2022 Ohio 4348
Ohio
2022
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Background

  • In 2019 H.B. 6 created a renewable-generation fund (later the solar generation fund) capped at $20 million annually and required monthly charges collected by Ohio electric-distribution utilities to fund it; H.B. 128 (2021) preserved the $20 million cap and collection mechanism.
  • The Public Utilities Commission of Ohio (PUCO) opened a proceeding and adopted Rider SGF as the recovery mechanism to produce the $20 million annual revenue for the solar generation fund.
  • Ohio Manufacturers’ Association Energy Group (OMAEG) appealed, raising five challenges to Rider SGF: (1) whether the $20M requirement is fixed, (2) whether charges must be assessed per "customer" (not per billing account), (3) scope of the $242 monthly cap for certain customers, (4) whether the Commercial Activity Tax (CAT) may be included/grossed up in the rider, and (5) whether tariffs must include refund language.
  • PUCO applied the Administrative Code definition of "customer" (tied to contract/tariff) and set Rider SGF to be collected per billing account; it also issued inconsistent language about whether Rider SGF charges include CAT.
  • The Ohio Supreme Court affirmed most of PUCO’s rulings, reversed in part, and remanded for clarification solely on the CAT issue; Justice DeWine dissented in part, arguing the statutory phrase "per-customer" must mean per customer (not per account).

Issues

Issue OMAEG's Argument PUCO/Opponent's Argument Held
1. Whether R.C. 3706.46(A)(1) requires Rider SGF revenue to be tied to actual disbursements (i.e., not fixed at $20M) The $20M cap is a ceiling; collections must equal the disbursements required under R.C. 3706.55 (i.e., only what is needed up to $20M). The statute plainly requires a recovery mechanism "sufficient to produce a revenue requirement of twenty million dollars annually." Rejected OMAEG; court held the statute establishes a fixed $20M annual revenue requirement and PUCO did not violate R.C. 4903.09.
2. Whether PUCO must implement the rider "per customer" (one charge per customer) rather than per billing account "Per-customer" means a single monthly charge per customer regardless of multiple accounts or meters. "Customer" is defined in Ohio Adm.Code as a person with a contract/tariff to receive service; riders are historically collected per billing account. Affirmed PUCO: collection per billing account is permissible; OMAEG’s challenge failed for not timely contesting the Admin. Code definition and for not overcoming presumption of reasonableness.
3. Whether the $242 monthly cap applies only to industrial customers eligible to self-assess (R.C. 5727.81(C)) The $242 cap applies exclusively to industrial customers eligible to become self-assessing purchasers. PUCO applied the cap to all nonresidential customers who are eligible to become self-assessing purchasers to avoid abrupt bill impacts, relying on the statute’s second sentence directing protection against bill shocks. Rejected OMAEG: court accepted PUCO’s interpretation and found OMAEG failed to challenge PUCO’s relied-upon statutory basis or show prejudice.
4. Whether PUCO lawfully included (or allowed gross-up for) the Commercial Activity Tax (CAT) in Rider SGF CAT cannot lawfully be included or grossed up in Rider SGF; statute contains no authorization and Rider SGF is not recovery of a utility-provided service. PUCO’s order contains inconsistent language; PUCO asserts it did not authorize a CAT gross-up and that $20M is set without CAT adjustment; utilities disagree on CAT exposure. Remanded for clarification: court found PUCO’s order ambiguous and directed PUCO to expressly determine whether Rider SGF revenues are subject to CAT and billable to customers.
5. Whether PUCO erred by not requiring refund language in Rider SGF tariffs for the 2027 refund provision PUCO should require tariff language to ensure refunds (per R.C. 3706.55(B)) are effectuated and not blocked by retroactive-ratemaking limits. Utilities already included refund/reconciliation language in their Rider SGF tariffs. Dismissed as moot: court found utilities had included the required refund language.

Key Cases Cited

  • Constellation NewEnergy, Inc. v. Pub. Util. Comm., 104 Ohio St.3d 530 (2004) (articulating standard for reversal of PUCO orders)
  • Monongahela Power Co. v. Pub. Util. Comm., 104 Ohio St.3d 571 (2004) (review of factual findings and burden on appellant to show manifest weight error)
  • Consumers' Counsel v. Pub. Util. Comm., 58 Ohio St.2d 108 (1979) (agency expertise may inform statutory intent on specialized issues)
  • Ohio Edison Co. v. Pub. Util. Comm., 78 Ohio St.3d 466 (1997) (this court’s independent review of legal questions in PUCO appeals)
  • MCI Telecommunications Corp. v. Pub. Util. Comm., 32 Ohio St.3d 306 (1987) (R.C. 4903.09 requires orders to state supporting facts and reasoning)
  • State ex rel. Cincinnati Bell Tel. Co. v. Pub. Util. Comm., 105 Ohio St.3d 177 (2005) (court may not add or delete words when construing a statute)
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