Justia Utilities Law Opinion Summaries

Columbia Gas of Ohio, Inc. applied to the Public Utilities Commission of Ohio (PUCO) in 2021 for authority to increase its distribution rates, modify its tariffs, and adjust certain accounting methods. The utility also sought approval for an alternative-rate plan and to continue demand-side management (DSM) programs for commercial and residential customers. Following an investigation and objections from various parties, a joint stipulation was reached among Columbia, the commission staff, and several intervening parties. This agreement included a rate increase, a substantial increase in the fixed monthly charge for residential customers, and the elimination of DSM programs for non-low-income customers. Several groups, including the Environmental Law & Policy Center (ELPC) and the Citizens’ Utility Board of Ohio (CUB), opposed the stipulation.PUCO conducted an evidentiary hearing and ultimately approved the stipulation with certain modifications, finding it satisfied the three-part test for reasonableness of contested stipulations: it was the result of serious bargaining, benefitted ratepayers and the public interest, and did not violate important regulatory principles or practices. ELPC and CUB separately applied for rehearing, but the commission denied these applications by operation of law after a related Supreme Court of Ohio decision clarified the process for rehearing requests.The Supreme Court of Ohio reviewed the case on appeal. The appellants argued that the commission’s approval was unsupported by evidence, particularly criticizing the fixed charge increase and elimination of DSM programs for most customers. The court held that the commission did not err in approving the increased fixed monthly charge or in eliminating the DSM programs for non-low-income customers. It found sufficient support in the record for PUCO’s decision and concluded that the commission’s actions did not violate regulatory principles or prior precedent. The Supreme Court of Ohio affirmed the commission’s orders. View "In re Application of Columbia Gas of Ohio, Inc." on Justia Law

Three Ohio electric-distribution utilities—Duke Energy Ohio, Dayton Power and Light (AES Ohio), and Ohio Power Company (AEP Ohio)—sought to recover from their retail customers the costs associated with their ownership interests in the Ohio Valley Electric Corporation (OVEC), a “legacy-generation resource” under Ohio law. Following the repeal of prior cost-recovery mechanisms, a new nonbypassable-rate mechanism called the Legacy Generation Resource (LGR) Rider was established pursuant to R.C. 4928.148, effective in 2019, to allow recovery of “prudently incurred” OVEC-related costs from 2020 onward. The Public Utilities Commission of Ohio (PUCO) ordered an audit of the companies’ LGR Riders for the year 2020, as required by statute.After the audits, PUCO conducted a hearing and approved the audit findings, except for a recommended cap on capital expenditures. PUCO found that all costs and sales flowing through the LGR Riders for the audit period were prudent and reasonable, and it declined to disallow any costs. The Ohio Environmental Council (OEC) and the Ohio Manufacturers’ Association Energy Group (OMAEG) challenged these orders, arguing that the companies had recovered imprudent or unreasonable costs, that the Commission improperly excluded certain evidence, and that it did not apply the correct legal standards.The Supreme Court of Ohio reviewed the case. It held that the PUCO did not commit reversible error in approving the cost recovery. The court determined that PUCO provided sufficient record support and explanation for its decisions and did not violate statutory requirements. While the court found PUCO’s application of a presumption of prudence to be erroneous, it concluded that this did not result in reversible error, as the record showed the companies met their burden of proof. The Supreme Court of Ohio affirmed the Commission’s orders. View "In re OVEC Generational Purchase Rider Audits Required by R.C. 4928.148" on Justia Law

A public utility that provides natural gas service to approximately 450,000 customers in southwestern Ohio had long relied on propane caverns as a seasonal gas supply. After constructing a new pipeline, the utility retired the caverns and sought to recover the costs associated with their retirement—such as the remaining undepreciated value, decommissioning expenses, and the value of the remaining propane inventory—from customers through increased rates. The company had previously obtained approval to abandon the caverns and defer these costs as a regulatory asset, with the understanding that it would seek their recovery in its next base-rate case.The Public Utilities Commission of Ohio reviewed the utility’s application to increase rates. After a hearing, the commission approved an agreement allowing the company to recover the full deferred amount, amortized over ten years as an operating expense. The commission determined that these costs were recoverable under Ohio Revised Code section 4909.15(A)(4) as a cost of rendering public-utility service, and not subject to the “used and useful” standard under section 4909.15(A)(1). The commission also found that, even if the latter standard applied, the costs would still be recoverable.The Supreme Court of Ohio affirmed the commission’s order. The court held that the commission did not act unlawfully or unreasonably in permitting the utility to treat the deferred costs related to the retirement of the propane caverns as operating expenses recoverable under R.C. 4909.15(A)(4). The court further found that these costs were properly considered as current expenses necessary for the provision of utility service, distinguishing them from investment losses in facilities never placed into service. The court dismissed as moot arguments regarding alternative findings and rejected the request to make related rates subject to refund. View "In re Application of Duke Energy Ohio, Inc." on Justia Law

A public utility company implemented a power-purchase-agreement rider connected to its contractual share in two coal-fired plants operated by a regional power corporation. This rider could result in either surcharges or credits to retail customers, depending on whether the market revenues from selling the plants’ output exceeded their costs. For the years 2018 and 2019, an independent auditor was hired to review the prudency of all costs and sales associated with this rider and to determine if the company’s actions served the best interests of retail ratepayers. The audit found that while the plants cost customers more than the market price for energy, the company's processes were generally consistent with good utility practice. The audit noted that the “must-run” strategy for plant operation might not always be optimal but considered other factors, such as employment and fuel diversity.The Public Utilities Commission of Ohio previously authorized the rider and allowed cost recovery, subject to annual prudency audits. After the independent audit, the Commission held hearings at which parties, including consumer advocacy groups, challenged the prudency of the must-run strategy and raised concerns about the independence of the audit process. They argued that commission staff improperly influenced the auditor and sought to subpoena a staff member for testimony. The Commission denied the subpoena, finding that testimony from other witnesses covered the relevant issues and that the auditor’s independence was not compromised.On appeal, the Supreme Court of Ohio reviewed the Commission’s findings and procedures. The Court held that the Commission did not commit reversible error in crediting evidence supporting the must-run strategy’s prudency, nor did it violate due process or its own rules by denying the subpoena, since the parties had ample opportunity to cross-examine other key witnesses. The Court also found the Commission was not required to apply an appearance-of-impropriety standard to assess the auditor’s independence. The Commission’s orders were affirmed. View "In re Rev. of the Power-Purchase-Agreement Rider of Ohio Power Co. for 2018 and 2019" on Justia Law

A company engaged in electric submetering entered into contracts with the landlords of several apartment complexes, granting it the exclusive right to supply electricity to tenants. These tenants had previously purchased electricity from a traditional utility provider. The submetering company purchased electricity, installed and maintained the necessary distribution and metering equipment, billed tenants directly, set the resale price, and could disconnect service for nonpayment. It profited from the difference between its purchase and resale rates. The landlords received payments from the submetering company but did not control its operations.The utility provider denied requests to convert the complexes to a system allowing the submetering arrangement and filed a complaint with the Public Utilities Commission of Ohio (PUCO), alleging the submetering company was operating unlawfully as a public utility. The submetering company counterclaimed that the utility provider’s blanket policy of denying conversion requests was discriminatory. PUCO concluded that the submetering company was not a public utility, reasoning that the tenants were not “consumers” under the statute and that the company was merely acting as the landlords’ agent. Based on this, PUCO denied the utility provider’s claims but ordered the utility to file a new tariff imposing conditions on the submetering company’s activities. PUCO also found in favor of the submetering company on one counterclaim.The Supreme Court of Ohio reviewed the case and held that the submetering company is “engaged in the business of supplying electricity to consumers” and thus meets the statutory definition of an “electric light company” and a “public utility” under Ohio law. Accordingly, the court reversed PUCO’s orders, vacated its tariff directive and counterclaim finding, and remanded for further proceedings consistent with its holding. View "In re Complaint of Ohio Power Co v. Nationwide Energy Partners, L.L.C." on Justia Law

A company was certified by the state regulator to operate as both a competitive retail electric and natural gas service provider. After receiving multiple consumer complaints, including allegations of unauthorized enrollments, deceptive sales practices, and improper telemarketing and door-to-door solicitation during a pandemic, the regulator initiated a formal investigation. The investigation uncovered evidence that the company and its vendors engaged in misleading marketing, falsified call recordings, forged consumer signatures, spoofed caller identification to appear as a utility or other trusted source, and failed to maintain required records. The company also solicited customers in violation of specific pandemic-related commission orders. The company argued that it lacked responsibility for vendors’ actions and had relied on the advice of counsel, and it challenged procedural aspects of the investigation.The Public Utilities Commission of Ohio conducted an evidentiary hearing and found the company had committed numerous violations of statutes and commission rules. It rescinded the company’s operating certificates, ordered it to cease operations in Ohio, imposed a $1.44 million forfeiture, and required the company to “rerate” affected consumers, providing restitution for the difference between the company’s rates and the utility’s default rates. The company’s application for rehearing was granted for further consideration but ultimately denied, and the company then appealed to the Supreme Court of Ohio.The Supreme Court of Ohio affirmed the rescission of the company’s operating certificates, holding that the commission provided adequate notice and opportunity for hearing and that the findings of statutory and rule violations were supported by the evidence. However, the court found the commission failed to sufficiently explain the basis for the forfeiture amount, violating statutory requirements for reasoned decision-making. The court also determined the rerating order was unclear as to which consumers were affected. The court reversed the forfeiture and rerating orders and remanded the matter for the commission to clarify and support its decisions. View "In re RPA Energy, Inc." on Justia Law

Three Ohio natural-gas producers filed a class-action lawsuit in the Summit County Court of Common Pleas against East Ohio Gas Company (Dominion Energy Ohio). They alleged that Dominion Energy sold or used natural gas delivered into its pipeline system without properly compensating them, despite tariff provisions requiring reconciliation of delivered gas volumes. The plaintiffs claimed conversion, unjust enrichment, and violations of statutory provisions related to damages from criminal acts and theft. The class consisted of Ohio natural-gas producers participating in the Energy Choice Program whose wells were connected to Dominion Energy’s pipeline system.Judge Christine Croce partly granted Dominion Energy’s motion to dismiss by dismissing the conversion claim but allowed other claims to proceed. Dominion Energy appealed, but the Ninth District Court of Appeals dismissed the appeal, finding that Judge Croce’s order was not a final, appealable order. Subsequently, Dominion Energy sought a writ of prohibition in the Ninth District against Judge Croce, arguing that the Public Utilities Commission of Ohio (PUCO) has exclusive jurisdiction over the subject matter of the class-action claims. The natural-gas producers intervened in the prohibition action.The Ninth District Court of Appeals applied the test from Allstate Insurance Co. v. Cleveland Electric Illuminating Co. and concluded that PUCO has exclusive subject-matter jurisdiction over the claims because the resolution of the dispute depended on the interpretation and application of PUCO-approved tariffs and practices normally authorized by public utilities. The court granted summary judgment for Dominion Energy and issued a writ of prohibition ordering Judge Croce to cease jurisdiction over the class action and vacate her prior orders.On appeal, the Supreme Court of Ohio affirmed the Ninth District’s judgment. The court held that PUCO has exclusive jurisdiction over the claims asserted by the natural-gas producers, and the common pleas court patently and unambiguously lacks subject-matter jurisdiction over those claims. View "E. Ohio Gas Co v. Croce" on Justia Law

One Power Company challenged two orders issued by the Public Utilities Commission of Ohio (PUCO) regarding Ohio Power Company’s fifth electric-security plan. The first issue concerned a protective agreement governing access to confidential discovery materials. One Power argued that the agreement unreasonably prevented its chief executive officer and expert witness, an employee, from accessing all discovery, which allegedly disadvantaged its ability to litigate. The second issue involved the commission’s decision to continue a nonbypassable basic-transmission-cost rider, meaning all customers—including those who purchase generation service from competitive suppliers—must pay the charge.After AEP Ohio filed its application for the fifth electric-security plan, One Power intervened and sought broader access to confidential materials. The PUCO’s attorney examiner denied One Power’s motion for a more permissive protective agreement, finding the proposed limits reasonable. One Power’s interlocutory appeal was also denied. At the evidentiary hearing, One Power renewed its objections, but the commission affirmed the examiner’s rulings and later denied rehearing. Regarding the transmission rider, the commission maintained its nonbypassable status, citing the need for further study before making major changes and noting consistency with prior practice. One Power’s rehearing application on this issue was also denied.On appeal, the Supreme Court of Ohio reviewed whether the PUCO’s orders were unlawful or unreasonable. The court held that One Power failed to demonstrate particularized harm from the protective agreement and that the commission acted within its statutory and regulatory authority in continuing the nonbypassable rider. The court found no violation of state electric policy or commission precedent. Accordingly, the Supreme Court of Ohio affirmed the PUCO’s orders. View "In re Application of Ohio Power Co." on Justia Law

Dayton Power and Light Company (DP&L), operating as AES Ohio, sought approval from the Public Utilities Commission of Ohio (PUCO) regarding whether its electric security plan (ESP) resulted in significantly excessive earnings for the years 2018 and 2019. The ESP is a mechanism for setting the standard generation rate for customers who do not choose a competitive supplier. During this period, DP&L also transitioned from its third ESP (ESP III) back to its first ESP (ESP I) after the commission invalidated a similar rider in another utility’s plan, following a decision by the Supreme Court of Ohio. DP&L’s parent company, AES Corporation, made substantial capital contributions to support future investments in grid modernization.PUCO consolidated several related cases and found that DP&L’s ESP resulted in excessive earnings of $3.7 million in 2018 and $57.4 million in 2019. However, PUCO determined that DP&L could offset these excessive earnings with its commitment to future capital investments, and therefore, no refund to consumers was required. PUCO also found that DP&L’s ESP passed the required quadrennial review tests, including a prospective analysis of earnings and a comparison to market-rate offers. The Office of the Ohio Consumers’ Counsel (OCC) appealed, challenging the refusal to order refunds and the continued collection of a rate-stabilization charge. DP&L filed a protective cross-appeal, asserting alternative grounds for affirmance.The Supreme Court of Ohio reviewed the case and held that PUCO was not authorized under R.C. 4928.143(F) to allow DP&L to retain significantly excessive earnings based solely on its commitment to future investments. The court reversed PUCO’s orders and remanded the case for a new significantly excessive earnings test analysis. The court rejected OCC’s challenge to the rate-stabilization charge, finding its legality was not at issue in this appeal, and also rejected DP&L’s alternative grounds for affirmance. View "In re Application of Dayton Power & Light Co." on Justia Law

Duke Energy Ohio, Inc. applied to the Public Utilities Commission of Ohio (PUCO) for an increase in natural gas distribution rates and approval of an alternative-rate plan. The Office of the Ohio Consumers’ Counsel (OCC) filed an application for rehearing, which PUCO initially extended through a tolling order. However, following a decision in a related case, In re Application of Moraine Wind, L.L.C., it was determined that PUCO lacked the authority to issue such tolling orders, meaning the OCC’s application for rehearing was denied by operation of law after 30 days.The OCC did not appeal the denial by operation of law but instead filed a second application for rehearing challenging PUCO’s tolling order practice. After the Moraine Wind decision, PUCO journalized an entry on September 4, 2024, acknowledging the denial by operation of law and closing the case. The OCC then filed a third application for rehearing, which PUCO denied on October 2, 2024. The OCC subsequently filed a notice of appeal on October 25, 2024.The Supreme Court of Ohio reviewed the case and denied Duke Energy’s motion to dismiss the appeal for lack of jurisdiction. The court held that under R.C. 4903.11, the OCC’s appeal was timely because it was filed within 60 days of PUCO’s journalized entry on September 4, 2024, which constituted an “entry upon the journal of the commission of the order denying an application for rehearing.” Thus, the OCC properly invoked the court’s jurisdiction, and the appeal was allowed to proceed. View "In re Application of Duke Energy Ohio, Inc." on Justia Law