ML20112B211
| ML20112B211 | |
| Person / Time | |
|---|---|
| Site: | Limerick  |
| Issue date: | 01/07/1985 |
| From: | Conner T CONNER & WETTERHAHN, PECO ENERGY CO., (FORMERLY PHILADELPHIA ELECTRIC |
| To: | NRC OFFICE OF THE SECRETARY (SECY) |
| References | |
| CON-#185-984 OL, NUDOCS 8501100259 | |
| Download: ML20112B211 (47) | |
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LAW OFFICES CONNER & WETTERH AHN. P.C.
17 4 7 P EN N S Y LVA N I A AV E N U E, N.'W'.
WA S H I N G TO N. D. C. 2 0000
, TEOY m. CON N E R. J R..
M ARK J. WETTERM ANN
' GT BERT M. R ADER
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DOUO L AS K. OLSON k-
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J!SSICA M. L AYE RTY 5:ILS N. NICHOLS ACCM A. MOOR R. J R.'
(2023633-3500 BCBERT M. PURL CliRN N ARD O. BECM HOEFER C,'
.g January 7, 1985 o..um. m Secretary.
U.S. Nuclear Regulatory Commission Washington, D.C. 20555 In the Matter of Philadelphia Electric Company (Limerick Generating Station, Units 1 and 2)
Docket Nos. 50-352 and 50-353 C L_
Dear Sir:
~
On January 3, 1985, the Honorable Isaac S. Garb, Judge of the Court of Common Pleas of Bucks County,'
entered an " Adjudication and Decree.Nisi" in the case of
.Sullivan, et al. v. County of Bucks, et al., Docket No.
84-8538, and in North Wales Water-Authority, et al. v.
Neshaminy Water Resources Authority, et al., Docket No.
84-3273.
In essence, the Court ordered the County of Bucks and the:Neshaminy Water Resources Authority to complete the construction-of the Point Pleasant pumping station and related facilities.
Information copies were provided to the Licensing-
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Board on January 4, 1985, during the hearings in the captioned proceeding and to the counsel for_the_ Federal Emergency Management Agency, the Nuclear Regulatory Commission staf f, the Pennsylvania Emergency Management l
l Agency, and to Mrs. Zitzer, the representative of L
= Limerick Ecology Action and Friends of the Earth, t
Accordingly, information copies are-being provided to the Appeal ~ Board, the Secretary, and to the City of Philadelphia.
Sincerely, 8501100259 850'107 gDR-ADOCK-05000352 L
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PDR Tro Conner, Jr.
TBC/ac
' Enclosures Appeal Board-cc: :
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City of Philadelphia
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Service List (w/o encl.)
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COURT OF COMMON PLEAS OF BUCKS COUNTY - CIVIL n
I No. 84-8358 DANIEL J.'SULLIVAN, et al-Y.
COUNTY OF BUCKS, et al e
N No. 84-3273 I
NORTH WALES WATER-AUTHORITY, et al V.
NESHAMINY WATER RESOURCES AUTHORITY, et al I
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ADJUDICATION AND DECREE NISI..
t This is an action in equity instituted in November, L
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.1983 by Daniel J. Sullivan as in the sature of a class action suit on behalf of all of the taxpayers of Bucks County to
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enjoin the BucNs County commissioners from implementing Ordinance l
No. 59.which they had adopted.
Pursuant to Sullivan's recuest
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for a temporary restraining ord'er a hearing was held'at which time Philadelphia Electric Company (PECO) and North Penn-and North Wales Water Authorities (NP/NW) were permi.tted to 1
. intervene on,the side of the plaintiff.
The temporary restraining order was denied. See Sullivan v. Bucks County, 43 Bucks Co.L. Rep.
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183 (1983).
Thereafter both PECO and NP/NW filed complaints of their own in this same action, the object of which was to secure an order of court to require that Bucks County and NWRA compl'te the construction of the Point Pleasant water e
diversion project.
The County and the Authority filed extensive prelitainary objections to those complaints which, for the most part, were denied by our opinion and order in Sullivan
- v. Bucks County, 44 Bucks Co.L. Rep. 242 (1984).
Thereupon, discovery was completed pursuant to a schedule mandated by l-the court and extensive hesrings were held during the months of July and August of.1984.
The notes of testimony of those hearings have been transcribed, requested Findings of Fact, Conclusions of Law and briefs have been filed and we herein 4
, enter our. adjudication in this mattet.
The adjudication and decree nisi will be entered pursuant to Pennsylvania Rule of Civil Procedure 1517 and the Findings of Fact will be set forth in narrative form.
Essentially,.the issues which must be addressed and i,
resolved are as follows:
(1) Whether there are contracts I
or contractual relationships between and among thw yarious 1
Ordinance 59 was enacted by the Board of. County Commissioners for the purpose of taking over the project of the Neshaminy Water
' l Resources Authority (NWRA) relating to the water diversion project j
at Point Pleasant under and oursuant to the Municipality Author,ities Act of 1945 and specifically 518 (A) of that'Act.. See the Act of July 10, 1957, P.L. 683, $3, 53 P.S.5321 (A).
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parties to this action; (2) Whether those contracts are
- enforceable: (3) Whether some or any of those contracts have been b' reached; (4) If there are enforceable contracts which have been breached what is the appropriate remedy.
FINDINGS OF FACT PECO is a public utility corporation organized and existing under the' laws of the Commonwealth of Pennsylvania.
4 Both NP/NW are municipal authorities organized and existing under the laws'.of the Commonwealth of Pennsylvania, each in the business of supplying water for public use within its respective service area which consists, in each case, primarily
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of a portion of Central Montgomery Cosnty and also a portion
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of Central Bucks. County.
Bucks County -is a county of the- -
third class and the Neshaminy Water Re' sources-Autho,'rit 2is--
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a municipal authority originally created by the Commissioners of Bucks County.
PECO is constructiSg the Limerick generating station, a 2 unit nuclear generating station located near the Schuylkill River at' Limerick, Pennsylvani.a and is designed to generate and ' supply electirical power for public use,.
The operation of this facility requires the consumptive use of substantial quantitie's of water for' cooling purposes.
The primary source of" cooling water is the Schuylk'ill River.
However, there are variotis regulatory-restrictions on the use of the Schuylkill River which restrict'PECO from using Schuylkill River water several months each year, generally speaking from late spring until
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Therefore a supplemental source of cooling water,
is required when Schuylkill River water is unavailable due to these restrictions.
Beginning in 1969 or 1970 PECO began a series of discussions with the Delaware River Basin Commission (DRBC) for the purpose of acquiring a supply of supplemental cooling water.
The DRBC is an agency created by interstate compact between and among.the states of New. York, New Jersey, Pennsyl-vanik, Delaware and the Congress.of the United States.for the purpose of regulating and. managing the water resources of the Delaware River. basin..As.a result of these discussions it was determined that the best. source of supplemental cooling water would be a pumpintr station on the Delaware River a't Point Pleasant which was -already-in the planning stages as-a project-to provide public-water for Bucks-and Montgomery Counties..
Further studies and planning by PECO, Bucks. County, NWRA, Montgomery County, NP/NW, and others resulted in plans for a coordinated project involving a network of facilities to provide public water for Bucks and Montgomery Counties and supplemental cooling water for PECO as well.
This evolved into the-Point. Pleasant. Pumping Station pyoject at issue herein.
This, project envisioned that. water would.be withdrawn.
.from the Delaware-River at. Point Pleasant and would be pumped through the combined. transmission main, approximately 2.4 miles, to the Bradshaw Reservoir and Pump House.
The path
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of the water would be split at the Bradshaw facilitiy.
Water i ~
for PECO would be pumped from the Bradshaw facility through the east branch transmission main approximately 6.7 miles and from'there discharged into the east branch of the
'Perkiomen Creek.
The discharge water would travel along the east branch and main stem of the Perkiomen for approximately 22.2 stream miles and would be withdrawn at the Perkiomen pump house near Graterford, Pennsylvania where it would be pumped through a pipe line to Limerick.
Water for public usebyBucksandMontgomeryCountieswouldflow'fromthe Bradshaw facility through the north branch transmission main, extending to an out fall into the north branch of the Ne'shaminy Creek.
Various other facilities would bia' constructed to withdraw, treat and transmit such water from the north branch for public use in Bucks and Montgomery f:__
counties.
In order to obt'ain an allocation of wat$r from tlie
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Delaware Rived and to construct and operate the various facilit m, PECO has been required to engage in an extensive
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regulatery process before various federal and state agencies to secure the necessary regulatory approvals and permits.
The Atomic Safety and Licensing' Board of+ the Atomic Energy
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Commission issued an initial decision authoriz'ing 'the issuance of construction permits for Limerick on June 14,.1974... This initial decision included an analysis of the environmental impact of the proposed Point Pleasant project and the various alternatives.
The Atomic Safety and Licensing and Acpeal Board.
affirmed the issuance of these construction permits on March 9, 1975.
On March 29, 1973 the DRBC issued provisional approval
.under 53.8 of the Delaware River Basic Compact for PECO's diversion of cooling water for Limerick including withdrawals i
from the Delaware River at Point Pleasant.
However, at that time, the DRBC prohibited PECO from making withdrawals from the.Schuylkill River whenever the flow as measured at the i-Pottstown gauge is less than 530 cubic feet per second with 1 ' unit in operation or 560 cubic feet per second with 2 units in operation, and whenever river water temperatures below the Limerick plant are above 59 degrees Fahrenheit except during April, May and June provided that the flow as measured at the Pottstown gauge is in excess of 1,'790 cubic feet per second.
On November 5, 1975 the DRBC issued to PECO-final-approval for withdrawals of water-for the Lime' rick plant.
In August 1980 DRBC issued a final environmental assessment for Neshaminy water supply system which conformed its prior favorable appraisal of various compodnts of the Point Pleasant project.
on February 18, 1981 the DRBC issued to NWRA approval for the Point Pleasant Pumping Statilon and combined transmission jj' main along with certain other' facilities to be used.by Bucks and-Montgomery counties in connection with the project.
On february18, 1981-the DRBC*also issued to PECO aoproval for the construction of the~B'radshaw reservoir and pump house and the east branch transmission main.
In mid 1982,the Army Corps of Engineers issued to i
NWRA approval of the components of the Point Pleasant Pumping 6-9
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Station under its jurisdiction.
' In August 1982 the Pennsylvania Department of Environmental Resources (DER) issued a favorable environmental assessment for the Point Pleasant project.
On September 2, 1982 DER issued permits to PECO for certain components of the Point Pleasant project including a dam safety permit for the Bradshaw reservoir, a water obstruction and encroachment permit for the east branch transmission main and a water obstruction an4 encroachment, permit.for the out fall structure i.nto the east branch of the Perkiomen.
DER also issued a permit to NWRA for certain components of the Point Pleasant Pumping Station and combined transmission main and north branch transmission main.
On June 18,.1984 the Environmental Hearing Board of DER affirmed the various permits of DER in all. respects but two, to wit, that DER had not adequately studied the potential erosive effects on the east, branch of a flow in excess of 2 feet per second and that DER had erred in finding that PECO and NWRA were not required to obtain national pollutant discharge elimination system (NPDES) permits for the discharges into the east branch of the P.erkiomen and the north branch of.the
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It is anticipated.that for the foreseeable future PECO l.
will operate only 1 unit at Limer,ick which will require a flow in~the east branch of no more than 2 feet.per second..
On February 12, 1980 PECO and NWRA entered into l
a' written agreement for.the construction and operation of 7_
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i the water supply facility.
By virtue of the construction and operation agreement NWRA agreed to construct or cause to be constructed the Point Pleasant Pumping Station and combined transmission main to provide water from the Delaware River beyond the Bradshaw Reservoir to the north branch of the Neshaminy Creek and to the east branch.of Perkiomen Creek.
This agreement provides.that the. construction of the Bradshaw Rgservoir shall be the sole responsibility,of-PECO but.that water for NWRA shall be stored in and released from the Bradshaw Reservoir as required at no charge to NWRA to. flow through the north branch transmission. main.
The agreement,proyides that the ultimate capacity for the water project shall be 95 million gallons per day (mgd), 49 mgd for-NWRA, - and 46:mgd.
for PECO.
However, the water project! is to be -constructed in phases and NWRA is given the option to construct the initial capacity-of 46 mgd for PECO plus an amount to be determined
.-by NWRA during the design phase of the project to be reasonably required by NWRA for its immediate needs.
Despite the option available to NWRA to'. construct the initial capacity of the l
L first phased project of less than the ultimate -capacity, the i'
agreement -requires NWRA. to construct the -water, intake structure,
-intake conduit, -pump structure, discharge. manifold, and the
' initial 1,600 foot. segment of the combined transmission main at the full ultimate capacity of 95.mgd.
The-remaining facilities are required to be designed to permit their l
future expansion to the ultimate capacity of 95 mgd as part
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of subsequent phases of the water project.
The construction and operation agreement also provides that the north branch transmission main and certain related, water facilities are to be constructed as a part of the first phase project but that such facilities are the sole responsibility of NWRA and therefore not the subject of the construction and operation agreement.
The construction and operation agreement'provides that,PECO shall have thc'right to be.. informed of the project's status, to participate-in project meetings, to inspect the records and construction work, and to review the construction scheduling, design drawings,_ specifications, vendor-selection and designs for major. equipment purchases.
The agreement
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also gives PECO the.right-to make recommendations to-NWRA-on the basis of such review,-but NWRA'is requiredito follow those recommendations _only where the failure totdo so would
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r adversely affe,ct the reliability, construction costs, operating costs, or construction schedule of the Point Pleasant Pumping Station and combined' transmission main and PECO so advises NWRA in writing. Even under~these circumstances, NWRA is not required to follow PECO'.s recommendatbns when'doing so
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would violate.NWRA'.s. obligations under any applicable laws.
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The. agreement provides that operation ~ and mai~ntenance of l
the contract project.are vested solely in NWRA.
The agreement permits PECO to play a role in operation of the contract l
project only where equipment failure or malfunctions, power
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a outages, supply shortages, manpower problems, or other develop-i -
ments adversely affect or seriously threaten to affect ad-versely the reliability of the supply of water to the Bradshaw Reservoir.
Under those circumstances, PECO may take only such a.ction as is necessary to maintain such supply of water and it may.act only to the extent permitted by law and with the consent of NWRA, which may not be unreasonably. withheld.
4 The construction and operation agreement provides that if NWRA_is unable to obtain the. required regulatory approvals
.so that the project cannot proceed, PECO will. reimburse NWRA l
for PECO's proportionate share of all costs related to the project.
Conversely, if PECO is -unable to obtain any. regulatory approval required for Limerick or the related, facilities,
'PECO can terminate.the agreement and shall pay to.NWRA sufficient funds to retire PECO's proportionate share of the first phase project.
While the construction and operation agreement prohibits-l.
assignment by.any party without the approval of the other party, L
it does provide that it shall be assigned by NWRA to Bucks County to the extent necessary to permit Bucks County,to, operate and maintain the project.
The agreement further provides that the
. Bucks County Commissioners shall signify their. approval.of the l
. agreement and the acceptance of its terms and. conditions by t
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. joining in its execution.
A majority of the Bucks County l
l Commissioners did execute the construction and operation
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1 agreement, explicitly thereby signifying the County's approval and acceptance of the contract.
T On January 14, 1981 NWRA entered into a written agreement with Bucks County and Montgomery County entitled "Neshaminy Water Supply System - Water Sales Agreement -
Bucks and Montgomery Counties".
This water sales agreement 4
expressly superceded a previous agreement for the sale of water dated September 21,.1974.
The water sales agreement specifically provides that both Bucks and Montgomery Counties
' anticipate an increased demand within their service areas._
for potable water both for general usage and for fire emergency.
The agreement recuire's' Bucks County to construct or to cause to be constructed by NWRA the Point Pleasant pumping station with-a capacity of 95 mgd.
It provides that-of'the 95 mgd, 46 mgd.is reserved for PECO;in accordance with the construction and operation agreement, and of the L
remaining capacity, 29.4 mgd is reserved for Montgomery County and 19.6 mgd for Bucks County.
The capacity reserved for Montgomery County was intended primarily for,the benefit of NP/NW to be delivered to the public in their; respective service areas comprising portions,of Montgomery,and Bucks Counties.
This agreement also recuired Bucks County to construct or cause to be constructed by NWRA the combined, transmission main.
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first 1,600 foot section of the combined transmission main must have the full capacity for 95 mgd.
The agreement further provides that the remaining 11,250 foot section of'the combined transmission main shall initially have a capacity of 73 mgd, 46 mgd for PECO, 16.2 mgd for Montgomery County, and 10.8 mgd for Bucks County.
This agreement further provides for the construction by NWRA of the north branch transmission main and other facilities, not-to be used by PECO, for the purpose of supplying and treating public water for Bucks and Montgomery Counties.
The agreement provides for the establishment of a management and operating committee, comoosed of representatives of Bucks and Montgomery Counties, given broad powers to administer the operation of the water facilities.
The capacities reserved to Bucks and Montgomery Counties in.the construction and t
operation agreamsnt and the water sales agreement reflected the most accurate information then available to.the parties of the projeeted water needs of those Counties. The capacities reserved to Bucks and Montgomery Counties in the water sales agreement were consistent with the projections of public water needs by DER., There was no evidence of fraud, corruption j
orcollusionofthepartiesinconnection.withth[eprovisions of the cons'tructi,on and operation and water sales agreements.
The Point Pleasant oroject is but one part of a much
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larger undertaking for the purpose of managing, controlling A d utilizing the water resources of this area for flood control, drinking water and recreacional purposes.
This project is the outgrowth of extensive studies conducted by DER, Montgomery l i
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and Bucks Counties, Federal Soil Conservation Service, DRBC and'the United States Army Corps of Engineers for the purpose of evolving and developing a system of management of the water resources of the Delaware and Neshaminy basins.
As a result, DER adopted a plan which was approved by the Governor of Pennsylvania, the Board of County Commissisoners of Bucks County, the Board of County Commissioners of Montgomery County and the Congress of the United States.
That plan recommended th6 construction of 8' flood control dams, 2 multi-purpose dams, and a water supply sy' stem with a water diversion facility at Point Plansant.
The DRBC approved the construction of the 8 flood control'~ dams, the construction of the 2 multi-purpose dams, (Core Creek Park and Peace Valley Park) and' n February 18,
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1981 issued its dock'e't'decis' ion' approving the Point' Pleasant
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' diversion projict.
'Th'eYefore, the keshaminy Water supply system is part of an' overall project which includes the' con'struction of
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8 flood control dams, 2 multi-purpose dams and a water supply i
system.
The Point Pleasant pumping station is a part of the Neshaminy water supply system.
The purposes of'the water diversion plan at Point Pleasant are to make water dh.rectly available to consumers who heed it, and {,urther,.by.the ' sale of that' water, as:a source of revenue to NWRA so that it may retire its bonded indebtedn'es's engendered for the purpose ~of
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construction of the entirety of this project.
The Point Pleasant project consists of the Point Pleasant pumping station, the combined transmission main, the north branch transmission main, the north branch water treatment
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plant, the western transmission facilities.
The Point Pleasant pumping station-consists of a river intake structure at Point Pleasant.
From the pumping station the water flows through the combined transmission main approximately 13,000 feet to l
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l either the Bradshaw reservoir or the north branch transmission main.
The Bradshaw reservoir is a 70 million gallon earthen i
structure which is to be Mtlyconstructed and financed
.by PECO at the junction of Bradshaw and Moyer Roads in Plumstead Township.
The north branch transmission main is
'an underground pipeline of approximately 1 mile from.which i
water. from the combined transmission main or the Bradshaw L
reservoir can be delivered to the channel of the north branch
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of the NeshaminyCreek. ~~ The diverted river water will flow E
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by gravity along 'the north branch' of the Neshaminy Creek-
'into and through Lake Galena to the north branch water treatment plant to be constructed in the Borough of Chalfont.
From the north branch waSer treatment plant the water will be delivered to Montgo'mery County water purveyors NP/NW
-via the western transmission facilities.
i i
l Of the aforesaid-mentioned facilities,the Point Pleasant pumping station, the co[nbined transmission main, and the Bradshaw reservoir are for the joint purpose of public water l
i supply and electric utility use.
The water intended'for electric utility use w[11 be transported by PECO from the l.
l Bradshaw reservoir gnd pump station to the east branch of l
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the Perkiomen Creek.
The water will flow by gravity through E
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the east branch to the Perkiomen Creek where it will be. withdrawn' near Graterford, Montgomery County, and transmitted to the generating station at Limerick.
The segment from and including g
the~Bradshaw Reservoir to Limerick is to be developed independently, constructed, operated and financed by PECO at no expense to Bucks, NWRA, Montgomery or NP/NW.
The. service areas of NP/NW encompass rapidly growing residential communities as well as large numbers of commercial and indtistrial water users, all of which have contributed to the ever increasing need for water in the region.
Their areas
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of' distribution encompass a large portion of Central Montgomery County and a smaller portion of Central Bucks County.
The present sources of water available to North Penn Water Authority include 51 wells and water obtained from inter-connection witih the adjoining Keystone Water Comoany.
North Wales Water Authority presently obtains its water supply from 28 wells and inter-connection purchases from 2 adjoining water.
companies, Keystone Water Company and Philadelphia Suburban-Water Company.
Inter-connections with adjoining water companies 4
are on a "as available" basis.
Therefore in times of water shortages those sources bScome e,uestionaBle.
GrNndwater resources in southeastern Pennsylvania have become extremely strained from overuse and from contamination with many water suppliers having great difficulty in supplying their customers.
DER has imposed strict permitting requirements on ground water development in the NP/NW area ~so'that water e
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tables are not. unduly lowered, stream flows are not' diminished and existing wells are not depleted.
DRBC'has identified a portion of southeastern Pennsylvania as a " ground water protected
. area" and has imposed restrictions on the utilization of ground water in this region.
The NP/NW service area is in the heart of the ground water protected area.
The likelihood of developing additional ground ~ water resources in the NP/NW area is slight.
NP/NW has experienced water shortages-for a number of years.
There is a projected progressive increase in demand for water in the entire NP/NW service areas.
During the. planning stages of this project ~and' prior-to the execution of~the water sale.s; agreement, NP/NW furnished Montgomery Ccunty, Bucks County and NWRA with their need~
projections which'projeetions were-utilized in-order to determine the amount of water to be received by Montgomery Count.y
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under the water sales agreement of January 14, 1981.
In order to satisfy.their present and projected needs for water, on January 14, 1981 NP/NW entered into agreements i.
with Montgomery County for a supply of surface-water to be rece'ived from the Point Pleasant' project.
The NP/NW l
contracts with Montgomery County were entered into simultaneously f:
i with the execution of the' water-sales agreement between NWRA, Bucks and Montgomery' Counties on January 14, 1981.- Montgomery i-I.
County executed the water sales agreement on the condition that NP/NW and Montgomery ~ County agreements be executed
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l simultaneously, The water sales agreement is an exhibit appended.to each of the contracts entered'into between NP/NW.and Montgomery County.
Under the provis. ions of the NP/NW and Montgomery County contract, NP/NW.are entitled to purchase from Montgomery that amount of water necessary to meet their forecast needs through theLyear 2020.
Montgomery County itself operates no water treat-
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'.mpnt or delivery facilities whatsoever and the contract between Montgomery County, Bucks County and NWRA, the water sales
,s agreement, was clearly' entered into for the direct benefit of NP/NW.
Representat[v'es of NP/NW participated' in the
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negotiation of a water' sales' agreement of 1974 which was superceded by the agreement of January 14, 1981, were involved l1
' in the negotiations leading up to the agreement of January 14, l
1981, and p'articipated in~mee' tings attended by repr'eie'n'tatives
~
of NWRA, Bucks and Montgomery Counties wherein the. terms
'of the water sales agreement were developed and discussed.
t 1 The involvement of NP/NW representatives in the contract negotiations and development of this project. spans a period l
of more than 20 years.
The' state water plan designates NP/NW as, beneficiaries of the Point ~ Pleasant project.
. NWRA c'ommenced construction of the Poi'nt Pleasant pumping station on January 1'0, 1983.
On May 18, l'983
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l the -Board of County Commir.bers of Bucks County sent a
-letter.to PECO purpor.i.y 'r :erminate its contrach with PECO to; operate the Point PleMant pumoing station i.
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f pursuant to the construction and operation agreement.
On the same day the Board of Commissioners sent a letter to NWRA purporting to withdraw its approval of construction contracts for the Point Pleasant pumping station and combined transmission main and demanded that NWRA immediately terminate construction.
A letter was dispatched on that day from the Board of County Commissioners to the Board of County Commissioners of Montgomery
, County, likewise purporting to terminate Bucks County's obligations
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to supply water under'the water sale ~s agreement.
A 30-day moratorium on construction was imposed but construction was re-commenced thereafter.
t On November 18, 1983, after construction had been
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resumed, the Bucks County Commissioners passed Ordinance No. 59 which purported'to" require NWRA to' convey the Point Pleasant
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" project to Bucks' County.
In the interum, PECO had' entered into a separate agreement with the Morgantime Corporation, the j
prime contractor on the' job, to expedite certain river work.
Such was done with the kncaledge and consent of NWRA.
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On February 9,1984 NWRA ordered a-second suspension of all construction os the project and since that date no construction of the pumping station or'the combin'e'd transmission main,has occurred except'for certaid' river and cana1 work recuired to be performed to protect the site which'was done 4
. pursuant to an order of this court dated March 2, 1984.
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On March 22, 1984 the Board of NWRA passed a resolution which in substance recited NWRA's position that there were
' ouestions concerning the validity and enforceability of the construction and operation agreement and the water sales agreement and that NWRA did not intend to proceed with the constructio'n of the Point Pleasant pumping station and combined transmission main pending a final judicial determination of the validity of-the agreements.
The resolution suspended all work on the project for a' period of 90 days effective upon written confirmation of the comcletion of the work
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- recuired by the order of this court dated March 2, 1984.
On June 20, 1984 the Bucks County Commissioners passed a resolution directing NWRA to' delete the Point Pleasant pumping station and combined transmission main ~from NWRA's
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water supply ~ program'.
As a prerequisite to'the issuance of an operating license by the National Regulatory Commission (NRC), the successor to the Atomic Energy Comedission (AEC), the licensing body for the operation of' Limerick, an extensive-environmental
-impact study had been done with respect to the Point Pleasant project as a' source of' supplementary cooling water.- If some alternative' application were to be made by PECO for
- some other source, it -i.s -likely--that--a new environmental impact study would be reouired.
~An' environmental' study requires and consumes a' great deal of time, effort and money.
If supplemental' cooling water is not available
_1g_
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,,_v-
when Limerick unit number 1 becomes operational, it will not be able to operate on those days when the flow and temperature of the Schuylkill do not meet-the regulatory recuirements heretofore set forth, generally the eeriod from late soring to early fall.
Accordingly, absent the facilities at Point Pleasant, there would be a substantial risk of material
- interruption of the operation of Limerick unit number 1.
~
~
I.t.is impossible to predict with any assurance how the
- unavailability of water from Point Pleasant will affect the ongoing proceedings before the NRC on PECO's application for a full power operating. license.
Failure to complete ~
the Point Pleasant pumping station.and comblnad transmission
~
main could prevent--for an indeterminate period of time, the
' commercial operation ~of Limerick number 1.
-A delay in the licensing or commercial operation of Limerick number 1 would
[
impose substantial added costs on PECO, the exact extent of which cannot be predicted at this. time.
There is no assurance that PECO will be able to obtain an alternative source of supplemental cooling
~
water in the absence of the Point Pleasant proie,ct_.
There is no evidence to indicate that either DER,.DRBC or~
2 l
-the Unites' States Corps of Engineers will' authorize
-withdrawal oi water from' Blue' Marsh-Reservoir-in Berks ~
L -
' County or a relaxation of the reciulatory restriction
~
on PECO's withdrawal"of water from the Schuylkill River when the water temperature exceeds 59 degrees Fahrenheit..
~y v
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There is no evidence that the Philadelphia Suburban Water l~
Company would be willing or able to commit itself to sell adequate quantities of water to PECO at the times when PECO would require it for supplemental cooling purposes.
Although the water commissioner of the City of Philadelphia l
has expressed a preliminary willingness to sell treated water.to PECO, PECO does not require treated water for
,its cooling purposes and the purchase of treated ~ water wohld be extremely expensive.
Both Bucks County and the NWRA have cicarly and unequivocally manifested their intentions not to proceed
~
~
with this project regardless of the contractual provisions 1.
~
to which they have' committed themselves.
~' DER flas determine
'th t h e' Point' Plt.asant projh[t -
~
~
is thin most 'fe'asibTa, c' st effectl e' and erivir55~mihtilly e
safe method of meeting the drinking water needs?of~the l
service areas of NP/NW.
Although several possible alternatives
-have been identified, (including the Evansburg Reservoir
. which will probably never be built), none of them have ever been' approved by DER.
'~~ ~
i' DISCUSSIONS l.
.'A signigicant coritention of both Bucks. County
~
~
t and NWRA is that these contracts, specifically the con-
~
. struction contract and the water sales agreement,'are unlawful as relates to both the County and the Authori~ty,
~
therefore ultra vires, and therefore unenforceab1e under the -
--e
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g
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t doctrine of Price-v. Philadelphia Parkinc Authority, 422 2
Pa. 317,-221 A.2d 128 (1966).
This issue formed the main thrust of the preliminary objections to the complaints of both PECO and NP/NW in this matter.
We dealt extensively with that issue in our opinion dismissing the preliminary objections and see no occasion to re-state at length what we stated therein.
Rather, we will incorporate that opinion i
by reference and make it a part hereof for purposes of this issue.
None of the evidence presented at the trial of
'this matter convinces us.to. deviate from our original determination regarding the legality and enforceability of these. contracts.
As we determined at the time of our disposition of the preliminary
~
objectionsf, the. Point Pleasant. water diversion project is but a part of a much larger undertaking which has been in the planning and development stages for approximately 20 years involving r
permits from a variety of administrative agencies including e
~
DER, DRBC, the United St'ates Army Corps of Engineers, as well as the Board of County Commissioners of Bucks and 2
Not only are their positions similar,but they.-are identical by virtue of the county adopting those portions of NWRA's bri'ef, which is substantial, directed to this issue.
They apparently agree on most other-issues even to the point whereb'y.several of the footnotes in each brief are identical.
4 7
<e e
..,e.,
-e
- o i
Montgomery Counties and NWRA and NP/NW.
Bonds in substantial amounts have been issued, 8 of 10 dams have been built, 2 county parks have been developed, the parks have been leased by the Authority to the County and those leases lodged as. collateral with the bond trustee to secure the bonds themselves.
The water project was approved by all of the administrative agencies after extensive study and projections made regarding the water resource needs of the area including the distribution areas of NP/NW as well as the supplementary water coolant needs of PECO.
When one considers the projections and the allocations of the water itself for use as a potable water supply, it is absurd to contend that' tlie sole purpose of this project is for the priv' ate interestbs of 'PECO.
PECO is indeed an important
-customer, but it must be remembered that-the sale of water constituted an-important 7 art of the ecuation with respect to the' financial viability of the entire project which serves not only - PECO's needs but also the water needs of
(
the oeoole in the Montgomery Count'y communities.
l.
Defendants again contend that even aside from the-ultra vires argument arising from the application of Price
- v. ~ Philadelphia ParkincJ Authority, supra, this contract with PECO likewise constitutes a violation of Article -3, 531,
~
and Article 9, 59 of the Pennsylvania Constitution.
Those I e e
b e
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issues were addressed extensively in our opinion at 44 Bucks County Law Reporter 242 and, once again, nothing that we heard at the time of this trial derogates from our conclusions reached at that time.
Suffice it to say that considering the importance of this facility to PECO and its operation of its Limerick plant, together with the importance of PECO to the projact as a major purchaser of water, it is not surprising that the contracts between PECO and NWRA sho'uld have reserved to PECO some right to participate in the planning and oversite of the construction project itself.
~
There is absolutely no evidence on this record to indicate
~
?any overbearing on the part of PECO in the course of that
~
construction.
It is conceded that PECO contracted independently with Margantime Corporation', the prime contractor, to expedite
.. :=.
certain of the river work at a time when winter was approaching, recognizing the limited periods of' time during which* the contractor could work in the river.
This 3
was done with the full knowledge and concurrence of NWRA.
i L
3 l
-Through the course of these proceedings the parties tend l
to forget' that NWRA is an ongoing body, and regard).ess of the membership of its Board, acts as a corporate body with L
-continuing authority.
It is the same.NWRA which consented to the' contract between PECO and Margantime as,the Authority which now objects to-it. 'The same observation might be made r-L with regard to the relationship between Bourquard Associates l'
and PECO.. Bourquard, as creviously noted,*was.the engineer on-this project until recently.
It likewise'had an independent contract with PECO which was known'and acquiesced in by NWRA..Under those circumstances there would not aopear-to be anything improper in that relationship.
It was only when NWRA became antagonistic to PECO that Bourcuard developed l
a conflict.
?
[,
- r-Although clearly it was an advantage to PECO to have the project _ funded by the use of the borrowing powers of the Authority, it must be remembered that this was not a project solely for PECO, but likewise for NP/NW and any other water customers which may be developed.
Therefore, and in view of the fact.that the project was to be constructed by NWRA'as a part of the overall project heretofore described, and ultimately to be operated by Bucks County, it is_not surprising that it should be-funded by the sale of tax free, therefore low cost bonds.- We do not believe that those circumstances in any way demonstrate unconstitutionality of the contracts.
Any contention-that PECO has no financial, investment in this project,is unrealistic.
The obligation of the
~
Authority under these contracts is limited to the construction of the intake facility,at Point Pleksant, the combined, transmission main, so that the water may,be deliv_ere.d to the Bradshaw Reservoir.
PECO is obligated solely at its own expense to construct the Bradshaw Reservoir, the pump house and pumps at that reservoir and the transportation of.the water from Bradshaw to its facility at' Limerick.
Furthermore, it is the sole responsibility.of P.ECO.to build Merrill Creek facility in New Jersey to supplement i
the Delaware River flow.
We likewise dealt with the argument relating to the
" force mageure" provisions of the contract in our previous opinion.
Once again, the imoossibility posited is the fact that Bucks County may refuse to condemn the property.
1
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s necessary for the completion of the project.
Quite obviously, t
we assume that if Bucks County should be ordered to comply with its contractual obligations, it would do so, and there-fore the force mageure provision would be a nullity.
We are satisfied that these contracts entered into by the Bucks County Board of County Commissioners do not violate the principle that the governmental body may not bind or encumber its successors in their governmental
. functions.
Without more we do not believe that the undertakings
~
of the County Commissioners in this case are governmental at all',
'but rather are-proprietary.
-It is true that we have.previously held that the Point Pleasant-project is but one small part of the overall project involving flood control, drought control, I
drinking water and. recreation as a result of the: construction of the vari'ous facilities heretore described. However, as previously noted, most'of these facilities have been completed and are in place.
We have never stated and the inference should I.
notbedrawnthatwebeliNvethattheremainderoftheentire undertaking cannot remain viable without th_e construction of the Point Pleasant facility.
However, the entire planning and develop-ment of the concept included the Point Rleasant fatility and in fact was specifically so-recognized in the bond indenture docume'ts themselves.- Thirefore, at this point, we are dealing n
merely with-the construction contract and the water sales t
i e
e 9
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l agreement between Bucks and Montgomery Counties and in terms of those contracts the County, in our opinion, is acting 4
entirely in a proprietary function.
Under the provisions of the water sales agreement it was provided that the County shall use its best efforts to obtain from public or private water supply and distribution agencies and from any consumers of large~ouantities of water written contracts for the purchase of all water available for such purposes from the reservoir and park systen.
of course, the water diversion project at Point Pleasant will furnish water to the Bradshaw Reservoir, some of which.would be useck for this p'urpose.
In that role, we Are' satisfied that the Authority and County are acting solely in their proprietary functions.
A municipality acts in a proprietary. capacity if~it_ owns and operates facilities to furnish water to its inhabitants.
Borough of Pleasant 1
Hills v. Jefferson Township, 375 Pa.'431,.100 A.2d 720 (1953).
See also Hamilton's Apoea'1, 340 Pa. 17, 16 A.2d 32 (1940).
From the foregoing we.have stablished that to our satisfaction these contracts are lawful and enforceable.
~
[
4 i
The County has never stated that it wished to withdraw from L
the total project on the basis of governmental function ~or any other basis.
It.ils. argued that Bucks County.has.no.need for the water because all of~ Bucks' needs will come'from Lake Galena.
of-course, Lake Galena was created as a part.of this entire
-' ~~
water management project.
I, i
t.
S t
l l
m.
PECO, as the contracting party with NWRA in the construction agreement clearly has standing to enforce or sue for the breach of that contract.
We are satisfied likewise that t
NP/NW has standing to enforce the water sales agreement which,
'of course, is inter-related with and inextricable from the construction agreement.
By the same token, we are satisfied that PECO has standing to enforce the water sales agreement as well.
We believe that both -NP/NW and PECO are third par'ty beneficiaries to each of 'th'ese con ~ tracts.
We suopose that the more-difficult cuestion is the third party beneficiary status of NP/NW to either of these contracts because they were not direct parties to either.
However", it will be remembered that the water sales agreement was si-gned between Montgomery County.and Bucks County and NWRA.'2 Montgomery County doe's
~
not now, did not then, and neve~r has, so far as th'is record shows, maintained or operated any water treatment, delivery or sales facilities.
Therefore, Montgomery County had to be contracting on behalf.of someone.. From the very same date that the water sales agreement was signed between Montgomery l
and Bucks Counties the agreements were signed between' Montgomery
~
l County and these two water authorities.
In fact,'the water sales agreement of Montgomery and Bucks Counties was apoended p
as an exhibit to the. contracts between NP/NW and Montgomery County.
l Both' authorities have been a part of the olanning and develocment process of this water project from its inceotion.
In fact at one point,.on their reauest, the develonmental discussions were L-_
m halted while NP/NW reconsidered their positions.
They ultimately returned to those discussions and participated to the en'd of the discussions, development and planning.
There is no doubt in f
our mind that the only beneficiaries directly contemplated by Montgomery County.in its contractual negotiations and ultimate contract with Bucks and NWRA were these two water authorities.
It cannot.be contended that Bucks'and NWRA were unaware of the proposed beneficiary status of these two authorities be'ause of the.long-history both Bucks and NWRA had-in the c
planning process with -both of.these authorities.
In short, all three parties, Bucks,: Montgomery and NWRA entered.into the water sales agreement with their eyes wide open fully recognizing that two of the mafor beneficiaries of that agreement were 4,
these two water authorities.
Therefore we are satisfied that under the. concepts. of.Guv v. Liederbach, 501 Pa. 47, 459 A.2d 744 (1983) NP/NW are -third party beneficiaries tq the water sales agreement.
Obviously as a contracting earty to the water sales agreement, considering its unavoidable relationship to the construction contract, they therefore have standing in this lawsuit to enforce both of those contracts.
The same applies, in our. view, to PECO Nifh respect to the water sales; agreement.
.By the provisons-of;that agreement it is abundantly clear that everyone understood and contemplated that PECO was to be a major customer and purchaser of water.
In fact, it was recognized by all that.
e i
P PECO was not only a major customer and user, but that this source of water was absolutely necessary to the operation of the Limerick plant.
Considering that and all of the other contracts involved, we are satisfied that once again, under the concepts of Guy v. Liederback, supra, PECO is likewise a third party beneficiary to the water sales agreement.
Having found that NP/NW are in fact third party beneficiaries to this contract, and PECO is likewise a third party beneficiary to the water sales contract, then it is
~
abundantly clear that they both have standing to enforce these contracts.
See Fitzoerald v. Kwaterski, 318 Pa. 494, 178 A.2d 384 (1935).
See also 5307 of the Restatement of Contracts.
The question of-estoppel was discussed both at.
the preliminary object, ion stage and at trial.
For purposes of that discussion both defendants have assumed the ultra vires nature of these contract,s and therefore argue that the estoppel principle does not apply.' See Central Storace and Transfer Company v. Kaolan, 487 Pa. 485, 410 A.2d 292 (1979).
Be that as it may, we have now found that these contracts are lawful.
Aa such, we are satisfied that neither the County-nor the Authority may disclaim their own contractual obligations and are therefore estopped to deny that they are bound by their. contractual obligations.
The fact that the County is a governmental agency and the Authority a creature of that governmental agency is i
e i 1
irrelevant.
See Philadalchia v. Fidelity Philadelnhia Trust Comoany, 358 Pa. 155, 56 A.2d 99 (1947) and Henrv Shenk Company v. Erie Comoany, 319 Pa. 100, 178 A. 662 (1935).
Both PECO and NP/NW proceeded in reliance upon these contractual obligations of long standing.
Estoppel is an eauitable doctrine.
Where one proceeds in good faith in reliance upon the contractual' obligations of another, the doctrine trill preclude th's other party from denying his contractual obligations.
Amunicipality,b.ikeaprivatecorporation,
.is subject to the doctrine of estoppel.
Albright v.
The City of Shamokin, 277 Pa.' Superior Ct. 344, 419 A.2d 1176 (19'80).
The next, and perhaps the most fascinating question is the matter of relief.
PECO and NP/NW essentially seek
^
specific performance of the construction and water sales agreements.
The defendants contend that specific performance is inappropriate.
Under certain circumstances a court of equity in Pennsylvania is empowered to enter a decree of specific performance, specifically to order that a party to a contract actually perform the contract as,oppsed to
~
paying damages for the breach thereof.
Such a decree is proper where the evidence establishes that the plaintiff is clearly entitled to relief, where the traditional remedies-are inadequate and where the ends of justice will be served
-31 I.
1 0
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by requiring the performance of the agreed upon promise.
See Clark v. Pennsylvania State Police, 496 Pa. 310, 436 A.2d 1383 (1981).
Specific performance of a contract by a court of equity is a matter of grace and not.of right and will not be granted where there is an adequate remedy at law.
Roth
- v. Hartl, 365 Pa. 428, 75 A.2d 583 (1950).
In quoting from City Stores Co. v. Ammerman, 266 F. Supp. 766 (D.D.C. 1967) aff'd, 394 F.2d 950.(1968).our Superior Court in Easton
~.
- Theatres v.' Wells Fargo Land and Mortgage Co., Inc. 265 Pa. Super. 334, 401 A.2d 1333 (1979) held as follows:
"'The foundation and; measure of the jurisdiction is the desire to do justice, which the legal remedy would fail to give..,.
The jurisdiction deoending upon this broad principle is exercised in two classes of cases:
1.
Where the: subject-matter of the. contract..,
is of such a special nature, or of such a peculiar value, that the damages, when ascertained according to legal rules, would not be a just and reasonable substitue'for or representative of that subject-matter in the hands of'the party who'is entitled to its benefit; or in other words, where the damages are inadecuater 2. -
Where, from some special and practical features or incidents of the contract inhering either in its subject matter, in its terms, or in the relations of the parties, it is impossible to arrive at a legal measure of damages at all,..or
'at least with any sufficient degree of certainty, so that no real compensatim_ can' be obtained by means of a,n action at law; or in other words, where
- damages are. impracticable..'";. (italics, from origina1)
Where there is substantia 1. uncertainty as to the l
existence of an adequate remedy at law, the' action may proc,eed in equity. 'When from the nature and complications of a given case a full and complete remedy 'cannot be afforded, equity 2
E
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i will grant relief.
Kinesley International Pictures Corn. v.
Blanc, 396 Pa. 448, 153 A.2d 243 (1959) and Pennsvivania State Chamber of Conumerce v. Torcuato, 386 Pa. 306,125 A.2d 755 (1956).
We are satisfied that there is no adequate remedy l
at law in this. case.
Obviously, the adequate remedy which 7 omes to mind is money damages.-
In the case of-PECO the money damages, if_they. wore to.be computed, would represent an[ time during-which -the. Limerick facility.could not be operated due to the lack of a supplementary cooling water source.
As.we now know under the present restrictions on the use of Schuylkill River water, there would be approximate 1y 159' days a year during which the facility could,not be used.
Even recognizing that there would be some; period of time during which.the: facility would be down either for maintenance or recharging of the nuclear fuel, there would still be a significant number of days per year during which the facility could not be operated.
We' have had some testimony regarding the damages flowing from the. inability to ouerate Limerick l
- at'the present time.
Defondants' arguments, however, are f
that'onom k.imeridt is included in the rate bass, those' damage's would no ' longer' be applicable..Perhaps. that is true.in the.-
strictest sense, but there is no doubt that certain damages
(.
would flow from any-days during which the Limerick facility
~
could not be operated-after it has its full operating P
4 9
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license and is in the rate base because of the increased cost of generating electricity using traditional fuels.
The mere fact that it is in the rate base merely means that the costs of operaton are being defrayed among all of the customers of the utility.
However, once that determination'is made, we would presume that if the facility is shut down at times when that is not anticipated, those days would constitute a loss of revenue.to the utility.
We can perceive no way at the present time that those damages could be calculated.
Furthermore, we have no way of knowing how long a period of time will lapse until some. source of. alternative cooling water could be secured, assuming ~there is one.
There is likewise great uncertainty over whether an operating license would be afforded at all by'the NRC if this project is totally foreclosed to PECO.
We are satisfied that upon that eventuality there would be
(
a reconsideration by the.NRC as to whether to issue such a license in view of the $act that it was within the context of the operation of the Point Pleasant, project that the license was issued in the first instance.
If that license is not issued then we have no way of knowing on this record, and coul'd not possibly establish, whether PECO cani secure an alternate source of supplementary cooling water which would satisfy.the NRC.
Quite obviously, even if an alternate source
-is identified, assuming there is one, we believe that a new environmental impact, study would be required.
The time necessary 34 0
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for all of this to occur is anybody's guess, but we do have some experience from the time that it took in order to secure the licenses have been issued to this date.
In this context we are talking about many years.
Therefore, we are satisfied that i
the damages cannot possibly be established with any degree of accuracy at the present time.
The same applies.to the claims of NP/NW.- Although various alternative sources of water have been identified, there is nothing to indicate on this record that appropriate licensing could be secured from DRBC or DER or, even if
' h'ey could, how.long such would take.
In fact one of the t
proffered sources was the Evansburgh Reservoir which has~
not been built and on this record it appears probably never will be built..
It is an anomaly in this case that the defendants argue great difficulty in securing the permits PECO still recuires, but that any permits they may need for alternative sources will come with great ease..However, there is no evidence l
in this case to substantiate those contentions.
On this l
record, all indications a~re that the regulatory-agencies would not approve the alternatives-suggested by defendarits.
We do not believe that either of these plaintiffs can l
l be ' faulted for their failure to have secured, or attemnted 5'
[
to secure, alternative sources of water up to the present time.
I i
5 Of course, the question of licensing or permitting alternative sources of water is for the administrative agencies, not this court.
j.. p
4 It must be remembered that the project was only shut down finally-in February of 1984.
By that time this lawsuit had already begun and was moving ahead.
It is true that on May 18, 1983 the Bucks County Commissioners notified everyone in sight of their intention to attempt to cause termination of this project.
However, although NWRA did impose a 30 day moratorium on construction, it then.: ignored that admonition of the County Commissioners and proceeded with construetion.
The_construetion cor'stinued until November of 1983 at which time the County enacted its ordinance number 59-ostensibly for the purpose of taking over the project and stopping it.
It was'at this point that this lawsuit began but the application for temporary restraining
- order to restrain the County from implementing its-ordinance number 59 was denied.
Notwithstanding that the-County never did implement its ordinance number 59 and attempt to'take'over the project and stop it, it was not until February of 1984 t
that the Authority finally shut the project down and even then permitted it to continue for approximately 6 weeks and 6
longer in order to secure some of the work already completed.
Considering the time involved, we do not believe that i
the failure of either of these plaintifYs to attemot to secure an alternate : source of water 'in any way works a waiver of their rights-in this lawsuit.
PECO has a substantial financial 6
It is interesting to note that although that work was done purportedly pursuant to the order of court of March 2, 1984, the work which was authorized by NWRA
- s significantly more extensive than that which our order specifically authorized.,
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interest in this project inasmuch as it is obligated to construct the Bradshaw Reservoir and transmission mains from Bradshaw to Limerick-to say'nothing of Merrill Creek in New Jersey.
That there are possible alternatives, in our opinion, is beside the~ point.
We would assume that there are alternatives for almost anything except death and taxes.
The cuestion is where are they to be found, how are they to be developed, with what difficulty and at what expense, over what period of time, and in this age of administrative tribunals, what permite would be' required.' In short, PECO and NP/NW put all their eggs in one basket because it was the only basket they had.
That PECO is'not~able to-begin using Delaware River water
~
because of the possible necessity'for permits to-discharge Delaware River water into the north branch, or because Bradshaw is not yet built and authorized by the PUC is,.likewi'se, of
.no moment.
A project.such as this has to-be built one step at a time and if every other' permit _and. requirement is a sine qua non to each other then a oroject of this magnitude could never be built.
The parties obviously contemplated that all permits would 4
not be in place at the time of construction of Point Pleasant in view of the provisions in_ the contract regarding withdrawal l
l in tNe event necessary permits are not l'usued.
- ~ ~ ~
NWRA takes the enigmatic position that delay or cancellation f
of the project will'not jeopardize the Limerick operating permit.
On the other hand, it argues there is no occasion to order the construction of the pump because there is no assurance that the permit will'be granted.
Quite obviously they cannot 9
have it both ways.
The regulatory permitting process is a long and tortuous one.
This fact alone is probably the best argument for holding that neither PECO nor NP/NW are anyway remiss in their obligations for failure to seek and attempt to secure alternative sources.
They have been swimming in these turbulent waters for so long that no one can blame them for refusing to take another plunge.
It is true that the defendant in an action for breach of contract. is not responsible for any injuries that could have
.been avoided through reasonable efforts of the plaintiff.
This is the concent of mitigation of damages.
However, the party who has breached the contract or caused the loss has the burden of showing that the losses could have been avoided through the reasonable efforts of the. damaged party.
State Public Building Authority v. W. M. Anderson comoany, 49 Pa. Common-wealth Ct. 420, 410 A.2d 1329 (1980) and Williams v. Masters Local No. 2, 384 Pa. 413, 120 A.2d 896 (1956).
Defendants 1
i have failed to prove in this case that there are any reasonably available alternative sources of water for 'these plaintiffs in the sense of their being available to them for,the,ir purposes, being adequate and sufficient, and being appropriately licensable or permittable by.the. relevant administr,ative agencies., Although the evidence may indicate that there are some possible alternatives, I
as for example by the use of the Blue Marsh Reservoir or the l
I.
l l'
I
]
r i'
p elimination of the 59 degree temperature restriction, there 7
is absolutely nothing on this record to indicate that either 7
would be permissible.
In fact, all of the evidence seems to i
indicate that neither DER nor DRBC would be amenable to such proposals although the County and NWRA have been attempting to accomplish just that for almost a year.
Therefore, there is no basis on this record from which a conclusion can be drawn 8
that plaintiffs have failed to mitigate their damages.
For the foregoing reasons we are satisfied that there is no adequate remedy at law and that a decree of snecific l
performance must be entered.
Lastly, the defendants contend that NP/NW.are limited in their relief to the provisions of the contract which provides w
l that upon default their,only remedy is to take over the project itself.
of course, short of something in the contract to i
..r..
7 There is evidence to show that representatives of PECO made numerous references to bond rating agencies such as Standard and Poor to the effect that if Point Pleasant were not con-structed alternative sources of cooling water would be found.-
It is not surprising that PECO should attentot to paint a rosy picture for the financial community in order to be able to l~
enjoy a favorable interest rating in the bond market.
- However, the more statements to such effect by the representatives of l
i PECO hardly establishes the fact ttat there are' viable alterna-i tives.
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8 It is argued that PECO was aware at a relatively early date of strong public opoosition to the project and-therefore cannot be excused for failing to seek alternative sources of water.
of course, PECO had no way of knowing that the oppositilon would in vact cause the discontinuance of the project.
Furthermore, it can probably realistically be observed that any alternative l-for which PECO sought' licensing, would meet with the same type of public opposition as mounted over this. project.
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indicate that this is an exclusive remedy, we conceive that this is a remedy in conjunction with any and all legal remedies which the law say allow.
See Galt v. Seaboard construction Co.
375 Pa. 613, 101 A.2d 752 (1954).
In any event, the relief i
which we wi'11 afford to NP/NW will be and is consistent with the specific provisions of the contract.
With regard to,the relief sought by NP/NW, in the course of the trial they declared their desire for relief unde'r and pursuant to paragraph 5, page 7 of the water sales agreement.
That paragraph, in relevant part, provides as follows:
"In the event Bucks.and Authority after._.
the execution of.this contract fails, through its own neglect, to promotly pursue the project.
Montgomery shall have the option of terminating this agreement by civing. Bucks six (6) months:
notice of its intention to ao so in which event Montgomery shall not be liable to Bucks and.
Authority for any cost incurred to the date of termination.
Montgomery shall have the further right or option to undertake the completion of that portion of the project necessary to sucoly water to Montgomery." (Italics furnished)
That is preci'sely what NP/NW propose' to do.
As we have previously found, they have the right to stand in the shoes,of Montgomery in terms of enforcing this contract and benefitting from the provisions thereof as third party i
beneficiaries, see Guy v. Liederbach, supra.
Montgomery County is fully aware of'this proposal, it havino been made a party to this lawsuit, and it has not interposed any objection' l
whatsoever to this proposal.
We believe that this would l
give the NP/NW the right to complete that portion of the t
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i l
project which affordt them water af ter it is taken from the river-and permit them to undertake, complete, and assume sole ownership of the north branch transmission line, the north branch water treatment plant and a portion of the western transmission facilities from the treatment niant to the juncture of the proposed northern transmission main.
Inconjunction'withhaat, NWRA will be ordered to complete the construction of the Point Pleasant pumpine station and the combined transmission main so that the* water may be transported'to the Bradshaw Reservoir when that has l
been constructed and. completed by PECO.
Bucks County 7 will likewise be ordered to discharge any and all contractua1 I
responsibilities it has under the terms o_f,thes.e contracts.
By virtue of this form.of relief, Bucks County is not exposed 9
to any expense for the compla ion of this.oroject.
4
., CONCLUSIONS OF-LAW
, 1 1.
The construction and operation agreement and the water sales agreement are valid, binding and enforceable contracts.
L 2.
The construction and operation agreement and the
)
water sales agreement serve important and legitimate public l
- s 1 r..
9 Carl Fonash, Cha'irman of the Bucks County Board of Commissioners testified that the Board did not consider it in the best interests of the people of Bucks County to invest further 'in this water project.
4 6
6
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d l purposes, specifically the supply of public water to Bucks and Montgomery Counties, and therefore are not invalid or ultra vires under the provisions of the Municipality Authorities Act of 1945.
3.
The construction and operation agreement and the water sales agreement are predominately for public purposes and are not invalid under Art. 1Xi 59 of the Pennsylvania Constitution.
4.
There is no fraud, misrepresentation or corruption
. in the execution of the construction and operation agreement
. and the water sales agreement.
5.
The cons'truction and operation agreement does not invest PECO with the right to'in'terfere in any discretionary' governmental function and, therefore, the construction and-operation agreement does not constitute an improper delegation
~
of governmental authority in violation of Art. 111, 531 of the Pennsylvania Constitution.
6.
Paragraph 12'the. construction and operation agreement provides that Bucks County expressly agrees to accept an assignment of that acreement from NWP.A to the extent necessary for Buck's County to operate and maintain the Point Pleasant pumping station and combined transmission i
main. *~ In executin'g the-const'ruct'io' - and operatio'n agreemen't' -
~
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n the Bucks County Commissioners accepted the assignment and 1
the County is therefore contractually bound under the provisions thereof.
7.
PECO is a -third party beneficiary to the water i
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sales agreement with standing to enforce same.
4 8.
NP/NW are third party beneficiaries to the water sales agreement with standing to enforce same.
9.
By virtue of the third party beneficiary status of NP/NW-and PECO to the water sales agreement, and its relationship to the construction and operation agreement, each has standing to enforce both of those agreements.
10.
By failing to proceed expeditiously with the completion.of the contract project, and by virtue of their declared intention not to complete the project pursuant to the contract provisions, Bucks County and NWRA have materially and substantially breached their.. contractual obligations to PECO and NP/NW under the co1struction and
.?
operation agreement and the water sales agreement.
11.
The decisions of PECO and NP/NW to enforce their contractual rights against Bucks County and NWRA rather than seek alternative sources of water was reasonable under the circumstances and their rights to relief under these contracts are not barred or limited by any violation of a duty to l
mitigate damages.
t 12.
Defendants have failed to sustain their burden of proof of showing that by_ exercise of reasonable efforts by PECO and NP/NW they could have secured alternative' sources of water.
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13.
Bucks County and NWRA are estopped from denying their contract obligations as contained in the construction and operation and water sales agreements.
14.
PECO and NP/NW lack adequate remedies at law in view of-the impossibility of determining with any reason-able certainty the-damages which they may suffer as a result of the breaches _of these contracts by Bucks County and NWRA.
15.
PECO and NP/NW lack adequate remedies at law
- in view of the uncertainty in determining whether and when they could obtain any. alternative sources of water together with the required regulatory approvals for same.
16.
Under the provisions of paragraoh 5,, page 7 of the' water sales agreeme'nt NP/NW are entitled to take~oher
~
that portion of 'the ~ project relating to delivery of waker to them J
for purposes of distribution to their customers.
s 17.
NP/NW have the right to undertake completion, takeover and assume sole ownership of the north branch trans-mission main, north branch water treatment plant and a portion i ;
of,the western transmission facilities.
l[
l'8.
Bucks and NWRA are' therefore oblidatEd forthwith to assign, transfer and set over to NP/NW all permits, licenses, reports, design-plans and-title to real estate which NP/NW will use and which are necessary to c.onstruct and operate the facilities being taken over.
At the time of the transfer NP/NW'shall reimburse Bucks and NWRA for all costs properly incurred for those facilities being taken over.-
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4 19.
NWRA is ordered to recommence and complete t
I construction immediately of the Point Pleasant pumping station and the combined transmission main and do all things necessary 4
i so that the terms and provisions of the construction and operation agreement and the water sales agreement shall be l-carried out so that water shall be transported and delivered to the Bradshaw Reservoir as contemplated by these contracts.
DECREE NISI d
l AND NOW, to' wit, this
) ~ day of
- 1985,
~
it is hereby ordered that a verdict be entered in favor of the Philadelphia Electric Company and the North Penn and North Wales Water Authorities,a'nd against the County of Bucks and the
~
Neshaminy Water Resources Authority.
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i
-.:r It is ordered that the North Penn and North Wales
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Water Authorities shall undertake completion, take over and assume the scle ownership of the north branch transmission main, the north branch water treatment plant, and a portion of the western trr.nsmission facilities which is necessary to transport water L
to.them.
For these purposes, the County of Bucks and the i
Neshaminy Water Resoukces' Authority are'erdered So~rthwith to
~
' ' assign).' transfer'and set over to 'the North Penn and North Wales
~
Water Authorities all permits, licenses, reports,' design plans
~
and title to~real estate which North Penn and North Wales will h
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t recruire and which are necessary to construct and operate the facilities being taken over.
At the time of said transfer North Penn and North Wales Water Authorities shall reimburse Bucks County and Neshaminy Water Resources Authority for all costs properly incurred for those facilities being taken over.
The Nashaminy Water Resources Authority is ordered immediately to recommence and complete construction of the Point Pleasant pumping station and the combined transmission main and do all things necessary so that the terms and provisions of the construction and operation Agreement and the Water Sales Agree-ment shall be carried out and implemented so that water shall be transported and delivered to the Bradshaw Reservoir at such time as it shall be completed as contemplated by those contract,s.
The County of Bucks is ordered to do all things which are necessary to isolement and comply with its contractual obli-gations so that the construction and completion of the Point Pleasant pumping station,and the combined transmission main may i
be comoleted and so that the provisions of the Construction and Operation Agreement and Water sales Agreement shall be implemented.
The foregoing shall be entered as a decree nimi.
In the event that exceptions are not filedNithin't'en" (10) days,
of the date of entry, the decree nisi shall become a final order upon praecipe to the Prothonotary.
By the Chancellor, l
P.J.
9
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