Pennsylvania

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Attorney for PUC says “small cadre” trying to kill gas industry

Attorney Matt Haverstick (Right) seen here with client Eric Arneson(L), from the office of open records in Harrisburg. Haverstick represented the PUC  in the Robinson Township case.

AP Photo

In this file photo, attorney Matt Haverstick (Right) seen here with Eric Arneson(L), from the office of open records in Harrisburg. Haverstick represented the PUC in the Robinson Township case. He said there was a "small cadre trying to kill" the gas industry.

*This story has been updated with a comment from the PUC.

A private practice attorney representing the Public Utility Commission before the Supreme Court in the Robinson Township case, has told a Pittsburgh newspaper that he was discouraged by the court’s decision to toss aspects of the state’s oil and gas law saying “there’s an industry trying to bring prosperity to Pennsylvania and there seems to be a small cadre trying to kill it.” Attorney Matt Haverstick confirmed that he gave the statement to a reporter at the Pittsburgh Tribune Review. But he said through an email that he wasn’t speaking for the PUC.

A spokesperson for the PUC said Haverstick’s comment do not reflect the views of the PUC or it’s commissioners.

The Pennsylvania Supreme Court has ruled that sections of Act 13 related to PUC review of local zoning ordinances regulating oil and gas operations are no longer valid. The PUC has reviewed the Court’s ruling and accepts the decision without reservation. As a result of this decision, the PUC will continue to carry out its statutory obligation under Act 13 to collect and distribute unconventional gas well Impact Fees.

“The PUC has always sought to be an independent and unbiased agency, focused on ensuring safe and reliable utility service while also safeguarding the public interest,” said Commission Chairman Gladys M. Brown. “The Court has spoken very clearly on this matter and the Commission will continue to focus on its key responsibility under Act 13, which is the collection of Impact Fees and the distribution of those funds to counties and municipalities across Pennsylvania.”

Haverstick, a partner at Kleinbard LLC, said through an email that the “small cadre” did not refer to the Supreme Court, but would not elaborate on who or what the phrase did refer to, and did not return calls seeking clarification. Haverstick has also served as an attorney for Senate Republican Caucus and his firm biography says one of his legal specialties is public corruption. His comment has raised concerns among advocates who say it illustrates a bias on the part of the PUC.

Alex Bomstein is an attorney with the Clean Air Council, which is challenging Sunoco Logistic’s eminent domain authority in constructing the Mariner East 2 pipeline. Sunoco gained its eminent domain authority from the PUC.

“The way he characterized it definitely made it seem like the PUC is more concerned with benefiting the gas industry rather than protecting Pennsylvania consumers,” said Bomstein. “Their job is to make sure utilities are fairly run and operated, and don’t discriminate against people or charge unfair rates.”

Lynda Farrell, with the Pipeline Safety Coalition, agreed.

“I could see this (comment) coming from the natural gas industry,” said Farrell. “But the PUC is the entity that grants Sunoco and other [pipelines] eminent domain,” she said. “It’s a very biased statement in favor of the industry, and does not respect the Supreme Court and the constitution.”

The PUC would not respond to questions about the comment or their role with the state’s natural gas industry.

The agency was a party to the lawsuit because it was designated by the legislature in Act 13 to review local zoning ordinances and determine whether they violated the law. Act 13 stripped local municipalities of their authority to determine the location of gas production. When the Supreme Court ruled that aspect of the law unconstitutional in 2013, it did not address the role of the PUC. The PUC’s status became an unresolved issue litigated through the lower courts, and the PUC was obligated to defend itself.

In July 2014, the Commonwealth Court ruled that given the Supreme Court’s decision to strike down the local zoning preemption in Act 13, it made no sense to have challenges to local oil and gas zoning ordinances bypass the traditional appeals process, and go directly to either the PUC or the Commonwealth Court. That decision effectively removed the PUC from the new role created for the agency by Act 13.

But the law had also given the PUC and the Commonwealth Court power to withhold a municipality’s share of the Marcellus Shale impact fee if a local ordinance was found to be in violation of the law.

At oral arguments before the Supreme Court in March, Haverstick argued that the agency should continue to maintain authority to withhold impact fee money in cases of local municipalities zoning the “how” of drilling, if not the “where.” He said the impact fee money is “conditional” and the PUC should enforce those conditions. Referring to the local municipalities that brought the suit, Haverstick told the court:

“They want all carrot and no stick.”

In a majority opinion by the court released Wednesday, the PUC was stripped of its role. Nils Hagen-Frederiksen, a spokesperson for the PUC, says the agency is still reviewing the decision and has no official comment.

John Dernbach, an environmental law professor at Widener University, says although both the 2013 Supreme Court decision, and Wednesday’s ruling, were a win for local governments, it should be taken in context. “The two Supreme Court decisions taken together invalidate or enjoin only a small part of Act 13 and the rest of Act 13 is still there,” he said. “To read this opinion as a sweeping attack on shale gas is to seriously misread what the court did.”

9/30/16 Update: The Pennsylvania Public Utility Commission has issued the following statement:

The Pennsylvania Supreme Court has ruled that sections of Act 13 related to PUC review of local zoning ordinances regulating oil and gas operations are no longer valid. The PUC has reviewed the Court’s ruling and accepts the decision without reservation. As a result of this decision, the PUC will continue to carry out its statutory obligation under Act 13 to collect and distribute unconventional gas well Impact Fees.

“The PUC has always sought to be an independent and unbiased agency, focused on ensuring safe and reliable utility service while also safeguarding the public interest,” said Commission Chairman Gladys M. Brown. “The Court has spoken very clearly on this matter and the Commission will continue to focus on its key responsibility under Act 13, which is the collection of Impact Fees and the distribution of those funds to counties and municipalities across Pennsylvania.”

*A photo caption in this story has been corrected to reflect that Haverstick did not represent Eric Arneson, he represented the Senate Republican Caucus.

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