within the Borough’s
corporate limits and has no representation on the Authority’s governing board.
In 1992, the Authority and the Township entered into a Sewage Treatment
Agreement, wherein the Authority agreed to provide sewage treatment and disposal
services to the CTSA as a single bulk customer. At that time, the Authority provided
sewer services to approximately 220 residential customers and 8 commercial customers
in the Township as well as the Township itself, which received service at its municipal
building. For 28 years, the Authority directly billed the CTSA for its bulk sewage treatment
services. The CTSA, in turn, directly billed residential and commercial customers in the
Township a flat $134 quarterly rate for sewer services.
In September 2020, the Authority notified the Township it was cancelling the
Sewage Treatment Agreement due to the Township’s failure to address influx and
infiltration issues for the prior three years. 2 Consequently, in January 2021, the Authority
began directly billing individual Township customers $75 per quarter for its sewer
services. Between January 2021 and September 2021, the Authority collected nearly
$55,000 from Township customers.
2 In 2020, the Authority also filed suit in the Court of Common Pleas of Luzerne County
against the Township and the CTSA, alleging breach of contract and unjust enrichment
and seeking declaratory and injunctive relief. That suit was still pending as of the date of
the Commission’s decision in this case. See Certified Record at 1165a.
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A. Agency Proceedings
In January 2021, the Township filed a Formal Complaint with the Commission,
alleging the Authority was operating as a public utility in the Township and directly billing
Township customers without a Commission-issued certificate. Under Section 1102(a)(5)
of the Code, a certificate is required “[f]or any municipal corporation to acquire, construct,
or begin to operate, any plant, equipment, or other facilities for the rendering or furnishing
to the public of any public utility service beyond its corporate limits.” 66 Pa.C.S. §
1102(a)(5). In its Formal Complaint, the Township asked the Commission to “order [the
Authority] to immediately stop billing residents of [the] Township and return all monies
collected until after a valid [c]ertificate … is obtained.” Certified Record at 3a.
In September 2021, the Commission’s Bureau of Investigation and Enforcement
(Bureau) filed a Notice of Intervention in the matter, seeking a civil penalty against the
Authority. The Bureau asserted that following its preliminary investigation, it determined
“the Authority’s termination of the Sewage Treatment Agreement with the Township[] …
and its subsequent provision of wastewater services to numerous Township residents for
compensation renders it … a public utility subject to the Commission’s jurisdiction.”
Certified Record at 142a.
When the parties were unsuccessful in resolving their dispute through mediation,
the matter proceeded to a hearing before an administrative law judge (ALJ). Before the
hearing, the parties submitted a Joint Stipulation of Facts. The ALJ held an evidentiary
hearing in October 2022 and closed the record in March 2023.
The ALJ issued an Initial Decision sustaining the Township’s Formal Complaint.
The ALJ concluded the Township met its burden of proving the Authority was improperly
operating as a public utility in the Township without a Commission-issued certificate,
specifically finding the Authority “provided sewer treatment service beyond its Borough
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limits for compensation in violation of Section 1102(a)(5) of the Code.” Certified Record
at 1115a. The ALJ directed the Authority to file an application for a certificate with the
Commission and to issue partial refunds to Township customers, but he denied the
Bureau’s request for a civil penalty. Notably, in reaching his decision, the ALJ did not
consider or address the applicability of the MAA, even though the Authority raised the
issue in its brief filed with the ALJ.
The Authority then filed exceptions to the ALJ’s Initial Decision, asserting the
Commission lacked jurisdiction over the Authority under Section 5607(d)(9) of the MAA,
which provides, in pertinent part:
Any person questioning the reasonableness or uniformity of a rate fixed by
an authority or the adequacy, safety and reasonableness of the
authority’s services, including extensions thereof, may bring suit
against the authority in the court of common pleas of the county where
the project is located or, if the project is located in more than one county, in
the court of common pleas of the county where the principal office of the
project is located. The court of common pleas shall have exclusive
jurisdiction to determine questions involving rates or service.
53 Pa.C.S. § 5607(d)(9) (emphases added). The Authority averred the threshold question
before the Commission was whether its jurisdiction over municipal corporations, as
defined in the Code, also extends to municipal authorities incorporated under the MAA.
Relying on Section 5607(d)(9) of the MAA, the Authority asserted: (1) the MAA vests the
courts of common pleas with exclusive jurisdiction over municipal authorities’ rates and
services, and (2) municipal authorities are not subject to Commission regulation, even
when they operate beyond the boundaries of their incorporating municipalities.
The Commission granted in part and denied in part the Authority’s exceptions.
Specifically, the Commission concluded it lacked jurisdiction over municipal authorities
providing service beyond the boundaries of their incorporating municipalities under the
MAA. The Commission explained that although it historically exercised jurisdiction over
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municipal corporations providing services outside their boundaries and issued
certificates to those entities, the 1945 amendments to the MAA explicitly removed
municipal authorities from the Commission’s jurisdiction. Section 5607(d)(9) of the
present MAA vests the courts of common pleas with exclusive jurisdiction over the rates
and services of municipal authorities. The Commission noted that Pennsylvania’s
intermediate appellate courts have similarly interpreted Section 5607(d)(9) and held the
MAA gives the courts of common pleas, not the Commission, exclusive jurisdiction over
a municipal authority’s rates and service, both within and beyond the boundaries of the
incorporating municipality.
The Commission also relied on the parties’ stipulation that the Authority is a
municipal authority, noting that municipal authorities and municipal corporations are
distinct entities under Pennsylvania law. Section 1301 of the Code establishes
Commission jurisdiction over the rates charged by municipal corporations when those
entities provide public utility service beyond their corporate limits. See 66 Pa.C.S. § 1301.
Section 1501 of the Code gives the Commission jurisdiction over the quality, reliability,
and adequacy of services of municipal corporations under similar terms. See 66 Pa.C.S.
§ 1501. However, the Commission concluded its jurisdiction does not extend to municipal
authorities because the 1945 amendments to the MAA expressly removed municipal
authorities from its jurisdiction, and that provision remains codified in Section 5607(d)(9)
of the present MAA.
The Township appealed to the Commonwealth Court.
B. Commonwealth Court’s Decision
On October 4, 2024, the Commonwealth Court vacated the Commission’s order
and remanded the matter to the Commission. See Conyngham Township v. Pa. Pub.
Util. Comm’n, 325 A.3d 885 (Pa. Cmwlth. 2024). The Commonwealth Court began by
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explaining that Section 1102(a)(5) of the Code allows, “[u]pon the application of any public
utility and the approval of such application by the [C]ommission, evidenced by its
[Certificate] first had and obtained, and upon compliance with existing laws, ... [f]or any
municipal corporation to acquire, construct, or begin to operate, any plant, equipment, or
other facilities for the rendering or furnishing to the public of any public utility service
beyond its corporate limits.” Id. at 888 (citation omitted; emphasis and some alterations
in original). Further, Section 102 of the Code expressly includes an “authority” within the
definition of “municipal corporation.” Id. (citation omitted). The Commonwealth Court
also relied on Section 1501 of the Code, which provides that “[a]ny public utility service
being furnished or rendered by a municipal corporation beyond its corporate limits
shall be subject to regulation and control by the [C]ommission as to service and
extensions, with the same force and in like manner as if such service were rendered by
a public utility.” Id. (citation and footnote omitted; emphasis in original).
The Commonwealth Court acknowledged, however, that Section 5607(d)(9) of the
MAA gives the courts of common pleas jurisdiction to determine “the reasonableness or
uniformity of a rate fixed by an authority or the adequacy, safety, and reasonableness of
the authority’s services, including extensions thereof” and further provides that “[t]he court
of common pleas shall have exclusive jurisdiction to determine questions involving
rates or service.” Conyngham Township, 325 A.3d at 888 (citation omitted; emphases
in original). Based on this statutory language, the Commonwealth Court found “the MAA
does not confer jurisdiction on the common pleas courts for all disputes involving
municipal authorities but, rather, only those involving ‘rates or service.’” Id. at 888-889
(emphases in original).
In rejecting the Commission’s claim that its jurisdiction extends only to municipal
corporations and municipalities, the Commonwealth Court found the cases on which the
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Commission relied involved challenges to rates, which are expressly covered by the
MAA’s grant of exclusive jurisdiction to the courts. The Commonwealth Court observed
those cases did not address the Commission’s “jurisdiction over municipal authorities
concerning the Code’s mandate that municipal authorities obtain [c]ertificates when
furnishing service beyond their corporate limits.” Conyngham Twp., 325 A.3d at 889; see
Elizabeth Township v. Mun. Auth. of McKeesport, 447 A.2d 245 (Pa. 1982); Rankin v.
Chester Mun. Auth., 68 A.2d 458 (Pa. Super. 1949).
The Commonwealth Court reasoned that to conclude the common pleas courts
have exclusive jurisdiction over a claim that a municipal authority failed to obtain a
certificate before operating beyond its corporate limits, the Court would need to construe
the certification requirement as relating to “the reasonableness or uniformity of a rate
fixed by an authority or the adequacy, safety, and reasonableness of the authority’s
services” pursuant to Section 5607(d)(9) of the MAA. Conyngham Township, 325 A.3d
at 889-890 (citation omitted; emphases in original). However, the Commonwealth Court
declined to do so, because it determined the certification requirement “does not ‘involv[e]
rates or service.’” Id. at 890 (citation omitted; brackets in original).
To reach that conclusion, the Commonwealth Court looked to the provisions of the
Code governing the issuance of certificates. In particular, Section 1103(a) of the Code
provides a certificate “shall be granted by order of the [C]ommission, only if the
[C]ommission shall find or determine that the granting of such [C]ertificate is
necessary or proper for the service, accommodation, convenience, or safety of the
public.” Conyngham Township, 325 A.3d at 890 (citation omitted; emphasis and
alterations in original). According to the Commonwealth Court, the primary consideration
for obtaining a certificate is whether it is “necessary or proper[,]” which it opined does not
implicate rates or service. Id. (citation omitted).
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Lastly, the Commonwealth Court found the Commission’s argument that it lacked
jurisdiction over this action was undermined by the fact that the Commission previously
issued certificates to municipal authorities in two prior cases. Conyngham Township, 325
A.3d at 890-891 (citing E. Dunkard Water Auth. v. Sw. Pa. Water Auth., 2020 WL 6707503
(Pa. Cmwlth. filed Nov. 16, 2020) (unreported); Middle Smithfield Twp. Mun. Auth. v.
Maula, 2008 WL 9404647 (Pa. Cmwlth. filed Oct. 24, 2008) (unreported)). Therefore, the
Commonwealth Court concluded “the Commission had jurisdiction to consider the
Township’s [Formal] Complaint challenging the Authority’s operation [in the Township]
without a [c]ertificate.” Id. at 891.
II. ISSUE
The issue before this Court is whether the Commonwealth Court erred in concluding
the Commission has jurisdiction over a municipal authority established under the MAA
when the authority provides utility service to customers beyond the boundaries of its
incorporating municipality. See Conyngham Township v. Pa. Pub. Util. Comm’n, 340
A.3d 272 (Pa. 2025). 3
3 The Dissent takes issue with our use of the term “jurisdiction” throughout this decision,
opining that we improperly conflate subject matter jurisdiction over a dispute with
regulatory authority over a municipal authority. Dissenting Opinion at 2. According to the
Dissent, this appeal is not about the Commission’s regulatory authority over municipal
authorities generally, but only whether the Commission has subject matter jurisdiction to
determine if Section 5607(d)(9) of the MAA applies to the underlying dispute, consistent
with the Commonwealth Court’s limited holding. While the Commission did raise that
issue in its Petition for Allowance of Appeal (PAA), Allocatur Docket No. 657 MAL 2024,
both parties also clearly raised the overarching question of whether the Commission has
any authority to regulate a municipal authority’s rates and service following the MAA’s
enactment. See, e.g., PAA, 12/23/2024, at 32 (asserting the Commonwealth Court’s
decision “has broad practical implications for previously unregulated entities that will now
be considered to fall under Commission jurisdiction”); Answer to PAA, 12/31/2024, at 1
(asserting this appeal “involves the fundamental question of whether a municipal authority
can operate as a public utility outside its jurisdictional limits without obtaining the requisite
(continued…)
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III. OVERVIEW OF PENNSYLVANIA PUBLIC UTILITY LAWS
We granted discretionary review in this case to resolve an apparent conflict
between two statutes governing public utility service in Pennsylvania — the Code and the
MAA — specifically as they relate to municipal authorities. 4 Before we address the issue
on appeal, we will provide a brief overview of both statutes.
A. Public Utility Code
The Code governs privately owned entities that provide water, electric, gas, sewer,
and similar services to the public, as well as municipalities and municipal corporations
that provide utility service to customers beyond their geographic boundaries. See 66
Pa.C.S. §§ 1101, 1102(a). 5 The present-day Code was enacted in 1978 and was a
codification, without substantial change, of the former Public Utility Law, which was in
effect from 1937 to 1978. The Code grants the Commission “general administrative
[c]ertificate … and submitting itself to Commission oversight and regulation”). In fact, that
broader issue comprised the bulk of the parties’ appellate briefs and was the focus of their
oral arguments before this Court. This is not surprising, since the question we directed
the parties to address was: “Did the Commonwealth Court err when it held the
[Commission] has jurisdiction over a municipal authority established under the [MAA]?”
Conyngham Twp. v. Pa. Pub. Util. Comm’n, 340 A.3d 272, 273 (Pa. 2025). Based on the
parties’ arguments, it is clear they understood that our use of the word “jurisdiction” meant
not only subject matter jurisdiction over the underling dispute, but, more broadly,
regulatory authority and oversight over municipal authorities incorporated under the MAA.
Hence, it is confounding that the Dissent opines that this broader legal issue is not actually
before the Court.
4 The question before us, which involves the interplay between the Code and the MAA, is
one of statutory interpretation. Thus, our standard of review is de novo, and our scope of
review is plenary. See Leight v. Univ. of Pittsburgh Physicians, 243 A.3d 126, 136 (Pa.
2020).
5 “The [Commission] regulates the rates and service of investor-owned water and
wastewater companies, along with some municipal systems that serve customers outside
their boundaries.” A History of the Pennsylvania Public Utility Commission at 2, available
at https://www.puc.pa.gov/general/pdf/PUC_History.pdf (last accessed October 26,
2026).
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power and authority to supervise and regulate all public utilities doing business within this
Commonwealth.” 66 Pa.C.S. § 501(b).
Under the Code, a “public utility,” as defined in the statute, is required to obtain a
certificate to legally operate and always is subject to the Commission’s regulation.
Section 1501 of the Code provides:
Every public utility shall furnish and maintain adequate, efficient, safe, and
reasonable service and facilities, and shall make all such repairs, changes,
alterations, substitutions, extensions, and improvements in or to such
service and facilities as shall be necessary or proper for the
accommodation, convenience, and safety of its patrons, employees, and
the public. Such service also shall be reasonably continuous and without
unreasonable interruptions or delay. Such service and facilities shall be
in conformity with the regulations and orders of the [C]ommission.
Subject to the provisions of this part and the regulations or orders of the
[C]ommission, every public utility may have reasonable rules and
regulations governing the conditions under which it shall be required to
render service….
66 Pa.C.S. § 1501 (emphasis added). A public utility is required to obtain a certificate
before it “begin[s] to offer, render, furnish or supply” utility service or “abandon[s] or
surrender[s], in whole or in part, any service[.]” 66 Pa.C.S. § 1102(a)(1)-(2). The
issuance of a certificate, in effect, subjects the public utility provider to the Commission’s
regulation and oversight in the provision of utility service to ratepayers. The Commission
will grant a certificate only if it “determine[s] that the granting of such certificate is
necessary or proper for the service, accommodation, convenience, or safety of the public”
and “may impose such conditions as it may deem to be just and reasonable.” 66 Pa.C.S.
§ 1103(a). Through its regulation, the Commission ensures that public utility providers
meet strict insurance, safety, and operational standards and provide safe, reliable, and
reasonable service to the public at established rates.
In addition, “[a c]ertificate … makes it lawful for [a] public utility to provide service
within a defined territory, and imposes on the public utility an obligation to provide
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service in that territory.” Lukens Steel Co. v. Pa. Pub. Util. Comm’n, 499 A.2d 1134, 1136
n.1 (Pa. Cmwlth. 1985) (en banc) (emphasis added); see Borough of Lansdale v. Phila.
Elec. Co., 170 A.2d 565, 567 (Pa. 1961) (recognizing the Commission has jurisdiction to
determine a public utility’s authority under its certificate, as well as its “rights to serve [a]
particular territory”). Section 1101 of the Code provides that a certificate issued by the
Commission “shall include a description of the nature of the service and of the territory in
which it may be offered, rendered, furnished or supplied.” 66 Pa.C.S. § 1101.
Unlike a privately owned utility, which always is subject to the Commission’s
regulation, a municipal corporation that provides public utility service is subject to the
Commission’s regulation only when it provides service to customers beyond its municipal
boundaries. Section 1501 of the Code provides in relevant part:
Any public utility service being furnished or rendered by a municipal
corporation beyond its corporate limits shall be subject to regulation
and control by the [C]ommission as to service and extensions, with the
same force and in like manner as if such service were rendered by a public
utility.
66 Pa.C.S. § 1501 (emphasis added). Thus, before a municipal corporation may furnish
service beyond its corporate limits, it must obtain the Commission’s approval in the form
of a certificate, as set forth in Section 1102(a)(5) of the Code:
Upon the application of any public utility and the approval of such
application by the [C]ommission, evidenced by its certificate of public
convenience first had and obtained, and upon compliance with existing
laws, it shall be lawful[] … [f]or any municipal corporation to acquire,
construct, or begin to operate, any plant, equipment, or other facilities
for the rendering or furnishing to the public of any public utility service
beyond its corporate limits.
66 Pa.C.S. § 1102(a)(5) (emphases added); see Borough of Phoenixville v. Pa. Pub. Util.
Comm’n, 280 A.2d 471, 474 (Pa. Cmwlth. 1971) (en banc) (“As soon as a [municipality]
holds itself out to render uncertificated extraterritorial service and renders such service, it
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is within the jurisdiction of the Commission to determine whether extension of such
service should be granted[]” because “the Commission has jurisdiction to determine the
extent of the extraterritorial utility service area for the municipality.”).
The reason municipal corporations are exempt from Commission regulation when
they provide utility service to customers within their borders is because those customers,
as residents of the municipality, have the power to elect the local officials who set the
utility’s rates and service standards. However, when a municipal corporation serves
customers beyond its borders, those customers have no political representation, so the
Commission steps in to provide state-level oversight and consumer protection. See
County of Dauphin v. Pa. Pub. Util. Comm’n, 634 A.2d 281, 283 (Pa. Cmwlth. 1993)
(“[T]he purpose of subjecting a municipally operated public utility which renders service
beyond its corporate limits to the jurisdiction of the [Commission] is to protect users of the
service who are not residents of the municipality.”); id. at 282 (agreeing that “the reason
for regulating extraterritorial service is so that the municipality cannot discriminate against
users who are outside of the corporate limits”).
B. Municipality Authorities Act
The MAA is a comprehensive scheme specifically governing municipal authorities.
A municipal authority is a special-purpose entity created by one or more municipalities for
the purpose of acquiring, constructing, financing, and operating public works projects.
See 53 Pa.C.S. § 5607(a). 6 A municipal authority is run by a board appointed by the
6 According to the Pennsylvania Department of State website, a municipal authority is “‘a
body politic and corporate’ created to finance and/or operate specific public works
projects without tapping the general taxing powers of the municipality. Authorities
(sometimes known as special districts in other states) are alternate vehicle[s] for
accomplishing public purposes rather than through [the] direct action of counties,
municipalities and school districts.” Municipal and Other Authorities,
https://www.pa.gov/agencies/dos/programs/business/types-of-filings-and-
registrations/municipal-and-other-authorities (last accessed October 26, 2026).
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governing body of the municipality but functions independently of the local government
that incorporated it. See 53 Pa.C.S. § 5610.
Before the current version of the MAA, there were two prior iterations: the
Municipality Authorities Act of 1935 (1935 MAA), which was repealed and replaced 10
years later by the 1945 MAA. The 1945 MAA existed without significant change for almost
60 years. 7
In 2001, the General Assembly codified the present-day MAA, which includes the
following statements, in relevant part, of the statute’s purpose and intent:
(2) The purpose and intent of this chapter being to benefit the people of the
Commonwealth by, among other things, increasing their commerce, health,
safety and prosperity and not to unnecessarily burden or interfere with
existing business by the establishment of competitive enterprises[.]
…
7 The Pennsylvania Department of Community and Economic Development has
described the history of municipal authorities in Pennsylvania as follows:
Municipal authorities in Pennsylvania, as in many other states, had their
beginning in the 1930s Depression. As part of its fiscal recovery policy, the
federal government granted money to states and municipalities for public
works construction to stimulate employment and provide needed public
facilities. These grants had to be matched by the recipient unit, but many
states and localities were unable to pay their share, due both to reduced
revenues and restrictive debt limits. A number of states, including
Pennsylvania, then created state authorities to borrow outside
constitutional debt limits by making use of revenue bonds. Pennsylvania
was one of three states that passed general enabling legislation to allow
their municipalities to create authorities. This was the [1935 MAA].
The 1935 [MAA] was repealed and replaced in 1945 by the present [MAA],
which gave greater flexibility in operation and financing. The [MAA] was
officially codified in the P[ennsylvania] Consolidated Statutes in 2001.
Municipal Authorities in Pennsylvania (Eleventh Edition, April 2020) at 1, available at
https://dced.pa.gov/download/municipal-authorities-in-
pennsylvania/?wpdmdl=57758&refresh=6a5f743862d8b1784640568 (last accessed
October 26, 2026).
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(3) It is the intent of this chapter in specifying and defining the authorized
purposes and projects of an authority to permit the authority to benefit the
people of this Commonwealth by, among other things, increasing their
commerce, health, safety and prosperity while not unnecessarily burdening
or interfering with any municipality which has not incorporated or joined that
authority.
53 Pa.C.S. § 5607(b)(2)-(3).
The MAA explicitly allows incorporated municipal authorities to establish their own
rates and services. Section 5607(d)(9) provides, in pertinent part:
Every authority may exercise all powers necessary or convenient for the
carrying out of the purposes set forth in this section, including, but without
limiting the generality of the foregoing, the following rights and powers:
...
(9) To fix, alter, charge and collect rates and other charges in the area
served by its facilities at reasonable and uniform rates to be
determined exclusively by it for the purpose of providing for the payment
of the expenses of the authority, the construction, improvement, repair,
maintenance and operation of its facilities and properties … and to
determine by itself exclusively the services and improvements
required to provide adequate, safe and reasonable service, including
extensions thereof, in the areas served. If the service area includes more
than one municipality, the revenues from any project shall not be expended
directly or indirectly on any other project unless such expenditures are made
for the benefit of the entire service area.
53 Pa.C.S. § 5607(d)(9) (emphases added). Thus, unlike public utilities governed by the
Code, municipal authorities incorporated under the MAA have the power to “exclusively”
determine their rates and “the services and improvements” necessary to provide utility
service to their customers. Id.
The MAA also does not place geographic limits on where a municipal authority
may provide utility service. Our case law holds that, whether incorporated under the
present MAA, the 1945 MAA, or the 1935 MAA, “municipal authorities are not the
creatures, agents or representatives of the municipalities which organize them, but rather
are ‘independent agencies of the Commonwealth and part of its sovereignty.’”
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Commonwealth v. Erie Metro. Transit Auth., 281 A.2d 882, 884 (Pa. 1971) (citation
omitted; emphasis added); see Marshall v. Port Auth. of Allegheny Cnty., 568 A.2d 931,
939 (Pa. 1990) (“[Municipal] authorities must be state created, and they must be separate
and distinct entities from the municipalities which compose them.”) (Papadakos, J.,
dissenting) (emphasis in original). Municipal authorities, as independent agencies of the
Commonwealth, “ha[ve] no boundaries within which [they] must limit [their] services.”
White Rock Sewage Corp. v. Pa. Pub. Util. Comm’n, 578 A.2d 984, 987 (Pa. Cmwlth.
1990) (en banc); see In re Application of Mun. Auth. of Upper St. Clair, 184 A.2d 695, 698
(Pa. 1962) (recognizing “the fundamental nature of an [a]uthority as a corporate agency
of the state, and not the child of a municipality”). 8
A municipal authority’s right to define its service area is embodied in Section
5607(d)(9) of the MAA, which authorizes an incorporated authority “to determine by itself
exclusively the services and improvements required to provide adequate, safe and
reasonable service, including extensions thereof, in the areas served.” 53 Pa.C.S. §
5607(d)(9). This “exclusive” power addresses the authority’s independence from its
organizing municipality, but, as discussed more fully below, does not affect the court of
common pleas’ jurisdiction to review the legality of the authority’s actions under the MAA.
See Yezioro v. N. Fayette Cnty. Mun. Auth., 164 A.2d 129, 137 (Pa. Super. 1960) (“The
[MAA] provision to the effect that the services provided by the authority are to be
determined ‘by itself exclusively’ must certainly have been intended to make it clear that
the authority itself, not the creating municipality or some other instrumentality, controlled
the initial determination of the service.”).
8 While a municipal authority is an independent agency of the Commonwealth, the MAA
provides that “[a]n authority may not pledge the credit or taxing power of the
Commonwealth” and the authority’s obligations “are not obligations of the
Commonwealth.” 53 Pa.C.S. § 5607(e)(1)-(2).
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IV. REGULATION OF MUNICIPAL AUTHORITIES
With this background in mind, we now turn to the present dispute, which involves
the conflict between the Code and the MAA regarding the regulation of municipal
authorities that provide public utility service beyond the boundaries of their incorporating
municipalities. To resolve this conflict, we will review the statutory language, engage in
a statutory construction analysis, and examine prior case law interpreting both statutes
and their predecessor laws.
Generally, under the Code, the Commission regulates the rates and services of
public utilities and municipal corporations that provide utility service beyond their
boundaries, whereas municipal authorities incorporated under the MAA establish their
own rates and services, without Commission approval.
The conflict in this case arises, specifically, from the definition of “municipal
corporation” in the Code. The Code defines “municipal corporation” as “[a]ll cities,
boroughs, towns, townships, or counties of this Commonwealth, and also any public
corporation, authority, or body whatsoever created or organized under any law of this
Commonwealth for the purpose of rendering any service similar to that of a public
utility.” 66 Pa.C.S. § 102 (emphases added). In other words, the Code defines
“municipal corporation” as including both municipalities — cities, boroughs, towns, and
townships — and “authorit[ies] … created or organized under any law of this
Commonwealth for the purpose of rendering any service similar to that of a public utility.”
66 Pa.C.S. § 102. “Authority” is not defined separately in the Code. Under the plain
language of Section 1501 of the Code, then, authorities are regulated in the same manner
as public utilities when they provide extraterritorial service, meaning they are subject to
Commission regulation and must obtain a certificate before operating beyond their
corporate limits. See 66 Pa.C.S. §§ 1102(a)(5), 1501.
[J-32-2026] - 17
Given the Code’s inclusion of “authority” in its definition of “municipal corporation,”
the question then becomes whether municipal authorities incorporated under the
MAA are subject to Commission regulation. The Township asserts that a municipal
authority created under the MAA is clearly encompassed within the Code’s definition of
“municipal corporation,” since it is “created or organized under [a] law of this
Commonwealth for the purpose of rendering [a] service similar to that of a public utility.”
66 Pa.C.S. § 102. The Township posits that since authorities are municipal corporations
under the Code, and the Commission has jurisdiction over municipal corporations
operating beyond their boundaries, a municipal authority operating beyond the
boundaries of its incorporating municipality — such as the Authority here — is subject to
Commission regulation in the same manner as a public utility. Were this Court to look
only to the provisions of the Code, we might agree. However, because the Authority in
this case specifically was establishe