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Jersey City Incinerator Authority v. Department of Public Utilities of New Jersey

Decided: December 30, 1976.


Bischoff, Morgan and E. Gaulkin. The opinion of the court was delivered by Bischoff, J.A.D.


These consolidated appeals require a determination of whether the Board of Public Utilities Commissioners (PUC) has jurisdiction over a municipal incinerator authority so as to compel it to continue to operate its solid waste facility and incinerator until permission to discontinue its operation is granted by the PUC pursuant to N.J.S.A. 48:2-24.

The statutes are silent on this issue and, thus, the resolution of it must rest upon the result of our search for the often elusive "legislative intent."

The Jersey City Incinerator Authority (Authority) was created under the Incinerator Authority Law (N.J.S.A. 40:66A-1 et seq.). The Authority constructed an incinerator plant in 1957 following a sale of bonds. The plant was thereafter operated, using Authority personnel and equipment, until October of 1967 when the Authority entered into a negotiated contract (i.e. , without seeking competitive bids) with North Jersey Incinerator Company (North Jersey) for the operation of the plant. In accordance with the terms of the contract the Authority sold all of its trucks and equipment to North Jersey for $68,000. The operating personnel of the Authority were employed by North Jersey. While this contract was later invalidated because

it was not awarded on the basis of competitive bids, the vehicles and equipment were never returned to the Authority.

After invalidation of the 1967 contract with North Jersey in January 1968, the Authority complied with statutory bidding requirements and awarded North Jersey a contract for operation of the incinerator plant. Since then the Authority's function has been limited to (1) financing and supervising performance of its contract with North Jersey for operation of the incinerator, and (2) supervising a contract with Hudson City Sanitation Company for scavenging in Jersey City. The annual budget of the Authority, which was $3,410,774 in 1971, is underwritten by the City of Jersey City.

The Solid Waste Utility Control Act of 1970 (N.J.S.A. 48:13A-1 et seq.) charges PUC with "the duty of setting and enforcing standards and rates for regulating economic aspects of solid waste collection, disposal and utilization services." N.J.S.A. 48:13A-2.

For many years the incinerator had been operated in violation of state air pollution codes and, commencing in November 1970, in violation of many orders of the Department of Environmental Protection (DEP) to cease emitting smoke into the atmosphere. When the Authority failed to comply with these orders, DEP brought suit in 1972 against the Authority and North Jersey seeking to enjoin the air pollution at the incinerator plant.

The difficulties encountered in attempts to bring the plant into compliance with state and federal emission standards culminated in the city engaging consultants to analyze the incinerator and report on its potential for compliance with State pollution control codes. The consultants concluded that the plant could not be improved and operated in such a manner as to comply with anti-pollution codes.

On November 6, 1974 the Authority passed a resolution which preliminarily recited that:

(1) the incinerator plant is in serious violation of air pollution control codes and cannot be upgraded so as to conform to the codes;

(2) it was not economically or environmentally feasible to construct a new plant, and

(3) continued operation of the plant would be harmful to the atmosphere and constituted a serious hazard to the health of the surrounding area.

The resolution contained references to other factors not here germane and then resolved that:

(1) the executive director/secretary of the Authority "is directed to advise the collection contractor Hudson City Sanitation Company to collect, transport and deliver all solid waste collected from the City of Jersey City to the Municipal Sanitary Landfill in Kearny," and

(2) the executive director of the Authority, "upon the exercise of his discretion is directed to advise North Jersey Incinerator Company to stop the incineration of solid waste."

Operation of the incinerator was terminated.

On November 12, 1974 PUC ordered the immediate reopening of the plant and directed both the Authority and ...

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