2018 Ohio 229
Ohio2018Background
- FirstEnergy (Ohio Edison, Cleveland Electric Illuminating, Toledo Edison) recovered renewable-energy-credit (REC) costs through an Alternative Energy Resource Rider (Rider AER) approved as part of its first ESP for 2009–2011; Rider AER allowed recovery of "prudently incurred" REC costs.
- The Public Utilities Commission audited FirstEnergy's REC purchases (2009–2011); Exeter Associates performed the audit and reported in August 2012.
- The commission concluded most purchases were prudent but disallowed certain in‑state nonsolar REC purchases made in August 2010, ordering FirstEnergy to refund $43,362,796.50 to customers.
- FirstEnergy appealed, arguing the commission engaged in unlawful retroactive ratemaking (filed-rate doctrine / R.C. 4905.32). OCC and ELPC cross‑appealed trade‑secret protective orders that shielded supplier identities and bid/pricing data.
- The Supreme Court held the refund order unlawful retroactive ratemaking (reversed refund), and reversed the commission’s trade‑secret ruling for lack of factual support on the economic‑value prong, remanding that issue for explanation or disclosure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ordering refunds of previously collected REC costs was unlawful retroactive ratemaking | FirstEnergy: Rider AER charges were filed and in effect; R.C. 4905.32 and filed‑rate doctrine bar refunds not specified in tariff | Commission: River Gas allows post‑collection adjustments in contexts like fuel/GCR mechanisms; Rider AER filings didn’t create an immutable filed rate preventing prudence review | Court: Refund constituted unlawful retroactive ratemaking under R.C. 4905.32; reversal of refund order |
| Whether commission’s prudence finding (and $43M disallowance) was against manifest weight of the evidence | FirstEnergy: Purchases were prudent or, if imprudent, disallowance amount unreasonable | Commission/OCC: Audit and record supported disallowance | Court: Moot — unnecessary to decide because refund reversed |
| Whether REC‑procurement data (supplier identities, bid quantities, prices) are trade secrets under R.C. 1333.61(D) | FirstEnergy: Disclosure would harm competitive bidding; confidentiality agreements and protective orders show reasonable efforts to maintain secrecy | OCC/ELPC: Data are old; market changes likely eliminated independent economic value; commission gave no evidentiary support | Court: Commission failed to cite evidence/explain how aged data retain independent economic value — trade‑secret protection reversed; reasonable‑efforts prong upheld |
| Whether commission properly considered public‑records/open‑government interests (R.C. 149.43) | ELPC: Public interest favors disclosure of REC procurement details | Commission: (relied on trade‑secret finding) | Court: Not decided as trade‑secret ruling reversed and remanded for further explanation |
Key Cases Cited
- River Gas Co. v. Pub. Util. Comm., 69 Ohio St.2d 509, 433 N.E.2d 568 (Ohio 1982) (UPGA/GCR context where refund/adjustment upheld because statutory mechanism authorized variable pass‑throughs)
- Keco Indus., Inc. v. Cincinnati & Suburban Bell Tel. Co., 166 Ohio St. 254, 141 N.E.2d 465 (Ohio 1957) (filed‑rate doctrine prohibits refunds absent statutory/tariff authorization)
- In re Application of Columbus S. Power Co., 947 N.E.2d 655 (Ohio 2011) (discusses retroactive ratemaking; highlights limits on commission’s prospective‑only rate adjustments)
- Ohio Util. Co. v. Pub. Util. Comm., 58 Ohio St.2d 153, 389 N.E.2d 483 (Ohio 1979) (commission’s ratemaking power to fix new rates is prospective only)