IN RE APPLICATION OF COLUMBUS SOUTHERN POWER COMPANY FOR ADMINISTRATION OF THE SIGNIFICANTLY EXCESSIVE EARNINGS TEST; OHIO ENERGY GROUP ET AL., APPELLANTS AND CROSS-APPELLEES; COLUMBUS SOUTHERN POWER COMPANY, APPELLEE AND CROSS-APPELLANT; PUBLIC UTILITIES COMMISSION OF OHIO, APPELLEE.
No. 2011-0751
Supreme Court of Ohio
Submitted March 21, 2012—Decided December 6, 2012.
134 Ohio St.3d 392, 2012-Ohio-5690
CUPP, J.
{¶ 1} Electric distribution utilities that opt to provide service under an electric security plan (“ESP“) must undergo an annual earnings review. If their plan resulted in “significantly excessive earnings” compared to similar companies, the utility must return the excess to its customers.
{¶ 2} There are three appeals from the order. Columbus Southern Power (“CSP“) asserts that
Factual and Procedural Background
{¶ 3} Ohio requires electric distribution utilities to provide consumers with “a standard service offer of all competitive retail electric services necessary to maintain essential electric service to consumers, including a firm supply of electric generation service.”
{¶ 4} The statute does not provide a detailed mechanism for establishing rates under an ESP. Plans may contain any number of provisions within a variety of categories so long as the plan is “more favorable in the aggregate” than the expected results of a market-rate offer.
{¶ 5}
With regard to the provisions that are included in an electric security plan under this section, the commission shall consider, following the end of each annual period of the plan, if any such adjustments resulted in excessive earnings as measured by whether the earned return on common equity of the electric distribution utility is significantly in excess of the return on common equity that was earned during the same period by publicly traded companies, including utilities, that face comparable business and financial risk, with such adjustments for capital structure as may be appropriate. Consideration also shall be given to the capital requirements of future committed investments in this state.
{¶ 6} The utility bears the “burden of proof for demonstrating that significantly excessive earnings did not occur.”
{¶ 7} In the case below, the commission reviewed the companies’ 2009 earnings. The companies had proposed to exclude from review certain revenue from “off-system sales,” that is, wholesale sales by the companies to nonretail customers. Several intervenors opposed the companies’ analysis. OEG argued that the statute did not permit the commission to exclude any earnings from review. IEU, in contrast, argued that many more items of revenue should have been excluded. And CSP and Ohio Power argued that the statute requiring earnings review was unconstitutionally vague.
{¶ 8} The commission rejected all of these challenges. On the merits, the commission eliminated the off-system-sales revenue from review. Pub. Util.
{¶ 9} IEU and OEG appealed, and CSP filed a cross-appeal. The Ohio Partners for Affordable Energy filed an amicus brief, as did the FirstEnergy operating companies.
Discussion
{¶ 10} This case presents three separate appeals. CSP raises a constitutional, void-for-vagueness challenge; OEG and IEU raise different arguments, each asserting that the commission misapplied the statute. We consider CSP‘s constitutional argument first.
CSP‘s Argument
{¶ 11} CSP offers a single argument for overturning the order—that the statute requiring earnings review,
I. Standard of review
{¶ 12} First, as a general matter, CSP bears a heavy burden of proof in challenging the constitutionality of an Ohio statute. CSP must establish beyond a reasonable doubt that the statute is unconstitutional. Arnold v. Cleveland, 67 Ohio St.3d 35, 38-39, 616 N.E.2d 163 (1993).
{¶ 13} CSP‘s vagueness challenge faces an uphill climb for another reason. Tolerance for vagueness “depends in part on the nature of the enactment.” Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 498, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982). Some statutes trigger relatively strict vagueness review, such as eminent-domain statutes, Norwood v. Horney, 110 Ohio St.3d 353, 2006-Ohio-3799, 853 N.E.2d 1115, ¶ 88, statutes imposing criminal sanctions, Roark & Hardee L.P. v. Austin, 522 F.3d 533, 552 (5th Cir.2008), and statutes implicating constitutionally protected rights, Columbia Gas Transm. Corp. v. Levin, 117 Ohio St.3d 122, 2008-Ohio-511, 882 N.E.2d 400, ¶ 42.
{¶ 14} In contrast, “laws directed to economic matters are subject to a less strict vagueness test than laws interfering with the exercise of constitutionally protected rights.” Id.; see also, e.g., Hoffman Estates, 455 U.S. at 498 (“economic regulation is subject to a less strict vagueness test * * *“). That is, a
{¶ 15}
{¶ 16} CSP rejoins that Norwood v. Horney, 110 Ohio St.3d 353, 2006-Ohio-3799, 853 N.E.2d 1115, requires heightened scrutiny here because this case involves “the taking of private property rights.” We did not formulate our holding in Norwood so broadly, however. We held that heightened scrutiny applies “when a court reviews an eminent-domain statute or regulation.” Id. at ¶ 88. CSP makes no express argument that
{¶ 17} Norwood does not require heightened scrutiny here. In that case, we analyzed a law providing for the physical appropriation of real estate for public use, not a law (like this one) that imposes a monetary assessment. Whether such a law causes a taking is a difficult question, and CSP does not address it. See, e.g., McCarthy v. Cleveland, 626 F.3d 280, 285 (6th Cir.2010) (“all circuits that have addressed the issue have uniformly found that a taking does not occur when the statute in question imposes a monetary assessment that does not affect a specific interest in property“); see also Swisher Internatl., Inc. v. Schafer, 550 F.3d 1046, 1057 (11th Cir.2008), citing E. Ents. v. Apfel, 524 U.S. 498, 118 S.Ct. 2131, 141 L.Ed.2d 451 (1998) (“Five Supreme Court Justices have expressed the view that the Takings Clause does not apply where there is a mere general liability * * * and where the challenge seeks to invalidate the statute rather than merely seeking compensation for an otherwise proper taking“).
{¶ 18} We did not address that question in Norwood, but we did address whether heightened scrutiny applied to civil penalties, and the answer was no: “[R]egulations that are directed to economic matters and impose only civil penalties are subject to a ‘less strict vagueness test.‘” Id., 110 Ohio St.3d 353, 2006-Ohio-3799, 853 N.E.2d 1115, at ¶ 85, quoting Hoffman Estates, 455 U.S. at 498, 102 S.Ct. 1186, 71 L.Ed.2d 362. This language describes
II. R.C. 4928.143(F) is not unconstitutionally vague
{¶ 19} Having established that a more lenient standard of review applies, we now address the merits of CSP‘s vagueness challenge.
A. We consider CSP‘s constitutional challenge as applied to the facts of this case
{¶ 21} Litigants may challenge the constitutionality of a statute on its face or as applied. CSP claims that
{¶ 22} Generally, a court examining a facial-vagueness challenge to a statute that implicates no constitutionally protected conduct will uphold that challenge only if the statute is impermissibly vague in all of its applications. Columbia Gas Transm. Corp. v. Levin, 117 Ohio St.3d 122, 2008-Ohio-511, 882 N.E.2d 400, ¶ 43, citing Hoffman Estates, 455 U.S. at 494-495, 102 S.Ct. 1186, 71 L.Ed.2d 362. CSP has not presented the arguments necessary to support a facial challenge. It does not argue that
{¶ 23} That being the case, we “consider whether [the] statute is vague as applied to the particular facts at issue.” Holder v. Humanitarian Law Project, — U.S. —, 130 S.Ct. 2705, 2718-2719, 177 L.Ed.2d 355 (2010); see also Hoffman Estates at 495 (a party “who engages in some conduct that is clearly proscribed cannot complain of the vagueness of the law as applied to the conduct
B. CSP has not shown that R.C. 4928.143(F) is vague as applied to the facts of this case
{¶ 24} CSP has not shown that the “statute is vague as applied to the particular facts at issue.” Holder, — U.S. —, 130 S.Ct. at 2718-2719, 177 L.Ed.2d 355. The company has not challenged any of the commission‘s determinations under
C. R.C. 4928.143(F) provides substantial guidance to the commission
{¶ 25} And even leaving aside the lack of an as-applied argument, we find that the statute provides considerable guidance to the commission. The company asserts that
{¶ 26} Whether a plan “resulted in excessive earnings” must be “measured by whether the earned return on common equity of the electric distribution utility is significantly in excess of the return on common equity that was earned during the same period by publicly traded companies, including utilities, that face comparable business and financial risk, with such adjustments for capital structure as may be appropriate.”
{¶ 27} Having done all that, it must then determine whether CSP‘s earnings are “significantly excessive.”
{¶ 28} Despite fixing its argument on the term “significantly,” CSP cites no case law evaluating its use. But many courts have upheld the term against vagueness challenges. E.g., VIP of Berlin, L.L.C. v. Berlin, 593 F.3d 179, 186-191 (2d Cir.2010) (rejecting claim that “significant portion” is unconstitutionally vague); Williams v. Astrue, D.Kansas No. 09-1341-SAC, 2010 WL 4291918, at *4 (Oct. 26, 2010) (holding in review of benefits order that “the word ‘significant’ is not unduly vague“); PrimeCo Personal Communications, L.P. v. Illinois Commerce Comm., Ill. Cir.Ct., Cook Cty. No. 98 CH 05500, 2000 WL 34016430, at *17 (Jan. 11, 2000) (the phrase “no significant impact on the net income” is not vague); Pennsylvania v. Fahy, 512 Pa. 298, 315, 516 A.2d 689 (1986) (rejecting claim that the term “significant history” is vague and overbroad); F. Ronci Co., Inc. v. Narragansett Bay Water Quality Mgt. Dist. Comm., R.I. Sup.Ct. No. C.A. NO. 87-0428, 1988 WL 1016804, at *4 (Feb. 9, 1988) (“The Court concludes that the use of the term ‘significant quantities’ does not render the statutory language unconstitutionally vague“); but see, e.g., Knoxville v. Entertainment Resources, L.L.C., 166 S.W.3d 650, 652, 658 (Tenn.2005) (holding in case involving First Amendment concerns that “the phrase ‘substantial or significant portion of its stock and [sic] trade’ is impermissibly vague“).
{¶ 29} All of these required determinations limit the scope of the commission‘s analysis. Further, they provide numerous points that may be litigated below and challenged on appeal to provide a check on arbitrary enforcement by the commission. See Skilling, — U.S. —, 130 S.Ct. at 2933, 177 L.Ed.2d 619. In making its argument, CSP repeatedly quotes only two or three words of the statute (“significantly excessive earnings“) as though it provided none of the foregoing guidance. But the statute says much more, and we cannot say that “‘no standard of conduct is specified at all.‘” Anderson, 57 Ohio St.3d at 171, 566 N.E.2d 1224, quoting Coates, 402 U.S. at 614, 91 S.Ct. 1686, 29 L.Ed.2d 214.
D. There are no “fair notice” concerns in this case
{¶ 30} We also hold that this case presents no concerns about fair notice. A primary concern underpinning the vagueness doctrine is that “[v]ague laws may trap the innocent by not providing fair warning.” Hoffman Estates, 455 U.S. at 498, 102 S.Ct. 1186, 71 L.Ed.2d 362, quoting Grayned v. Rockford, 408 U.S. 104, 108, 92 S.Ct. 2294, 33 L.E.2d 222 (1972). CSP cannot credibly complain that it lacked notice; it not only had notice of
III. CSP‘s counterarguments
{¶ 31} CSP raises several counterarguments, but we find them unpersuasive. First, it cites no cases reviewing public-utility-regulatory statutes, but depends entirely on cases that involved relatively strict scrutiny and thus are not on point. Most of the cited cases reviewed statutes imposing criminal penalties, and all required a stricter standard of review than applicable here. See Cline v. Frink Dairy Co., 274 U.S. 445, 453-454, 47 S.Ct. 681, 71 L.Ed. 1146 (1927); Belle Maer Harbor v. Charter Twp. of Harrison, 170 F.3d 553, 557 (6th Cir.1999); Carter v. Welles-Bowen Realty, Inc., 719 F.Supp.2d 846, 852 (N.D.Ohio, 2010); Norwood v. Horney, 110 Ohio St.3d 353, 2006-Ohio-3799, 853 N.E.2d 1115, ¶ 88.
{¶ 32} CSP also argues that the administrative process employed by the commission is evidence of the vagueness of the statute. But this point is unavailing. Courts have often recognized that a “process of interpretation” should be allowed to flesh out statutory standards. E.g., Bauer v. Shepard, 620 F.3d 704, 717 (7th Cir.2010) (the Supreme Court is “chary of holding laws unconstitutional ‘on their face’ precisely because they have recognized that vagueness will be reduced through a process of interpretation“); Minnesota ex rel. Alexander v. Block, 660 F.2d at 1254, fn. 35 (“Many statutes * * * require administrative and judicial construction to clarify specific language. Such statutes are not unconstitutionally vague“).
{¶ 33} Finally, CSP concludes its argument by asserting that several features of
{¶ 34} In sum, we reject CSP‘s argument that
IEU‘s and OEG‘s Arguments
{¶ 35} We turn to the remaining two appeals from OEG and IEU. Both concern the commission‘s ability to adjust the utility‘s earnings before considering whether those earnings are significantly excessive. The commission removed certain revenue from off-system sales from CSP‘s earnings. Although OEG and IEU raise different (and in some ways opposite) arguments, we must reject both of them.
{¶ 36} While we generally review questions of law de novo, we will defer to the commission‘s interpretation of a statute “where there exists disparate competence between the respective tribunals in dealing with highly specialized issues.” Ohio Consumers’ Counsel v. Pub. Util. Comm., 58 Ohio St.2d 108, 110, 388 N.E.2d 1370 (1979). One area in which we have “consistently deferred to the expertise of the commission” is in determining rate-of-return matters. Ohio Edison Co. v. Pub. Util. Comm., 63 Ohio St.3d 555, 561, 589 N.E.2d 1292 (1992), fn. 3.
{¶ 37} “Limited judicial review of a rate of return determination is sound” because “‘cost of capital analyses * * * are fraught with judgments and assumptions.‘” Ohio Consumers’ Counsel v. Pub. Util. Comm., 64 Ohio St.2d 71, 79, 413 N.E.2d 799 (1980), quoting In re Dayton Power & Light Co., Pub. Util. Comm. No. 78-92-EL-AIR, at 26, 29 P.U.R.4th 145 (Mar. 9, 1979). Thus, if a related determination is “fraught with similar judgments and assumptions,” it is “appropriate to apply a similar limited standard of review.” Id.; see also, e.g., Ohio Fuel Gas Co. v. Pub. Util. Comm., 174 Ohio St. 585, 602, 191 N.E.2d 347 (1963) (“In the end, the increase in earnings and rate of return allowed is a judgment figure established by the Public Utilities Commission in the exercise of its administrative expertise” [emphasis sic]).
{¶ 38} The statute under review is essentially a rate-of-return statute, and it requires numerous judgments regarding rate-of-return issues, so we review the commission‘s interpretations deferentially. Although
{¶ 39} We hold that it was. The commission explains in its brief that it understands
{¶ 40} This is a reasonable interpretation of
II. OEG‘s alternative interpretation of R.C. 4928.143(F) does not compel reversal
{¶ 41} In its appeal, OEG argues that contrary to the commission‘s interpretation, the commission cannot eliminate any earnings before conducting the earnings review. As noted above, the commission eliminated from CSP‘s earnings certain revenue from “off-system sales,” that is, wholesale sales by CSP to nonretail customers. Order at 27-30. According to OEG, this lowered CSP‘s excess earnings by $22.24 million.1 OEG argues that ”
{¶ 42} But as just discussed, the statutory language does allow such an inference and does not definitively prohibit it. It does not expressly forbid adjustments for non-ESP earnings, nor does it use the phrase “all earnings” or some equivalent. OEG‘s interpretation is not necessarily unreasonable, but unlike the commission‘s, OEG‘s is not entitled to deference.
{¶ 43} We must reject OEG‘s challenge to the order.
III. IEU‘s counterarguments also lack merit
{¶ 44} IEU raises two basic arguments, but neither compels reversal.
A. In its first argument, IEU fails to show prejudice
{¶ 45} Whereas OEG argues that the commission should not have excluded any earnings from review, IEU argues that the commission should have excluded more. As IEU sees it, the commission may consider the companies’ earned return on equity only “from the ESP” and not “for all lines of regulated and unregulated businesses that reside within [the companies].” Therefore, IEU
{¶ 46} IEU has failed to show prejudice, as it must to warrant reversal. Ohio Consumers’ Counsel v. Pub. Util. Comm., 121 Ohio St.3d 362, 2009-Ohio-604, 904 N.E.2d 853, ¶ 12 (“this court will not reverse a commission order absent a showing by the appellant that it has been or will be harmed or prejudiced by the order“). In this proposition, IEU neither explains nor provides evidence of which adjustments the commission should have made but did not. This lack of evidence and explanation makes it impossible to know whether IEU was prejudiced by the alleged failure to “jurisdictionalize” CSP‘s earnings. Consequently, we must reject IEU‘s first argument.
B. IEU‘s second argument—that the commission should have eliminated CSP‘s transmission assets from review—also fails to demonstrate error
{¶ 47} IEU‘s second argument alleges that the commission should have excluded transmission assets when it excluded CSP‘s revenue from off-system sales. For any revenue excluded from review, it would be necessary to exclude the related portion of equity (i.e., the assets that earned the excluded return). Failing to do so would skew the rate of return too low. The commission did exclude some of CSP‘s equity to reflect the exclusion of off-system sales, order at 30, but IEU asserts that the commission did not remove enough equity—that it did not “include[] an adjustment to equity to transmission plant.”
{¶ 48} Because this argument is also speculative, we must reject it. IEU‘s argument turns on two questions of fact, both demanding substantial expertise in utility operations, accounting, and finance to answer: Should any of CSP‘s transmission assets have been excluded to reflect the exclusion of earnings from off-system sales? And if so, how much? Yet IEU does not point to any testimony or other evidence suggesting that such an exclusion would have been appropriate. Without this factual support, its argument cannot succeed.
{¶ 49} In fact, the testimony that IEU does cite cuts against its argument on both points. As to the first point—whether there should even be any exclusion of transmission assets—the witness cited by IEU stated on cross-examination, “[T]here‘s no way I could even begin to imagine how I would say that [transmission] is a component of off-system sales,” and also stated that he suspected that “transmission costs are * * * netted out of the profits from off-system sales.” As to the second point—what specific exclusion would be appropriate—the same witness suggested that calculating an adjustment would not be workable: he “could not figure out a way of cleanly * * * utilizing other aspects of the
{¶ 50} IEU also cites the testimony of an American Electric Power witness who acknowledged that the company had not “exclude[d] the earnings associated with the transmission business.” This says nothing about whether such an exclusion should have been made and, if so, the amount. Thus, it provides no support for IEU‘s argument.
{¶ 51} To overturn the commission on a question of fact, IEU must show that the order is “so clearly unsupported by the record as to show misapprehension, mistake, or willful disregard of duty.” AT & T Communications of Ohio, Inc. v. Pub. Util. Comm., 88 Ohio St.3d 549, 555, 728 N.E.2d 371 (2000). IEU has not shown that the order lacked record support; indeed, the only evidence IEU cites contradicts its own argument. Therefore, we reject it.
Conclusion
{¶ 52} For the foregoing reasons, we affirm the order. Contrary to CSP‘s assertion, the statute is not unconstitutionally vague. And neither OEG nor IEU has shown that the commission unreasonably interpreted or applied
Order affirmed.
O‘CONNOR, C.J., and LUNDBERG STRATTON, O‘DONNELL, LANZINGER, and MCGEE BROWN, JJ., concur.
PFEIFER, J., dissents.
PFEIFER, J., dissenting.
{¶ 53} This case presents this court‘s first opportunity to address the Public Utilities Commission of Ohio‘s application of the significantly-excessive-earnings test (“SEET“) established by
{¶ 54} This case tests whether the commission‘s discretion on SEET matters is truly susceptible of meaningful judicial review. This court cannot allow its deference to the commission‘s discretion to become an abdication of our duty to provide appellate review of the commission‘s orders. The commission‘s outra-
{¶ 55} Columbus Southern Power (“CSP“) requests that this court overturn the commission‘s order in this case because, it argues,
The Reasonableness of 17.6 Percent
{¶ 56} In this case, the commission determined CSP‘s SEET threshold to be 17.6 percent. That is, only a return on investment of more than 17.6 percent in 2009, a year when the United States’ economy was in a recession, would be considered significantly excessive in comparison to other similarly situated entities. Only at that number would CSP‘s profit be enough to trigger a refund to consumers.
{¶ 57} How did the commission get to 17.6 percent? By employing the highly complex statistical analysis known as “splitting the baby.” As the commission points out in its order, AEP-Ohio argued for a SEET threshold of 22.51 percent. The customer parties in the case put forth a proposed SEET threshold in the range of 11.58 percent to 13.58 percent, an average of 12.58 percent. With those numbers to work with, the commission apparently raced to the middle: the halfway point between the proposed SEETs of the customer parties and AEP-Ohio is 17.545 percent. AEP-Ohio got the .055 percent round-up.
{¶ 58} This might be all well and good were the numbers reflective of equally valid methodologies. But the commission‘s judgments before and after the case at issue support the number put forth by the customer parties.
{¶ 59} After the passage of Am.Sub.S.B. No. 221, the commission sought input from stakeholders to determine the methodology for determining what constitutes significantly excessive earnings. After a long process from October 2009 through April 2010 that included a workshop, a comment period, a period to reply to comments, and a question-and-answer period before the commission, the commission produced In re Investigation into the Development of the Significantly Excessive Earnings Test Pursuant to Amended Substitute Senate Bill for Electric Utilities, Pub. Util. Comm. No. 09-786-EL-UNC, a finding and order intended to provide guidance on the interpretation and application of
Having fully considered all the comments regarding establishing the threshold and in consideration of the discretion afforded the Commission in SB 221, the Commission concludes that “significantly excessive earnings” should be determined based on the reasonable judgment of the Commission on a case-by-case basis.
09-786-EL-UNC Finding and Order, 28-29. So much for predictability.
{¶ 60} Despite leaving the matter up to itself and its own judgment, the commission did set one important marker:
[T]he Commission is willing to recognize a “safe harbor” of 200 basis points above the mean in the comparable group. To that end, any electric utility earning less than 200 basis points above the mean of the comparable group will be found to not have significantly excessive earnings.
Id. at 28-29.
{¶ 61} It was that 200 basis points “safe harbor” that the customer parties based their excessive-earnings conclusion upon. Taking their calculation of a relevant return on investment of 9.58 percent for a comparable group of companies, they argued that significantly excessive earnings should run from the safe-harbor amount of 200 basis points up to 400 basis points. This would mean that significantly excessive earnings would fall somewhere between 11.58 and 13.58 percent. Instead, the commission established a figure 800 basis points above the figure that the customer parties determined as the mean of the comparable group of companies.
{¶ 62} Even accepting the commission‘s return-on-investment figure of 11 percent for comparable companies, the commission‘s 17.6 percent figure is over 600 basis points above the mean in the comparable group. The commission blew its safe harbor out of the water.
{¶ 63} And in a case announced in August of this year, In re Columbus S. Power Co., Pub. Util. Comm. Nos. 11-346-EL-SSO, 11-348-EL-SSO, 11-349-EL-AAM, and 11-350-EL-AAM, 2012 WL 3542177, *30 (Aug. 8, 2012), the commission prospectively set a SEET threshold at 12 percent for AEP-Ohio, finding it “appropriate to establish a significantly excessive earnings test (SEET) threshold to ensure that the Company does not reap disproportionate benefits
{¶ 64} That lower rate of return is appropriate for an industry with minimal risk, with built-in methods to recover costs from their customers. In In re Columbus S. Power Co. (Aug. 8, 2012), for instance, built-in protections for the utility include an alternative-energy rider, a generation-resource rider, a retail-stability rider, a distribution-investment rider, a pool-modification rider, a phase-in recovery rider, a transmission-cost-recovery rider, an enhanced-service reliability rider, an energy-efficiency and peak-demand reduction rider, an economic-development rider, and a storm-damage-recovery mechanism.
{¶ 65} Most importantly, the lower SEET is consistent with the policy of this state to “[e]nsure the availability to consumers of adequate, reliable, safe, efficient, nondiscriminatory, and reasonably priced retail electric service.”
Off-System Sales
{¶ 66} The commission also erred in excluding CSP‘s off-system sales from the calculation of its return on investment, without any statutory authority. This court has “complete and independent power of review as to all questions of law” in appeals from the commission. Ohio Edison Co. v. Pub. Util. Comm., 78 Ohio St.3d 466, 469, 678 N.E.2d 922 (1997). We should not forget that. This court has held that in matters of statutory interpretation, “we may rely on the expertise of a state agency in interpreting a law where ‘highly specialized issues’ are involved and ‘where agency expertise would, therefore, be of assistance in discerning the presumed intent of our General Assembly.‘” Ohio Consumers’ Counsel v. Pub. Util. Comm., 111 Ohio St.3d 300, 2006-Ohio-5789, 856 N.E.2d 213, ¶ 12, quoting Consumers’ Counsel v. Pub. Util. Comm., 58 Ohio St.2d 108, 110, 388 N.E.2d 1370 (1979).
{¶ 67} This is not a case in which this court needs to rely on the commission‘s interpretation of a statute. Indeed, we should not simply assume that any statute involving public utilities concerns “highly specialized issues.” Here, the General Assembly spells out in plain English what it means by “excessive earnings.” Excessive earnings are “measured by whether the earned return on common equity of the electric distribution utility is significantly in excess of the return on common equity that was earned during the same period by publicly traded companies, including utilities, that face comparable business and financial risk, with such adjustments for capital structure as may be appropriate.”
{¶ 69} Our deference to—or, too often, our reliance on—the commission‘s interpretation of statutes diminishes this court‘s role in reviewing the commission‘s determinations and shifts the balance too far in favor of the executive branch in the separation of powers. Ultimately, Ohio consumers pay the price for that deference. Judging from Ohio utilities’ status at the top of the heap in profits nationwide—CSP had the highest equity return of 143 investor-owned regulated electric utilities in the United States in 2009—that price is steep.
McNees, Wallace & Nurick, L.L.C., Samuel C. Randazzo, Frank P. Darr, and Joseph E. Oliker, for appellant and cross-appellee Industrial Energy Users-Ohio.
Boehm, Kurtz & Lowry, David F. Boehm, and Michael L. Kurtz, for appellant and cross-appellee Ohio Energy Group.
Bruce J. Weston, Ohio Consumers’ Counsel, Maureen R. Grady, Melissa R. Yost, and Kyle L. Verrett, for appellant and cross-appellee Ohio Consumers’ Counsel.
Steven T. Nourse and Matthew J. Satterwhite; and Porter, Wright, Morris & Arthur, L.L.P., Kathleen M. Trafford, and Daniel R. Conway, for appellee and cross-appellant Columbus Southern Power Company.
Michael DeWine, Attorney General, William L. Wright, Section Chief, and Thomas W. McNamee, Assistant Attorney General, for appellee Public Utilities Commission of Ohio.
Arthur E. Korkosz and Carrie M. Dunn, for amici curiae Ohio Edison Company, Cleveland Electric Illuminating Company, and Toledo Edison Company.
Colleen L. Mooney, for amicus curiae Ohio Partners for Affordable Energy.