4 Ohio St. 3d 91 | Ohio | 1983
Lead Opinion
This appeal presents three issues for review. The first is whether the commission erred in disapproving appellant’s proposed post-test-year wage adjustment. The second is whether the commission properly denied recovery of the increased excise tax levy imposed by Am. S.B. No. 448. The third is whether the exclusion of the Killen expenditures pursuant to R.C. 4909.15(A)(4) amounts to the confiscation of appellant’s property in violation of the Fifth and Fourteenth Amendments to the Constitution of the United States.
Before proceeding further, we note that “[t]he scope of this court’s review of commission orders is set forth in R.C. 4903.13, which states in pertinent part:
“ ‘ “A final order made by the public utilities commission shall be reversed, vacated, or modified by the supreme court on appeal, if, upon consideration of the record, such court is of the opinion that such order was unlawful or unreasonable.”
I
The issue of post-test-year wage adjustments has twice been before us recently. In Consumers’ Counsel v. Pub. Util. Comm. (1981), 67 Ohio St. 2d 372 [21 O.O.3d 234] (hereinafter “EOG”) this court reversed an order of the commission granting the East Ohio Gas Company a 9.4 percent wage annualization to reflect an increase in wage rates, which increase went into effect after the designated test year had ended. After reprising the applicable statutes, R.C. 4909.15(A)(4), 4909.15(C), and 4909.15(D)(2)(b), we determined in EOG that the labor adjustment granted by the commission did not represent the type of anomalous condition for which inclusion of costs not incurred during the test period would be permissible.
“The language of R.C. 4909.15 is unequivocal. Rate increases are based on costs of rendering utility service during the test period. The dates of the test year follow directly from the date .the utility chooses to file for its rate increase. Aware that its employee labor contract was about to be renegotiated, the utility company filed the application with the commission at a time which caused the test year to end prior to the beginning date of the new contract. The adjustment which EOG sought on rehearing to take into account its increased labor costs arising from that contract would violate the test-year concept embodied in R.C. 4909.15.” (Emphasis sic.)
Appellant seeks to distinguish EOG on its facts and argues in its first
II
Appellant asserts in its second proposition of law that “Revised Code § 4909.161 mandates that the public utilities commission approve rate schedules which will permit a public utility to fully recover in its rates the increased excise tax levy resulting from the 1% additional gross receipts tax imposed by Am. Senate Bill No. 448.” As previously noted, the commission disallowed recovery of DP&L’s tax payments made pursuant to Am. S.B. No. 448 that had not been recovered under the rates established in case No. 80-687-EL-AIR. Am. S.B. No. 448, which imposed an additional one percent tax on gross receipts, became effective on January 1, 1981 and expired June 30, 1981. Appellant paid the increased tax levy in four installments in January, March, June, and December 1981. The first three installment payments were made within the test year but prior to the November 15,1981 effective date of R.C. 4909.161. The December payment was made outside the test period but after R.C. 4909.161 took effect. The commission acknowledged R.C. 4909.161 in denying rehearing but declined to make the adjustment sought by DP&L for the reason “that the legislation cannot logically be interpreted to permit recovery of a tax increase which had expired long before the rates set in this case became effective.” While we find no fault with the commission’s logic, we are compelled to disagree with its reading of R.C. 4909.161, at least insofar as the commission denied recovery of the December payment or any portion thereof not previously recovered.
R.C. 4909.161 states as follows:
“Notwithstanding the provisions of Chapters 4905. and 4909. of the Revised Code, the payment of any type of increased excise tax levy shall- be considered to be a normal expense incurred by a public utility in the course of rendering service to the public, and may be recovered as such in accordance with an order of the public utilities commission. Any public utility required to
The statute sets forth the broad rule that “the payment of any type of increased excise tax levy shall be considered to be a normal expense. * * *” This provision is keyed to “payment” of a tax irrespective of whether the tax upon which the payment has been made remains in effect or has expired. Ordinarily the commission would be empowered to deny recovery for an anomalous expense and, indeed, we do not disturb the commission’s disallowance of the unrecovered portions attributable to the January, March and June 1981 installments paid on the temporary one percent gross receipts tax. The General Assembly’s enactment of R.C. 4909.161 has, however, established as a matter of law that payment of any type of increased excise tax levy after November 15, 1981 shall be considered to be a normal expense incurred by a public utility in the course of rendering service to the public. Thus, the commission erred in disregarding the plain language and import of R.C. 4909.161 when it denied recovery of the December installment payment (or the unrecovered balance thereof) in the current case.
The record does not reflect the precise amounts of the installments paid pursuant to Am. S.B. No. 448 or the amount of the tax that has been recovered pursuant to the rates set in DP&L’s previous rate case. We find it necessary, therefore, to reverse and remand the cause to the commission for further proceedings to determine (1) the amount of the installment paid in December, the full recovery of which is mandated by R.C. 4909.161, and (2) to prevent a possible over-recovery, the amount, if any, of monies previously recovered under the rates set in case No. 80-687-EL-AIR attributable to the December installment. Upon making these determinations, the commission shall modify its order so as to allow appellant to recover the difference between the December one percent excise tax payment and any monies already recovered thereon.
Ill
A
In its final proposition of law appellant challenges the constitutionality of the commission’s disallowance of DP&L's request to treat its investment in the cancelled Killen facility as amortizable costs. Before proceeding to appellant’s specific contentions regarding Killen, it is appropriate for us to review the historical development underlying current federal constitutional doctrine respecting utility ratemaking.
The leading federal constitutional cases involving claims of confiscatory utility rate orders establish two fundamental precepts. The first is that “* * * he who would upset the rate order * * * carries the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences.” FPC v. Hope Natural Gas Co. (1944), 320 U.S. 591, 602.
The historical background from which these precepts developed was summarized by Justice Black in his dissenting opinion in McCart v. Indianapolis Water Co. (1938), 302 U.S. 419, 427-428:
“For the first hundred years of this Nation’s history, federal courts did not interfere with state legislation fixing maximum rates for public services performed within the respective states. The state legislatures, according to a custom which this Court declared had existed ‘from time immemorial’ decided what those maximum rates should be. This Court also said that ‘for protection against abuses by legislatures the people must resort to the polls, not to the courts.’ It was not until 1890 that a divided court [in Chicago, M & St. P. Ry. Co. v. Minnesota (1890), 134 U.S. 418] finally repudiated its earlier constitutional interpretation and declared that due process of law requires judicial invalidation of legislative rates which the courts believe confiscatory. The dissenting Justices adhered to the long existing principle that regulation of public utilities was a ‘legislative prerogative and not a judicial one.’ ” (Footnotes omitted.)
In Natural Gas Pipeline Co., supra, Justice Black expanded upon his McCart history lesson in a concurring opinion joined by Justices Douglas and Murphy where he once again expressed his deep disagreement with the notion that “ ‘due process’ means no less than ‘reasonableness judicially determined’ * * * which, in the words of Justice Holmes, makes the sky the limit of judicial power to declare legislative acts unconstitutional, the conclusions of judges, substituted for those of legislatures, become a broad and varying standard of constitutionality.” 315 U.S., at page 600. Justice Frankfurter, concurring separately, took issue with Justice Black’s historical exegesis, stating, at page 609, that “[w]hile the doctrine of ‘confiscation,’ as a limitation to be enforced by the judiciary upon the legislative power to fix utility
While we are not here concerned with whether Justice Black or Justice Frankfurter was more faithful to the muse of history, we do find it significant that Justice Frankfurter did not take exception to Justice Black’s characterization of Natural Gas Pipeline Co. as “* * * a new chapter in the regulation of utility rates * * * [which] erases much which has been written in rate cases during the last half century * * *.” Id., at page 602. The majority opinion in the 1944 Hope Natural Gas Co. case essentially adopted the theory of legislative hegemony in the sphere of economic regulation expressed in the Natural Gas Pipeline Co. concurrence. The court stated, at page 601, “that the ‘authority of Congress to regulate the prices of commodities in interstate commerce is at least as great under the Fifth Amendment as is that of the States under the Fourteenth to regulate the prices of commodities in intrastate commerce.’ 315 U.S. p. 582. Ratemaking is indeed but one species of price-fixing. Munn v. Illinois, 94 U.S. 113, 134. The fixing of prices, like other applications of the police power, may reduce the value of the property which is being regulated. But the fact that the value is reduced does not mean that the regulation is invalid.”
In Permian Basin Area Rate Cases, supra, the court deferred to the legislative will as expressed by Congress’ administrative surrogate, the Federal Power Commission, so completely that Justice Douglas, the author of the Hope Natural Gas Co. opinion, was compelled to dissent in an ironic turnabout. 390 U.S., at pages 829-845. In the words of one commentator, “with the Permian decision the Court has completed a long circle back to almost where it started in Munn [v. Illinois (1876), 94 U.S. 113] 92 years previous. The Constitution no longer provides any special protection for the utility investor. Regulation is deemed no different from any other governmental action; it can ‘limit stringently’ the profitability of his investment in endeavoring to balance the ‘broad public interest entrusted to its protection.’ ” Bernstein, Utility Rate Regulation: The Little Locomotive That Couldn’t (1970), Wash. U.L.Q. 223, 259-260. Although utility companies continue to appeal allegedly confiscatory rate orders that state courts have
Ill
B
Appellant contends that “[a]n interpretation of Rev. Code § 4909.15(A)(4) which excludes from a utility’s cost of service the accumulated costs associated with the cancellation of a planned generating facility is unconstitutional as applied to that utility, and violates the Fifth Amendment applied to the Federal Constitution.”
In CEI, supra, we held in the syllabus that “[t]he Public Utilities Commission’s treatment of a utility’s investment in terminated nuclear generation stations as amortizable costs to be recovered from the utility’s ratepayers is inconsistent with the ratemaking formula contained in R.C. 4909.15 and is unreasonable and unlawful.” Several of the constitutional arguments advanced by appellant are similar to the statutory arguments that we considered and rejected in CEI. For example, appellant would rely on R.C. 4905.22 to support its contention that Killen expenditures “were incurred in order to provide necessary and adequate service.”
“The commission urges that ‘an expenditure by a utility can be considered a cost of rendering the public utility service if it fails in fact to achieve its intended purpose * * * [if] the expense was reasonably calculated to provide [future] utility service at a reasonable cost.’ The underpinnings for the commission rationale may be found in those statutory provisions that require utilities to maintain adequate service presently and for the foreseeable future. See, e.g., R.C. 4905.22 (adequate service and facilities).
“Notwithstanding the provisions that impose a duty on utility companies to plan for the future, the question under R.C. 4909.15(A)(4) remains whether the cancelled plant expenditures represent ‘[t]he cost to the utility of rendering the public utility service for the test period.’ Test period considerations aside, what the company sought and what the commission granted was the amortization as service-related costs of an investment that never provided any service whatsoever to the utility’s customers.
“* * * The now terminated nuclear plants represented a major capital investment that ultimately would have been included in the rate base under R.C. 4909.15(A)(1), had the projects not been cancelled. It is our opinion that R.C. 4909.15(A)(4) is designed to take into account the normal, recurring expenses incurred by utilities in the course of rendering service to the public for the test period. * * *
“The extraordinary loss sustained by CEI in connection with the terminated nuclear plants cannot be transformed into an ordinary operating expense pursuant to R.C. 4909.15(A)(4) by commission fiat. The commission’s statement that ‘[cancellation does not create a past loss, but gives rise to a current cost’ is unpersuasive. Under this rationale we question whether there could ever be a ‘past loss’ the return of which would not be recoverable in future ratemaking proceedings notwithstanding the commission’s assertion to the contrary. * * *”
Appellant further contends that the commission, in denying the Killen amortization on the strength of this court’s decision in CEI, disregarded the constitutional requirement announced in FPC v. Hope Natural Gas Co.,
This same argument was presented under the rubric of “policy” in CEI where we stated, at pages 167-168:
“We are mindful of the policy considerations that prompted the commission’s decision. The commission, CEI, and the amici argue strenuously that to rule as we have today will seriously disadvantage Ohio utilities in capital markets thereby ‘driving] up the return on investment required by investors in Ohio utilities.’ This gloomy scenario, however, does not imbue the commission with the authority to rewrite the statutes. The statutes in question contain no provisions insulating investors from the type of losses sustained in the cancelled-plants venture.
“If, as has been argued, these are parlous times for the utilities industry, and if, therefore, in order to attract and retain investment capital, utility companies must not only be granted a fair and reasonable rate of return pursuant to statute but must also be assured the return of capital invested in failed projects that would otherwise not be recoverable under the ratemaking formula, then the commission and the utilities should petition the General Assembly to enact changes in the ratemaking structure so as to provide this extra modicum of protection for the investors. Absent such explicit statutory authorization, however, the commission may not benefit the investors by guaranteeing the full return of their capital at the expense of the ratepayers. Under the ratemaking formula now in effect consumers are not chargeable for utility investments and expenditures that are neither included in the rate base nor properly categorized as costs. What we previously stated in a rate base case is applicable to the case at bar: ‘* * * It is only proper that their [the investors’] venture be found operational before they commence to recoup their capital outlays from the consumers.’ Consumers’ Counsel v. Pub. Util. Comm. (1979), 58 Ohio St. 2d 449, 456-457 [12 O.O.3d 378].”
In Consumers’ Counsel v. Pub. Util. Comm. (1979), 58 Ohio St. 2d 449 [12 O.O.3d 378] (hereinafter “Toledo Edison”), this court held that the DavisBesse Unit 1 generating station, which was not “used and useful in rendering the public utility service” pursuant to R.C. 4909.15(A)(1), could not be included in the utility’s rate base. Toledo Edison made a constitutional argument similar to that presented herein to which we responded, at page 456:
“Toledo Edison argues that to deny inclusion of the unit in its rate base would be tantamount to the confiscation of its property in violation of its constitutional right to due process of law. In Columbus Gas & Fuel Co. v. Pub. Util. Comm., supra (292 U.S. 398), the Supreme Court addressed the issue of
“ ‘There will be no need in the computation of the rate base to include the * * * value of fields not presently in use, unless the time for using them is so near that they may be said, at least by analogy, to have the quality of working capital. * * * Postponement of * * * profit until the state of imminent or present use is not an act of confiscation, but a legitimate exercise of legislative judgment.’
(i* * *
“It would be inequitable to prematurely shift the risk of plant failure from the utility’s investors to the ratepayers by the inclusion in the rate base of highly complex and innovative technology which has not been proven to be reasonably free from significant design or construction defects. The initial risk of failure is appropriately borne by the investors, who have undertaken the project and who will ultimately profit from its success.”
While we again note that Toledo Edison involved rate base consideration under 4909.15(A)(1), as opposed to matters relating to cost of service under R.C. 4909.15(A)(4), the analogy is a fair one insofar as it indicates that the General Assembly has adopted a consistent position in balancing investor and consumer interests in utility ratemaking. Pursuant to the statutory ratemaking formula investors are assured a fair and reasonable return on property that is determined to be used and useful, R.C. 4909.15(A)(2), plus the return of costs incurred in rendering the public service, R.C. 4909.15(A)(4), while consumers may not be charged “for utility investments and expenditures that are neither included in the rate base nor properly categorized as costs.”
Appellant also presents an elaborate argument premised on the Federal Energy Regulatory Commission (FERC) Uniform System of Accounts, 18 C.F.R., Part 101, which Ohio utilities are required to follow pursuant to Ohio
In its final argument appellant asserts that “[exclusion of the costs associated with the cancellation of Killen Unit No. 1 guarantees that DP&L will be unable to earn a fair and reasonable rate of return.” There is little evidentiary support for this contention. As the commission stated in its order, DP&L “objected to the staffs reversal of the company’s [proposed Killen] adjustment, but presented no witnesses relative to the subject and did
Appellant’s expert testified that “the * * * [CEI] ruling serves to increase the risk associated with common stock ownership of electric utilities in this state,” but did not attempt to quantify this perceived additional risk. Moreover, there is nothing to suggest that the commission did not take this purportedly greater risk into account in its order.
To prevail, appellant must prove not only the unreasonableness of the Killen exclusion but also the confiscatory effect this exclusion had on the rates established by the commission, viewing the rate order “in its entirety.” Hope Natural Gas Co., supra, at page 602. We are unprepared to say that appellant has carried this “heavy burden” in either respect. In CEI we held that a utility’s investment in cancelled generating facilities could not be treated as amortizable costs to be recovered from the utility’s ratepayers under the statutory ratemaking formula. Appellant’s arguments in the instant case are but variations on the statutory and policy arguments we found wanting in CEI, and we find them no more appealing when attired in constitutional raiment. Moreover, even these unpersuasive constitutional contentions lose whatever force they might have had in the absence of any showing that the commission’s order “viewed in its entirety” is confiscatory. The rule is clear: “* * * jf total effect of the rate order cannot be said to be unjust and unreasonable, judicial inquiry * * * is at an end.” Hope Natural Gas Co., supra, at page 602. The total effect of the commission’s rate order cannot be said to be unjust and unreasonable and therefore our judicial inquiry is at an end. Accordingly, we hold that the commission’s disallowance of DP&L’s request to treat its Killen expenditures as amortizable costs pursuant to R.C. 4909.15(A)(4) does not violate the Fifth and Fourteenth Amendments to the Constitution of the United States.
For the reasons hereinbefore stated the decision of the commission is affirmed in part and reversed in part and the cause is remanded to the commission for further proceedings consistent with this opinion.
Judgment accordingly.
Compare EOG with Bd. of Commrs. v. Pub. Util. Comm. (1982), 1 Ohio St. 3d 125 (post-test-year adjustment for line clearance allowed).
See, e.g., Bd. of Commrs., supra, fn. 3.
The commission’s recognition of “much more current test years” is borne out in the instant case as appellant filed a notice of intent to apply for a rate increase in October 1981 with another planned for mid-1982.
OCC witness Miller expressed this view, stating that “* * * [selectivity] is the problem I have with the whole annualization procedure. It’s not so much that I disagree with the fact that some figures may not be more properly adjusted, but all things should be looked at and adjusted has been my problem.” See, generally, Catalant, Rate Making in an Inflationary Context: Theories and Applications, 110 Pub. Util. Fort., April 15, 1982, at page 53.
Appellant also asserts that “* * * [t]he rates established * * * without recognition of the known and measurable wage increase are unreasonable and confiscatory,” but offers little to support the contention. The record does contain exhibits comparing the actual payroll expenses for September 1981 ($7,255,717) and November 1981 ($7,183, 568), but appellant does not refer to these or any other calculations in making the argument that denial of the post-test-year wage adjustment is somehow confiscatory. Based on these figures, moreover, it would be difficult for appellant to argue unrepresentativeness, much less, confiscation.
A third important precept to be drawn from the federal cases, that “[t]he Constitution does not bind rate-making bodies to the service of any single formula or a combination of formulas,” Natural Gas Pipeline Co., supra, at page 586; Hope Natural Gas Co., supra, at page 600; Permian Basin Area Rate Cases, supra, at page 800, need not concern us because the General Assembly has prescribed a statutory ratemaking formula for the commission to follow in contradistinction to the broad grant of authority delegated by Congress to the Federal Power Commission (and now FERC) to establish rates under the Natural Gas Act as amended, Sections 717 et séq., Title 15, U.S. Code.
Accordingly, it is unnecessary to reprise the constitutional formula based on the rule of Smyth v. Ames (1898), 169 U.S. 466, 547 (“fair return upon * * * value”), the controversy engendered by Smyth during the years of its ascendancy, see, e.g., Missouri, ex rel. Southwestern Bell Tel. Co., v. Pub. Serv. Comm. (1923), 262 U.S. 276, 289 (Brandeis, J., concurring), or the prudent investment theory proposed by Justice Brandéis in Southwestern Bell to supplant Smyth and provide a more workable mode of constitutional analysis.
The confiscation clause of the Fifth Amendment applies to the states through the Due Process Clause of the Fourteenth Amendment. See Webb’s Fabulous Pharmacies, Inc. v. Beckwith (1980), 449 U.S. 155.
R.C. 4905.22 provides in pertinent part:
“Every public utility shall furnish necessary and adequate service and facilities, and every public utility shall furnish and provide with respect to its business such instrumentalities and facilities, as are adequate and in all respects just and reasonable. * * *”
Cf. West Ohio Gas Co. v. Pub. Util. Comm. (1935), 294 U.S. 63, 78 (Stone, J., concurring): “* * * The property for which constitutional protection is invoked is that ‘used and useful in the public service,’ not the enlarged business of the future which petitioner hopes to obtain through the present expenditure of money. I know of no constitutional principle upon which this expenditure must be taken from the pockets of the patrons of the present business, any more than the cost of future service lines required to carry on the new business. * * *”
Although Justice Stone made the above-quoted statement to express his disagreement with the expansive constitutional protection afforded “prudent outlay” by his brethren, his narrower conception of that which the Constitution protects became the majority position in Natural Gas Pipeline Co., an opinion delivered by Chief Justice Stone. Moreover, Justice Stone joined the Hope Natural Gas Co. majority, which delimited the constitutional inquiry even further by deleting the references to “constitutional requirements” and “the limits of due process” that the concurring justices in Natural Gas Pipeline Co. found objectionable.
Am. Sub. S.B. No. 378 as passed by the Senate included the following language, offered to amend R.C. 4909.154:
“In its establishment of just and reasonable rates for public utilities under section 4909.15 of the Revised Code, the public utilities commission shall allow any expenditures incurred in the provision of public utility services unless such expenditures are found by the commission to have resulted from imprudent management.”
This proposed amendatory language was deleted by the House of Representatives and did not reappear in the final version of the bill. See Am. Sub. S.B. No. 378.
Although Section 7 of Am. Sub. S.B. No. 378 as passed by the Senate, stated that, “Section 4909.154 of the Revised Code, as amended in Section 1 of this act, is not intended to reverse Consumers’ Counsel v. Public Utilities Commission (1981), 67 Ohio St. 2d 153 [21 O.O.3d 96], with respect to those specific capital costs that were disallowed in that case,” the “any expenditures” language of the amendment would have broadened the range of allowable expenses considerably. That the General Assembly chose not to enact this proposed provision is further evidence that our decision in CEI comports with the legislative intention underlying the ratemaking statutes.
Ohio Adm. Code 4901:1-9-05 provides in pertinent part:
“The system of accounts and records, identified and designated as ‘Uniform System of Accounts Prescribed for Public Utilities and Licensees, effective January 1, 1961,’ as adopted by the Federal Power Commission, is adopted by this Commission effective as of January 1, 1961, for electric light companies operating within the State of Ohio which are subject to the jurisdiction of the Federal Power Commission except to the extent that the provisions of said Uniform System of Accounts are inconsistent in any way with the outstanding orders of this Commission pertaining to the accounting treatment to be followed with respect to emergency facilities and the Federal income tax results thereof and with respect to accelerated depreciation and the Federal income tax results thereof. This Commission reserves to itself the right to require the creation and maintenance of such additional accounts as may hereafter be prescribed, to cover the accounting procedure of such electric light companies operating in the State of Ohio. * * *”
The commission acknowledged the distinction between accounting and ratemaking in its opinion dated March 17, 1982, in case Nos. 81-146-EL-AIR and 81-1565-EL-UNC, stating, at page 28, that “although we cannot allow an amortization allowance for ratemaking purposes, for book purposes the applicant is authorized to amortize the balances assignable to the terminated nuclear units over an appropriate period of time, not to exceed 15 years.” See Consumers’ Counsel v. Pub. Util. Comm. (1983), 4 Ohio St. 3d 111.
Appellant’s argument based on the Uniform System of Accounts is further flawed by its internal inconsistency. As OCC recognized, “[ajppellant did not and cannot explain the contradiction between its apparent recognition that Account 182 covers ‘extraordinary property losses’ and its simultaneous claim that Account 182 relates to ‘normal expenses.’ ”
At oral argument appellant briefly mentioned Killen but presented no argument relating thereto, relying instead on its briefs.
The commission order did not specifically refer to “the increase in investment risk resulting from the [CEI] decision,” as did the order in case Nos. 81-146-EL-AIR and 81-1565-EL-UNC (at page 40), but it is quite clear that the commission is fully cognizant of CEL Indeed, it is the commission’s position that the instant appeal “concerns the definition of risks * * * [and CEI] merely defined the economic risks and benefits under Ohio law. One of the risks is that investors, not consumers, will be required to pay for plants which will never provide service to ratepayers. This, of course, may make Ohio utilities’ capital and debt less attractive to investors, but it does not make rates confiscatory.”
Concurrence in Part
concurring in part and dissenting in part. I concur in Parts I
and III of the majority opinion. As to Part II, however, I dissent. This court has traditionally upheld the test-year concept. Part I of the majority opinion, Consumers’ Counsel v. Pub. Util. Comm. (1981), 67 Ohio St. 2d 372 [21 O.O.3d 234], and Ohio Water Service Co. v. Pub. Util. Comm. (1983), 3 Ohio St. 3d 1, enhance that tradition. Nevertheless, the majority fails to recognize that the issue in Part II is essentially the same as that in Part I: whether this court will reverse the decision of the Public Utilities Commission to exclude a post-test-year expense from consideration. Both Consumers’ Counsel, supra, and Ohio Water Service, supra, lead to the same conclusion. We should affirm the decision of the Public Utilities Commission
We should not apply or construe R.C. 4909.161. Nothing in that provision suggests that it was intended to supersede the test-year concept. Furthermore, its application may violate the constitutional prohibition against the retroactive application of statutes, see Section 28, Article II of the Ohio Constitution, and the statutory presumption in favor of prospective laws, see R.C. 1.48, because R.C. 4909.161 became effective after the original tax liability accrued and after the test year.
Accordingly, I would affirm the decision of the Public Utilities Commission as to all three issues before this court.
Concurrence in Part
concurring in part and dissenting in part. I agree with the majority’s resolution of the second and third issues. However, with respect to the first issue, the denial of appellant’s post-test-year wage adjustment, I dissent on the basis of my dissenting opinions in Consumers’ Counsel v. Pub. Util. Comm. (1981), 67 Ohio St. 2d 372, 376 [21 O.O.3d 234], and Ohio Water Service Co. v. Pub. Util. Comm. (1983), 3 Ohio St. 3d 1, 4.
