In re Application of Columbus S. Power Co.
128 Ohio St. 3d 512
| Ohio | 2011Background
- SB 221 (2008) revised Ohio electric regulation, offering market-rate or electric security plan (ESP) options with new rate standards.
- AEP sought an ESP for Columbus Southern Power and Ohio Power; proceedings spanned 2008–2009 with multiple rehearings.
- Commission issued a 77-page order March 18, 2009, approving the ESP subject to further proceedings; OCC and IEU appealed.
- The ESP included roughly $500 million POLR cost recovery and a retroactive rate increase of $63 million intended to be recovered January–December 2009.
- Court held retroactive rate increase unlawful under SB 221 and prior case law; remedies limited and remand ordered; record-supported POLR cost basis and ESP statutory interpretation scrutinized.
- Deliberations addressed whether SB 221’s time deadlines were mandatory or directory and whether ESP costs unlisted in statute could be recovered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the ESP-approved retroactive rate increase unlawful under SB 221? | OCC argues retroactive ratemaking violated R.C. 4928.141(A) and Keco/Lucas. | AEP/PUCO contend the increase complied with SB 221 and related case law. | Yes; retroactive increase unlawful. |
| Is OCC entitled to a refund for the retroactive increase? | OCC seeks refund as remedy for unlawful rates. | No refunds allowed under precedent; stay bond mechanism is the remedy. | No refund remedy; but unlawful increase acknowledged. |
| Are POLR charges properly supported by the record as cost-based? | POLR costs claimed were based on a Black-Scholes model tied to option value, not actual costs. | POLR charging framework intended to recover POLR risks, deemed cost-based by order. | Record lacks cost-based support; POLR charge reversed and remanded for proper factual basis. |
| Does R.C. 4928.143(B)(2) permit ESPs to include unlisted items? | §4928.143(B)(2) should be read as ambiguous but not allowing unlisted items. | Unlisted items may be included under 'without limitation.' | Statute permits only listed items; reversal of the unlisted-item ruling; remand to assess listed categories for environmental costs. |
| Did IEU properly challenge the commission’s procedural handling of ESP proceedings? | IEU contends deadlines and process affected jurisdiction/adequate explanation. | Deadlines are directory; commission provided explanations and remedies on rehearing. | Deadlines are directory; no jurisdictional loss; arguments rejected. |
Key Cases Cited
- Keco Industries v. Cincinnati & Suburban Bell Tel. Co., 166 Ohio St. 254 (1957) (retroactive ratemaking prohibited; stay/bond considerations for refunds)
- Lucas County Commrs. v. Pub. Util. Comm., 80 Ohio St.3d 344 (1997) (ratemaking prospective; treatment of rates during pendency)
- Ohio Consumers’ Counsel v. Pub. Util. Comm., 114 Ohio St.3d 340 (2007) (preserves no-refund rule; retroactive rate rulings cautionary)
- In re Davis, 84 Ohio St.3d 520 (1999) (directory vs mandatory deadlines; time provisions)
- Cleveland Electric Illum. Co. v. Pub. Util. Comm., 42 Ohio St.2d 403 (1975) (precedent for agency decision departure and need for explanation)
- Payphone Assn. v. Pub. Util. Comm., 109 Ohio St.3d 453 (2006) (statutory discretion; formula-driven regulatory action)
- Indus. Energy Users-Ohio v. Pub. Util. Comm., 117 Ohio St.3d 486 (2008) (record-supported challenges to cost allocations)