In re Application of Columbus S. Power Co.
8 N.E.3d 863
Ohio2014Background
- AEP filed an electric security plan (ESP) for 2009–2011 under R.C. 4928.143; PUCO originally approved it in 2009. Appellants Ohio Consumers’ Counsel (OCC) and Industrial Energy Users‑Ohio (IEU) appealed.
- This court’s 2011 decision (Columbus S. Power) reversed PUCO on three grounds: a retroactive rate increase, improper recovery authority for environmental-investment carrying costs, and an unsupported POLR (provider‑of‑last‑resort) charge; the case was remanded to PUCO for further consideration of carrying costs and POLR issues.
- On remand PUCO concluded carrying costs were authorized under R.C. 4928.143(B)(2)(d), and therefore no refund of those amounts collected during remand was required. PUCO found AEP had not proven actual POLR costs and ordered removal of the POLR charge from tariffs and refund of POLR amounts collected during the remand period (June–Oct 2011).
- OCC and IEU sought broader refunds: (1) repayment or offset of POLR and carrying charges AEP collected from April 2009–May 2011; and (2) related adjustments to deferred fuel-cost balances and other ratemaking components (delta revenues, USF, SEET).
- PUCO denied those broader remedies; the commission explained refunds or offsets of previously collected charges would constitute retroactive ratemaking, barred by precedent and statute. This appeal followed; the Supreme Court affirms PUCO.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether environmental‑investment carrying costs are recoverable under R.C. 4928.143(B)(2)(d) | IEU: statute requires a showing that charges are "necessary" (or economically justified) to provide "certainty" | PUCO/AEP: statute requires only that charges have the effect of stabilizing or providing certainty regarding retail service; no necessity or separate economic‑need showing required | Court: Affirmed PUCO — (B)(2)(d) authorizes carrying charges; record supported finding that carrying costs provided price stability/certainty for generation service |
| Whether recovery of carrying costs during remand was unlawful | IEU: PUCO improperly allowed collection during remand after the court’s prior decision | PUCO: May allow collection subject to refund; IEU waived challenge by not timely contesting PUCO’s interim order | Court: IEU waived challenge to PUCO’s May 25, 2011 order due to delay; claim forfeited |
| Whether AEP must refund or offset POLR charges collected Apr 2009–May 2011 against deferred fuel costs | OCC/IEU: POLR collections were unlawful and must be refunded or deducted from deferred FAC balance | PUCO/AEP: Rates were valid while in effect; refund/offset would be retroactive ratemaking; appellants could have sought a stay under R.C. 4903.16 during appeal | Court: Affirmed PUCO — retroactive ratemaking bar (Keco and subsequent precedent) precludes refund or offset; appellants failed to seek stay so cannot recover those amounts |
| Whether PUCO must adjust delta revenues, USF, SEET because POLR was unlawfully collected | IEU: POLR is embedded in those calculations and overstates revenues/earnings; adjustments required | PUCO/AEP: POLR was not treated as unlawful for period in question; retroactive adjustments barred | Court: Dismissed — based on holding that POLR collections need not be disgorged, these derivative adjustment claims fail |
Key Cases Cited
- Keco Indus., Inc. v. Cincinnati & Suburban Bell Tel. Co., 166 Ohio St. 254 (1957) (no right to restitution for rate increases collected during pendency of appeal; bar to retroactive ratemaking absent statutory authority)
- In re Application of Columbus S. Power Co., 128 Ohio St.3d 512 (2011) (Supreme Court previously reversed PUCO on retroactive increase, carrying‑costs authority, and POLR methodology; remanded for further proceedings)
- Constellation NewEnergy, Inc. v. Pub. Util. Comm., 104 Ohio St.3d 530 (2004) (explains POLR concept and PUCO ratemaking standards)
- Lucas Cty. Commrs. v. Pub. Util. Comm., 80 Ohio St.3d 344 (1997) (utility ratemaking is prospective only; courts and PUCO cannot order refunds of previously approved rates)
- Cleveland Elec. Illum. Co. v. Pub. Util. Comm., 46 Ohio St.2d 105 (1976) (a remand does not automatically render existing rates unlawful; commission must implement court mandate by new order)