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Freehold Borough v. Freehold Township

Decided: May 18, 1984.

FREEHOLD BOROUGH, PLAINTIFF-APPELLANT,
v.
FREEHOLD TOWNSHIP, DEFENDANT-RESPONDENT



On appeal from the Superior Court of New Jersey, Law Division, Monmouth County.

King, Dreier and Bilder. The opinion of the court was delivered by King, J.A.D.

King

This case presents the question of whether the Board of Public Utilities has jurisdiction over sewer fees charged by a municipality for services provided to customers residing in a neighboring municipality. The Borough of Freehold appeals from a summary judgment granted in the Law Division ruling that the Board of Public Utilities (BPU) had jurisdiction to review the increase in sewer rates imposed upon residents of Freehold Township whose sewage is treated by the Borough's municipal sewer system. We reverse and remand to the Law Division for a trial on the merits of the Township's contention that the newly-imposed rate increases are arbitrary, capricious and unreasonable.

We conclude that the Board of Public Utilities has no jurisdiction to regulate sewerage charges of municipally-owned systems which serve users in adjoining municipalities. We disagree with the Law Division judge's conclusion that certain

broad language in In re Complaint of Morris Twp., 49 N.J. 194, 205 (1967), compelled a conclusion that the BPU had jurisdiction. Morris Twp. involved water-service charges, not sewer charges, and jurisdiction of the BPU was predicated on a specific legislative grant. N.J.S.A. 40:62-49(f) (water service supplied "under such terms and conditions as may be ordered by the board of public utility commissioners").

The general jurisdiction of the BPU is defined in N.J.S.A. 48:2-13 which has been interpreted as vesting jurisdiction in the BPU over private corporations only, and not over municipal corporations unless such jurisdiction is specifically delegated by statute. See In re Glen Rock, 25 N.J. 241, 246 (1954), overruled on other grounds, North Wildwood v. Bd. of Commissioners of Wildwood, 71 N.J. 354 (1976); Morris Twp., 49 N.J. at 204; Jersey City Incin. Auth. v. Dept. of Public Utilities, 146 N.J. Super. 243, 251-252 (App.Div.1976).

The determination that municipal corporations are not included within the general grant of jurisdiction to PUC first appearing in the case of Ridgewood v. Hopper, 13 N.J.Misc. 775, 181 A. 150 (Sup.Ct.1935), aff'd o.b. 116 N.J.L. 413 (E. & A.1936), and reiterated in In re Glen Rock, supra, has thus been extant since 1935 and has not provoked the enactment of any legislation indicating a contrary intent. We may consider the legislative silence as acquiescence in this construction of the statute. Miller v. Hudson Cty. Bd. of Freeholders, 10 N.J. 398, 413 (1952); Barringer v. Miele, 6 N.J. 139, 144 (1951); State v. Moresh, 122 N.J.L. 77, 79 (E. & A.1939); cf. Closter Service Stations, Inc. v. Ridgefield Park Bd. of Comm'rs, 99 N.J. Super. 69, 75 (App.Div.1968).

[ Id. at 252-253].

Moreover, the BPU itself has recognized the need for a specific statutory grant of power as a condition precedent to the exercise of jurisdiction over municipally owned and operated utilities. N.J.A.C. 14:3-1.1 provides

"Utility" has the same meaning as defined in N.J.S.A. 48:2-13 and includes pipeline utilities as defined in N.J.S.A. 48:10-3, and municipally-operated utilities, insofar as the Board's jurisdiction is extended to them under the appropriate statutes. (Emphasis added).

As stated by this court in Jersey City Incin. the Legislature has had no problem specifically designating those areas in which it intended the BPU to have ...


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