October 29, !.?., E 7 ip, i.j CASE NO MC-FC PRESTON SANITATION, INC.

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1 201 Brooks Street, P.O. Box 812 Charleston, West Virginia Public Service Commission of West Virginia Phone: (304) Fax: (304) October 29, 2014 Ingrid Ferrell, Executive Secretary Public Service Commission PO Box 812 Charleston, WV 25323!.?., E 7 ip, i.j Re: CASE NO MC-FC PRESTON SANITATION, INC. V. SMALLWOOD SANITATION COMPANY, INC. Dear Ms. Ferrell: Enclosed for filing please find the original and twelve (12) copies of the Staffs Initial Brief. Copies have today been mailed to all parties of record in this proceeding. LSBibg Enclosures H:\Lbouvette\Cases\l MC-FC\Initial Brief LINDA S. BOUVETTE Staff Attorney WV State Bar I.D. No. 5926

2 PUBLIC SERVICE COMMISSION OF WEST VIRGIKIA CHARLESTON CASE NO MC-FC PRESTON SANITATION, INC. V. SMALLWOOD SANITATION COMPANY, INC. STAFF S INITIAL BRIEF October 29,20 14 Prepared By: Linda S. Bouvette Staff Attorney WV State Bar ID No. 5926

3 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON CASE ro IC-FC PRESTON SANITATION, INC. V. SMALLWOOD SANITATION COMPANY, INC. STAFF S INITIAL BRIEF TO THE ADMINISTRATIVE LAW JUDGE PROCEDURAL HISTORY On May 8, 2014, Preston Sanitation, Inc. filed a verified Formal Complaint with the Public Service Commission of West Virginia (Commission) against Smallwood Sanitation Company, Inc. (Smallwood). Complainant stated that Smallwood was providing roll-off service for trash, rubbish, garbage and industrial waste in Complainant s certificated service area. Smallwood does not have a certificate to provide such service in this area. Complainant requested that Smallwood be ordered to remove its roll-off containers from the certificated area, to cease and desist its activities and forfeit the charges for services previously rendered. On May 14,2014, Smallwood filed its response, stating that it did have a dumpster at the location stated in the complaint; that the service was commercial in nature; and that the waste was transported to Veolia Environmental Services Landfill at 1184 McClellandtown Road, McClellandtown, PA Smallwood further stated that the Commission had no jurisdiction over the interstate transportation of solid waste. Smallwood later sent in a verification for its answer.

4 An evidentiary hearing was held on September 24, 2014, at which time all parties were present and represented by counsel. SUMMARY OF TESTIMONY Russell Smallwood, President and Owner of Smallwood testified that his trucks have the proper registrations and that he uses one truck (2011 Mack R model) to haul solid waste to a landfill in Pennsylvania. Smallwood uses three or four drivers to drive the waste to Pennsylvania for disposal. Smallwood maintains an office in West Virginia where it keeps originals of invoices and other business paperwork. (Trans. p ) Mr. Smallwood does not know a Jonathan McCarty. The certificates issued to Smallwood by the Public Service Commission of West Virginia restrict its services to Marion and Monongalia Counties. Mr. Smallwood admitted to providing commercial solid waste hauling services in Preston County. He stated that if the company was operating outside its certificated area, then the waste is taken out of state for disposal. Lakeshore Homes, LLC requested roll-off service in Preston County for a couple of houses it was building in a subdivision. He is not seeking additional customers in Preston County. (Trans. p ; p. 43) The Company does not segregate equipment used to haul solid waste out of the state from equipment used in-state. Mr. Smallwood acknowledged he was familiar with the PSC requirement to include in his commercial contracts language regarding the Commission s jurisdiction to review rates. (Trans. p ) Mr. Smallwood has several contracts to haul waste out of state. Hauling solid waste out of state is a large part of his business. The Company has been hauling waste 2

5 out of state since mid 2004 or Mr. Smallwood said that only one truck is used in interstate hauling of waste. The Company does keep separate records or accounting for roll-offs versus residential work. (Trans. p ) The landfill used in Pennsylvania is miles from Monongalia County while Meadowfill Landfill is approximately 50 miles. Mr. Smallwood was unclear of the distance from Preston County to the Pennsylvania landfill. His business is sixty (60%) residential and forty (40%) commercial. (Trans. p ) He hauls Monongalia County waste to Pennsylvania but disposes of Marion County waste in West Virginia. He has one (1) dedicated employee who handles the interstate disposal. (Trans. p ) Mr. Smallwood testified that his commercial customers sign a contract for service. He provided roll-off service to Lakeshore Homes for two houses being constructed in Preston County. The tickets admitted into evidence represent disposal of the waste under the contract. (Trans. p ) Mr. Smallwood was unclear of the number of miles from the Lakeshore Homes site to the landfill in Pennsylvania. The fuel surcharge shown on the invoice reflected the mileage. The fuel surcharge is based on the price of fuel at the pump and will fluctuate as the price of fuel fluctuates. (Trans. p ) Mr. Richard Rhodes testified that he was the Operations Manager for Preston Sanitation, Inc. He stated that Lakeshore Homes never attempted to reach him to obtain a quote for services within Preston County. (Trans. p ) Preston Sanitation has been in business since 1976 and covers most of Preston County with the exception of a ten mile radius of the Mason County (?) Post Office and certain areas around Kingwood and 3

6 the Town of Rowlesburg, including the area where Lakeshore Homes was constructing single family residential homes. (Trans. p ) Mr. Rhodes stated that hauling material interstate requires a bill of lading that identifies the material. The driver is also required to sign a landfill ticket certifying whether the waste was hazardous or not. Haulers in West Virginia are required to have with them a Public Service Commission certificate card, an insurance card, and if hauling hazardous waste or material, a waste manifest. (Trans. p ) Mr. Rhodes testified that he was unaware that Smallwood had removed the roll-off containers from Lakeshore s property in Preston County. (Trans. p. 68) h4r. Rhodes stated that he contacted Sinallwood about the two roll-off containers he found in Preston County. Preston Sanitation provides roll-off services and takes most of the solid waste to the Tucker County Landfill. Preston Sanitation does not engage in interstate commerce by hauling waste out of state. Mr. Rhodes does not believe that Smallwood is hauling waste to Pennsylvania and thinks he should prove that all the waste is going out of state. His belief is based on the fact that he cannot match up the landfill fee, the contract, the mileage and the landfill ticket. Preston Sanitation did no discovery to obtain evidence of improper activities by Smallwood Sanitation. Preston Sanitation has no evidence that shows Smallwood Sanitation isn t hauling waste to Pennsylvania. (Trans. p ) Mr. Rhodes stated that he wants to serve his territory and be left alone. He wants other companies to stay out of his territory. He acknowledged that there was no law preventing Smallwood from setting a roll-off container and taking the waste out of state. A

7 Mr. Rhodes is unaware of any regulation or rule of the Commission that has been broken by Smallwood s actions. (Trans. p ) David Rudosky testified that he was part owner of Lakeshore Homes, LLC, and that he contracted with Smallwood Sanitation to provide solid waste hauling services for two residential construction projects in Preston County, West Virginia. Lakeshore had a previous business relationship with Smallwood Sanitation. He did speak with Mr. Rhodes and informed him that he could contract with whomever he chose for solid waste hauling services. (Trans. p ) Mr. Rudosky testified that several companies were contacted for pricing quotes, including Preston Sanitation. Smallwood provided a lower price for the service. (Trans. p ) Mr. Rudosky stated that he and his partner did not care where the waste was disposed of so long as it was removed from the construction site. (Trans. p ) Staff witness James W. Flenner testified that he did not make a recommendation in the case because he was concerned that the revenues of West Virginia customers may be subsidizing out of state customers. Mr. Flenner stated that the documentation produced by Smallwood showed that the waste was disposed of in an out-of state facility and therefore the issue raised in the complaint was satisfactorily resolved and the complaint should be dismissed. (Trans. p ) As for the issue related to the subsidization of out of state customers by in-state customers should be considered in a general investigation. (Trans. p. 91) 5

8 DISCUSSION The Complainant bears the burden of proof of its allegations. 6.2.g. The complainant must in all cases establish the facts alleged to constitute a violation of the law, unless the defendant admits the same or fails to answer the complaint. Commission s Rules of Practice and Procedure, 150 CSR g. Complainant alleged that Smallwood was hauling solid waste in its territory without a certificate and disposing of the waste in West Virginia. Complainant testified that it had no evidence to refute Smallwood s claim that the waste generated and collected in Preston County was disposed of in Pennsylvania. The documentation and testimony provided by Smallwood s witness support its claim that any waste it removed from Preston County was disposed of in Pennsylvania. The Commission has no jurisdiction over such activity. Harper v. the Public Service Commission of West Virginia, Case No CV , entered April 11, Therefore, the complaint should be dismissed as the sole issue raised by Preston Sanitation, Inc. is resolved. Staff raised a second issue relating to Smallwood s out-of-state activities. Staff is concerned that the ratepayers of West Virginia are paying for roll-off containers and vehicles that are being used in interstate commerce rather than in West Virginia. Staff recommended that a general investigation be opened to determine whether or not Smallwood Sanitation Company, Inc. is allowing its West Virginia customers to subsidize its interstate commerce business. 6

9 CONCLUSION Preston Sanitation, Inc. claimed that Smallwood Sanitation Company, Inc. was hauling solid waste from an area for which it did not have a certificate. The evidence introduced at the hearing documented that Smallwood hauled construction waste from Preston County to a landfill in Pennsylvania. The Commission does not have jurisdiction over companies who transport waste out-of-state for disposal. Smallwood is permitted to operate in areas without a PSC certificate so long as the waste is disposed of out-of-state. The complaint should be dismissed. Smallwood testified that he had purchased new roll-off containers and dedicated a truck and employee to its out-of-state commercial solid waste hauling business. Staff is concerned that West Virginia ratepayers are subsidizing this operation and requested a general investigation of its operations. Respectfully submitted this 29th day of October, STAFF OF THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA,aJT: By Counsel, LINDA S. BOUVETTE WV State Bar I.D. No

10 CASE NO MC-FC PRESTON SANITATION, INC. PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON V. SMALLWOOD SANITATION COMPANY, INC. CERTIFICATE OF SERVICE I, LINDA S. BOUVETTE, Counsel for the Public Service Commission of West Virginia, do hereby certify that a copy of the foregoing Staffs Initial Brief has been served upon the following parties of record by First Class United States Mail, postage prepaid this 291h day of October, 2014 Holly Turkett, Esq. Counsel, Smallwood Sanitation Company, Inc. The Law Office of Pamela R. Folickman, PLLC 421 Fairmont Avenue Fairmont, WV William G. Brown, IV, Esq. Counsel, Preston Sanitation, Inc Ashburn Shopping Plaza, Suite 214 Ashburn, VA /$?5J>, LINDA S. BOUVETTE. Staff Attomev < WV State Bar I.D. No. 5926