Justia Ohio Supreme Court Opinion Summaries

American Electric Power operating companies (AEP) had been providing service to a pair of manufacturing customers at discounted rates. AEP had been keeping track of its delta revenue, the difference between what AEP would have collected under its tariffs and what it actually collected with the discount, and intended to collect it through a rider. In the case below, AEP filed an application seeking permission to collect its delta revenue through the rider. Industrial Energy Users-Ohio (IEU) opposed both requests. The Public Utilities Commission rejected IEU's arguments and allowed the American Electric Power operating companies (AEP) to recover the costs arising from the discounted-rate arrangements. IEU appealed. The Supreme Court affirmed, holding (1) IEU did not show that the Commission erred in modifying the phase-in of AEP's rates, and (2) IEU did not show that the Commission erred in calculating AEP's carrying charges. View "In re Application of Columbus S. Power Co." on Justia Law

Sunoco, the owner and operator of several petroleum-refining facilities, purchased electric service from Toledo Edison. The contract between the two companies permitted arrangements that differed from the standard rate schedules. BP Oil Company, which owns a competing refined located next to Sunoco's refinery, also had a contract with Toledo Edison. Both contracts contained 'most favored nation' clauses, which allowed Sunoco and BP to utilize any "arrangement, rates or charges" for their facilities that Toledo Edison had given to the other. At issue was whether Sunoco could invoke the clause to extend the duration of its contract with Toledo Edison to match the duration of BP's contract with Toledo Edison, which would result in a $13 million savings for Sunoco. The commission found the clause did not allow Sunoco to extend the duration of its contract. The Supreme Court reversed, holding that under the plain language of the clause, the word "arrangement" encompasses all non-price terms of a competitor's contract. Because duration is a non-price term of contract, it is subject to the clause.

The Public Utilities Commission allowed two electric power operating companies to adjust their economic-development cost-recovery riders and recover additional revenues. Industrial Energy Users-Ohio (IEU) sought a rehearing, which the commission denied. IEU appealed the order, arguing that the commission approved the rate increase without reviewing its reasonableness. The Supreme Court found the order prejudiced IEU because some of IEU's members paid higher rates as a result of the order. The Court then affirmed, holding that IEU failed to meet its burden to identify a legal problem with the order. Because the Court presumes that orders are reasonable, IEU must upset that presumption, and IEU did little more than disagree with the order, giving the Court no reason to reverse.

The Ohio Public Utilities Commission approved a âprogram portfolio planâ proposed by Appellee American Electric Power (SEP). The plan contained a variety of programs designed to increase energy efficiency and reduce peak demands on AEPâs system. Appellant Industrial Energy Users-Ohio (IEU) challenged the PUCâs approval of the plan to the district court, arguing that the plan was too costly, was not energy-efficient, and did not meet the requirements imposed under the applicable state laws. The Supreme Court reviewed the record and found that IEUâs challenges âall lack merit.â The Court affirmed the lower courtâs and PUCâs decisions approving the plan.

The Ohio Public Utilities Commission (PUC) approved âreasonable arrangementsâ between American Electric Power Company (AEP) and two manufacturing firms, Ormet Primary Aluminum (Ormet) and Eramet Marietta, Inc. (Eramet). The arrangements gave substantial price discounts on electric service. The PUC approved the arrangements and allowed AEP to collect from other customers most of the revenue foregone to the discounts. Ormet asked the commission to approve an arrangement linking Ormetâs electric rate to the market price of aluminum; Eramet asked for a fixed discounted rate. The PUC held public hearings to consider the manufacturersâ applications, and numerous parties intervened, including Industrial Energy Users-Ohio (IEU). Disagreements regarding both applications centered on the amount of the discount and who should pay for it. The PUC issued orders permitting discounted rates to the manufacturers, but the PUCâs plan was not exactly what AEP had proposed. AEP appealed the PUCâs decision, arguing that the discounts do not allow the power company to recoup its losses from the plan discounts. The Supreme Court found that state law âaffirmatively gives the commissionânot the utilitiesâfinal say over arrangementsâ like the ones decided for Ormet and Eramet. The Court affirmed the PUCâs decisions regarding the manufacturing companiesâ arrangements.

In 2008, the Ohio General Assembly enacted Senate Bill 221, which substantially revised the regulation of electric service in Ohio. The cost of electric power generation increased significantly. Faced with a lack of competition, rising electricity prices and unfavorable market-based rates, the commission and utilities responded with various rate plans not expressly contemplated by statute. The state legislature revised its bill to address areas of concern with electric markets, in particular, it established new standards to govern generation rates. This appeal stems from a proceeding in which the Ohio Public Utilities Commission authorized new generation rates for the American Electric Power operating companies (AEP) Columbus Southern Power Company and Ohio Power Company. AEP applied for an "electric security plan" instead of a market-rate offer. Appellants, the Office of the Ohio Consumers' Counsel (OCC) and Industrial Energy Users-Ohio (IEU) raised 13 propositions of law in its suit all relating to purchase of electricity. The Supreme Court found that the commission committed reversible error on three of the thirteen grounds, and affirmed the commission's ruling on all other issues. The case was then remanded to the commission for resolution of three issues: (1) the commission unlawfully granted a retroactive rate increase, but the OCC is not entitled to a refund; (2) in approving a provider-of-last-resort (POLR), the commission relied on a justification lacking any record support; and (3) the commission erred in determining that electric security plans (ESPs) may include items not specifically authorized by statute.