In re Application of Ohio Power Co. (Slip Opinion)
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as In re Application of Ohio Power Co., Slip Opinion No. 2018-Ohio-4697.]
NOTICE
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SLIP OPINION NO. 2018-OHIO-4697
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as In re Application of Ohio Power Co., Slip Opinion No. 2018-Ohio-4697.]
Public utilities—Electric-security plan—Party seeking reversal of an order of the commission must show that it has been or will be harmed by the order—No harm or prejudice to ratepayers was caused by Public Utilities Commission‘s approval of a zero-rate power-purchase rider—Appeal
O‘CONNOR, C.J.
{¶ 1} Appellants, Office of Ohio Consumers’ Counsel (“OCC“) and the Ohio Manufacturers’ Association Energy Group (“OMAEG“), have appealed appellee Public Utility Commission‘s decision to approve the third electric-security plan (“ESP“) of intervening appellee, Ohio Power Company. OCC and OMAEG challenge the decision on the ground that the commission‘s approval of the Power Purchase Agreement (“PPA“) Rider as a component of the ESP was reversible error. Because we determine that OCC and OMAEG have failed to demonstrate prejudice or harm caused by the ESP Order, we dismiss the appeal.
{¶ 2}
{¶ 3} On February 25, 2015, the commission approved Ohio Power‘s third ESP. As part of that ESP, the commission authorized the PPA Rider. Pub. Util. Comm. Nos. 13-2385-EL-SSO and 13-2386-EL-AAM (Feb. 25, 2015) (“ESP Order“). As originally proposed, the PPA Rider was based on Ohio Power‘s agreement to purchase power from the Ohio Valley Electric Corporation (“OVEC“). The intended purpose of the rider was to provide a financial hedge against fluctuating prices in the wholesale-power market in order to stabilize retail customer rates. The PPA Rider works as either a charge or a credit to Ohio Power‘s retail customers. As designed, Ohio Power purchases energy and capacity under its contract with OVEC. PJM Interconnection (“PJM“) operates a competitive wholesale electricity market where rates are set.1 If the revenue generated from sales into the PJM market is lower than the costs of the power, Ohio Power‘s customers would pay a surcharge to Ohio Power through the PPA Rider to make up the difference. But if the PJM market rates are higher than the power costs, customers would receive a credit through the PPA Rider. According to Ohio Power, OVEC‘s costs are relatively stable in comparison to the wholesale-power market, and they rise and fall in a manner that is countercyclical to the market, thereby creating a hedge for ratepayers.
{¶ 4} Although the commission approved the PPA Rider mechanism in the ESP case, it refused to allow Ohio Power to recover any costs through the rider. The PPA Rider was approved only as a placeholder rider with the rate set at zero. The commission required Ohio Power to demonstrate in a separate proceeding that it was entitled to cost recovery through the PPA Rider.
{¶ 5} OCC and OMAEG sought rehearing of the ESP Order in the ESP case. And in a separate proceeding, Ohio Power made a request to recover its costs under the PPA Rider, which the commission granted (“PPA Rider case“). Ratepayers started paying charges under the PPA Rider on January 1, 2017, three months before the commission issued the final rehearing entry in the ESP case.
{¶ 6} OCC and OMAEG have instituted two appeals. The present appeal is from the ESP Order in the ESP case; OCC and OMAEG challenge only the zero-rate placeholder PPA Rider and its effect on the commission‘s approval of the ESP. The commission‘s order in the PPA Rider case allowing Ohio Power to recover costs under that rider is the subject of an appeal in Supreme Court case No. 2017-0752.
II. STANDARD OF REVIEW
{¶ 8} ”
III. ANALYSIS
{¶ 9} It is well settled that this court will not reverse an order of the commission unless the party seeking reversal shows that it has been harmed or prejudiced by the order. Holladay Corp. v. Pub. Util. Comm., 61 Ohio St.2d 335, 402 N.E.2d 1175 (1980), syllabus. For the reasons that follow, we find that OCC and OMAEG have not shown harm or prejudice caused by the ESP Order that is the subject of this appeal.
A. OCC has not demonstrated that ratepayers suffered actual harm or prejudice from the ESP Order
{¶ 10} OCC first argues that concrete harm stems from the ESP Order because customers have been paying unlawful ESP rates since June 2015. According to OCC, the commission acted unlawfully and unreasonably when it approved the ESP without properly analyzing all the terms and conditions of the plan as required by
{¶ 11} OCC asserts that the commission‘s failure to consider the costs and benefits of the PPA Rider as required under the statutory ESP test has resulted in ratepayers having to pay unlawful ESP rates. There is no merit to this argument. OCC never explains how the commission was supposed to evaluate the costs and benefits of the PPA Rider when those benefits and costs were not known at that time. Moreover, even if the commission did err in failing to fully evaluate the PPA Rider under the statutory test, OCC has not shown how this makes the other rates charged under the ESP unlawful. To show
{¶ 12} Second, OCC alleges that it was harmed because it was prevented from effectively challenging the PPA Rider in the ESP case because there was no information about the costs and details of the PPA Rider in that case. There is no merit to this argument. OCC‘s claim of harm ignores that the commission did consider the impact of the PPA Rider when it conducted the statutory test under
{¶ 13} Finally, OCC maintains that the commission‘s finding that the PPA Rider is a “charge” under
B. We decline to address appellants’ claims that ratepayers were at risk of imminent or future harm rising from the ESP Order
{¶ 14} OCC and OMAEG both argue that ratepayers were at risk of imminent or future harm from the ESP Order. OCC asserts that harm to consumers from the ESP Order “was concrete and * * * imminent” because approving the PPA Rider as a placeholder rider was a “prelude” to a rate increase. OMAEG similarly claims that its ratepayers suffered “irreparable harm” from the ESP Order because the commission established the PPA Rider in the ESP case and then used that rider in a later proceeding to increase rates. Because OCC and OMAEG are able to assert claims of actual harm or prejudice in the PPA Rider appeal, see Supreme Court case No. 2017-0752, however, there is no reason for us determine here whether there is merit to this argument.
C. OMAEG has not demonstrated harm from regulatory delay
{¶ 15} OMAEG argues that ratepayers were harmed by the establishment of the placeholder PPA Rider in the ESP Order because the commission took years to issue a final, appealable order in the ESP case. OMAEG has not carried its burden here. As discussed, the PPA Rider approved in the ESP Order did not allow Ohio Power to recover any costs from customers. So OMAEG‘s claim that its “customers have suffered substantial monetary
{¶ 16} OMAEG also claims that it suffered prejudice because the commission thwarted its appellate rights by waiting to rule on rehearing applications until after approving cost recovery through the PPA Rider. The commission did defer ruling on certain rehearing issues related to the PPA Rider due to uncertainty with respect to federal wholesale-energy-market reform proposals, environmental regulations, and federal litigation involving similar state-approved wholesale-energy charges. The federal litigation included a challenge to the proposed PPA Rider at the Federal Energy Regulatory Commission. Electric Power Supply Assn. v. AEP Generation Resources, 155 F.E.R.C. ¶ 61,102 (Apr. 27, 2016). Even so, there are a number of problems with OMAEG‘s claim, and we reject it.
{¶ 17} First, OMAEG‘s argument is speculative, as no evidence exists that the commission intentionally refused to rule promptly. Second, OMAEG does not engage in the type of analysis necessary to prevail on this issue. As noted, the commission explained why it deferred ruling on certain rehearing issues related to the PPA Rider. Yet OMAEG makes no argument that the delay at the commission was unreasonable or unjustified. We therefore reject its argument on this point.
IV. CONCLUSION
{¶ 18} The party seeking reversal of the commission‘s order must demonstrate prejudice or harm from the order on appeal. Holladay Corp. v. Pub. Util. Comm., 61 Ohio St.2d 335, 402 N.E.2d 1175 (1980), at syllabus; AK Steel Corp. v. Pub. Util. Comm., 95 Ohio St.3d 81, 88, 765 N.E.2d 862 (2002). OCC and OMAEG have not shown any harm or prejudice to ratepayers caused by the commission‘s approval of the PPA Rider in the ESP Order. As appellants have failed to carry their burden before this court, we dismiss this appeal.
Appeal dismissed.
O‘DONNELL, KENNEDY, FRENCH, FISCHER, DEWINE, and DEGENARO, JJ., concur.
Bruce J. Weston, Maureen R. Willis, and William J. Michael, for appellant Office of the Ohio Consumers’ Counsel.
Carpenter Lipps & Leland, L.L.P., and Kimberly W. Bojko, for appellant Ohio Manufacturers’ Association Energy Group.
Michael DeWine, Attorney General, and Steven L. Beeler, William L. Wright, and Werner L. Margard III, Assistant Attorneys General, for appellee.
Steven T. Nourse, Matthew S. McKenzie, and Christen M. Blend; and Porter, Wright, Morris & Arthur, L.L.P., Kathleen M. Trafford, and L. Bradfield Hughes, for intervening appellee.