Pennsylvania Supreme Court Holds That PUC Has No Jurisdiction Over Municipal Authorities Merely Because They Provide Services Beyond the Boundaries Of Their Incorporating Municipality

Christopher W. Cahillane, Esq., ccahillane@tuckerlaw.com, (412) 594-5552

In a long-awaited decision by Pennsylvania’s municipal authority community, the Pennsylvania Supreme Court recently held in Conyngham Township v. Pennsylvania Public Utility Commission, No. 34 MAP 2025 (Pa. Oct. 29, 2026), that the Pennsylvania Public Utility Commission (“PUC”) has no regulatory authority over municipal authorities organized under the Pennsylvania Municipality Authorities Act (“MAA”) merely because those authorities provide utility services outside the boundaries of the municipality that created them. 

The decision reversed a 2024 decision of the Pennsylvania Commonwealth Court which had held that the PUC did, in fact, have jurisdiction to consider whether a municipal authority could expand outside the boundaries of its incorporating jurisdiction. The Supreme Court’s decision confirms the long-standing independence of Pennsylvania municipal authorities from regulation by the PUC.

The Conyngham case originally arose from a dispute between the Sanitary Sewer Authority of the Borough of Shickshinny and Conyngham Township in Luzerne County involving wastewater treatment provided by the Authority within Conyngham Township. The dispute resulted in Conyngham Township filing a formal complaint with the PUC, arguing that the Shickshinny Sewer Authority was effectively operating as a public utility outside its incorporating municipality and was therefore required to obtain a Certificate of Public Convenience from the PUC in order to operate beyond the borders of Shickshinny Township. 

               At the heart of the dispute was an apparent conflict between two Pennsylvania statutes:

• The Public Utility Code, 66 Pa.C.S. § 101 et seq., which generally gives the PUC authority over public utilities and certain municipal entities providing utility services outside their geographic boundaries. See 66 Pa.C.S. § 1102(a)(5) & 1501; and,

• The Municipality Authorities Act, 53 Pa.C.S. § 5601 et seq., which establishes municipal authorities as independent entities and provides that Pennsylvania courts of common pleas have exclusive jurisdiction over disputes involving an authority’s rates and services. See 53 Pa.C.S. § 5607(d)(9).

The central question before the Commonwealth Court was whether the PUC’s authority under the Public Utility Code extended to municipal authorities incorporated under the MAA, particularly when those authorities provided services outside the boundaries of their incorporating municipality. The Commonwealth Court held that such municipal authorities were subject to the PUC’s jurisdiction. See Conyngham Twp. v. Pa. PUC, 325 A.3d 885 (Pa. Commw. Ct. 2024).

The Pennsylvania Supreme Court, however, rejected the Commonwealth Court’s interpretation, noting that municipal authorities are distinct legal entities and are substantially independent from the municipalities that create them. The Supreme Court further noted that municipal authorities operate as independent agencies of the Commonwealth under their own statutory framework. 

The Court focused particularly on Section 5607(d)(9) of the MAA, which authorizes municipal authorities to establish their own rates and determine the services and improvements necessary to provide adequate, safe, and reasonable service.  The Court accordingly held that municipal authorities incorporated under the MAA are not required to obtain a PUC-issued Certificate of Public Convenience before providing utility services beyond the boundaries of their incorporating municipality.

For Pennsylvania municipal authorities, the Supreme Court’s decision in Conyngham leads to three important takeaways:

1.           The PUC does not have regulatory authority over MAA municipal authorities simply because they serve customers outside their incorporating municipality.

The Conyngham decision clarifies that providing utility service across municipal boundaries does not, by itself, subject a municipal authority to PUC regulation or create a Certificate of Public Convenience requirement. This is particularly significant for regional water and sewer authorities that serve customers in multiple municipalities.

2.           Municipal authorities retain substantial independence from their incorporating municipalities.

The Supreme Court reaffirmed that municipal authorities are separate legal entities from the municipalities that created them and are not necessarily subject to the same regulatory framework as municipalities that directly operate utility systems. 

3.           Courts of Common Pleas remain the sole forum for disputes involving rates and services.

The Supreme Court emphasized that Section 5607(d)(9) of the MAA provides a remedy for individuals challenging the reasonableness or uniformity of an authority’s rates or the adequacy, safety, and reasonableness of its services. Those disputes may be brought before the appropriate Court of Common Pleas. In other words, the regulatory forum may be different, but customers retain statutory avenues to challenge rates and service.

Bottom line: The traditional independence of municipal authorities from PUC regulation has been preserved. Municipal authorities incorporated under the Municipality Authorities Act generally do not need PUC approval simply to provide utility services outside their incorporating municipality. Disputes involving their rates and services are instead governed by the MAA’s framework, including the exclusive jurisdiction of the Courts of Common Pleas.