In re Application of Ohio Power Co. (Slip Opinion)
20 N.E.3d 699
Ohio2014Background
- IEU challenges PUCO's order allowing Ohio Power to recover a $36 million underrecovery of transmission costs via a three-year, nonbypassable TCRR phase-in.
- TCRR recovers FERC-imposed transmission costs via a reconcilable rider under R.C. 4928.05(A)(2) and Ohio Adm.Code 4901:1-36-03.
- PUCO approved phase-in under R.C. 4928.144 to mitigate rate impact and collect via nonbypassable surcharge.
- Shopping customers could avoid TCRR when selecting a competitive generation supplier, but the order spread the underrecovery across all customers.
- IEU petitioned for rehearing; the case focuses on legality and rate-design authority, not factual disputes about costs.
- PUCO’s orders were appealed to the Supreme Court of Ohio.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether R.C. 4928.144 supports phase-in of ESP rates outside ESP proceedings | IEU contends phase-in may only occur in ESP proceedings | PUCO reasonably interpreted 4928.144 to permit phase-in in this context | Yes; phase-in authority may be invoked here. |
| Whether the phase-in authorized nonbypassable collection of the underrecovery | IEU argues phase-in cannot shift to shopping customers | Phase-in requires nonbypassable collection of deferrals | Yes; nonbypassable collection approved. |
| Whether the change deviates from Duke Energy precedent on bypassable riders | IEU claims Duke requires bypassable riders to stay bypassable | Duke did not create broad prohibition on phase-in design here | No departure from precedent; no anticompetitive subsidy. |
| Whether the timing and retroactive ratemaking concerns were unlawful | IEU asserts recovery from shopping customers is retroactive ratemaking | R.C. 4928.144 authorizes phase-in; not unlawful retroactive ratemaking | Not unlawful retroactive ratemaking; proper statutory authority. |
Key Cases Cited
- Constellation NewEnergy, Inc. v. Pub. Util. Comm., 104 Ohio St.3d 530 (Ohio 2004) (deference to agency expertise; standard of review for PUCO decisions)
- Ohio Edison Co. v. Pub. Util. Comm., 78 Ohio St.3d 466 (Ohio 1997) (complete and independent review of agency decisions on questions of law)
- Consumers’ Counsel v. Pub. Util. Comm., 58 Ohio St.2d 108 (Ohio 1979) (agency rate design discretion; defer to PUCO expertise)