68 Ohio St. 3d 559 | Ohio | 1994
Pursuant to R.C. 4909.191(C), Ohio Power has the burden of proving that its fuel acquisition and delivery costs are “fair, just, and reasonable.”
I
R.C. 4905.01(F) requires the commission to establish a cost for affiliate coal that is reasonable when compared to the price of coal “purchased from all independent like mining operations.” Appellants argue that the commission erred by comparing the aggregate cost of Ohio Power’s affiliate coal to the aggregate price of the company’s non-affiliate contract purchases. They contend (1) that the word “all” requires a comparison to non-affiliate coal purchases made by a larger, albeit unspecified, group of electric utilities, and (2) that the phrase “like mining operations” requires a comparison of the coal costs of each affiliated mine to purchases from non-affiliated mines which use the same mining techniques (e.g., longwall).
The phrase at issue begs the question: “Purchased by whom?” We find no support in . the language of the statute for appellants’ construction. Rather, the phrase’s only antecedent (“by the company”) supports the commission’s longstanding administrative interpretation of the statute (see Ohio Adm.Code 4901:1-11 — 10[G][12]
II
As set forth above, the stipulation provides that if Ohio Power is able to reduce its actual fuel costs during a given period below the predetermined price, the company may apply the difference to accelerate recovery of its affiliate mining investment, related liabilities, and direct closure-related costs.
While we reaffirm the general principles enunciated in the above cases, we note that we have also permitted a utility to recover other than its actual fuel acquisition and delivery costs through the EFC rate pursuant to R.C. 4905.301 and 4905.69,
Appellants argue that the above cases are not controlling, claiming that when the General Assembly subsequently enacted R.C. 4909.159 to specifically include the recovery of purchased power costs through the EFC rate, it explicitly excluded the recovery of all other non-acquisition or delivery costs by providing that “[n]o other charges may be allowed in the rule promulgated pursuant to divisions (C) and (E) of section 4905.69 of the Revised Code.” R.C. 4909.159(B). We disagree.
R.C. 4909.159 addresses only purchased power costs. The prohibition against recovering “other charges” through the EFC rate relates only to charges (e.g., demand charges) incurred in purchasing the power in question. Indeed, the statute permits recovery of even those charges in cases where the transaction reduces a utility’s fuel costs. The statute does not restrict the commission’s authority to establish other cost incentives for efficient fuel procurement practices under R.C. 4905.69(C), nor does it affect the commission’s authority under R.C. 4905.301. We recognized as much in Consumers’ Counsel v. Pub. Util. Comm. (1992), 63 Ohio St.3d 531, 589 N.E.2d 1273, in which we upheld the commission’s allowance of legal fees incurred in acquiring a new leasehold interest in nuclear fuel when the transaction significantly reduced the fuel costs of the utility and its customers.
Appellants do not dispute that Ohio Power will be provided an incentive to reduce its fuel costs under the stipulation and that the company’s consumers will receive a benefit to which they would not otherwise be entitled through the 0.22 mill per kilowatt hour energy credit. Moreover, as discussed above, the commission has found that the company’s affiliate coal prices at issue in this case are reasonable. Thus, the stipulation would provide an incentive to the company, which might not otherwise be present, to reduce those costs even further. Although the potential further reductions would not be immediately passed on to consumers, we cannot find that EFC customers would be paying more than they would have absent the stipulation. Indeed, the stipulated cap of 164 cents per
Based on the foregoing, the order of the commission is affirmed.
Order affirmed.
. Ohio Adm.Code 4901:1-11-10 provides in part:
“(G) Audit procedures for fuel supplies owned or controlled by the electric utility.
“The procedures which the auditor shall follow in reviewing fuel supplies owned or controlled by the electric utility are:
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“(12) Develop for each fuel supplier which is owned or controlled by the electric utility comparisons of the cost per million British thermal units of fuel supplied to the electric utility*564 during the EFC audit period to the cost per million British thermal units for similar quality coal purchased by the electric utility during the same period from all independent like mining operations under similar term contracts.”
. This difference amounted to $1,465,757 in PUCO No. 93-01-EL-EFC.
. R.C. 4905.301 provides:
“Nothing in this section shall preclude the use of a fuel component that creates positive efficiency incentives for minimizing the costs of electric service.”
“The public utilities commission shall promulgate a rule that * * * [establishes incentives, in terms of costs that may be recovered by electric light companies pursuant to a fuel component for the implementation and employment by such companies of efficient fuel procurement and utilization practices * *