MONONGAHELA POWER COMPANY, APPELLANT, v. PUBLIC UTILITIES COMMISSION OF OHIO ET AL., APPELLEES.
No. 2004-0305
Supreme Court of Ohio
Submitted October 26, 2004—Decided December 30, 2004.
104 Ohio St.3d 571, 2004-Ohio-6896
Background
{¶ 1} This is an appeal as of right by Monongahela Power Company (“Mon Power“) from decisions of the Public Utilities Commission of Ohio in In the Matter of the Application of the Monongahela Power Co. for Approval of a Market-Based Standard Serv. Offer & Competitive Bidding Process (Oct. 22, 2003) case No. 03-1104-EL-ATA, 2003 WL 22472140 (the “MBSSO case“). Mon Power was the applicant, and Industrial Energy Users—Ohio (“IEU“) was an intervening party in the MBSSO case. IEU has also intervened as an appellee in this appeal.
{¶ 2} The legal backdrop for this appeal is Am.Sub.S.B. No. 3, 148 Ohio Laws, Part IV, 7962, 7992 (“S.B. 3“), codified primarily at
{¶ 3} On June 22, 2000, in its restructuring case, Mon Power entered into a settlement agreement, styled a “Stipulation and Recommendation” (“the Stipulation“), with the commission‘s staff and with representatives of Mon Power‘s Ohio retail customers. The Stipulation purported to resolve all issues pertinent to Mon Power‘s statutorily required transition plan. The commission approved the Stipulation in its October 5, 2000 opinion and order in its case No. 00-02-EL-ETP, 2000 WL 1873291 (the “ETP1 Order“).
{¶ 5} On October 22, 2003, the commission issued an order in the MBSSO case (“the MBSSO Order“) denying approval of the winning bid and requiring Mon Power to continue its MDP to December 31, 2005, based on a finding that neither of the controlling statutory conditions for early ending of the MDP had been satisfied. Mon Power then filed an application for rehearing, which was denied on December 17, 2003. This appeal ensued.
MDP and its Early Ending
{¶ 6} While the subject of this appeal is the MBSSO Order issued on October 22, 2003, we must consider the ETP Order and the Stipulation that the commission approved in the ETP Order. In addition, we must focus on the meanings of the Stipulation‘s provisions.
{¶ 7} Central to this appeal is whether the Stipulation approved by the commission in the ETP Order shortened Mon Power‘s MDP with respect to its large commercial and industrial customers. The MDP is a statutorily defined term: ” ‘Market development period’ for an electric utility means the period of time beginning on the starting date of competitive retail electric service and ending on the applicable date for that utility as specified in section 4928.40 of the Revised Code, irrespective of whether the utility applies to receive transition revenues under this chapter.”
{¶ 8} The end of the MDP is also specified by statute.
{¶ 9} “For purposes of this chapter, the market development period shall not end earlier than December 31, 2005, unless, upon application by an electric utility, the commission issues an order authorizing such earlier date for one or more customer classes as is specified in the order, upon a demonstration by the utility and a finding by the commission of either of the following:
{¶ 10} “(a) There is a twenty per cent switching rate of the utility‘s load by the customer class.
{¶ 11} “(b) Effective competition exists in the utility‘s certified territory.”
{¶ 13} Mon Power argues that the commission approved an early end of its MDP as to its large commercial and industrial customers when, in the ETP Order, the commission approved the Stipulation that provided in Section IV: “For customers on the Company‘s Rate Schedule C with a demand greater than 300 kW, Rate Schedules CSH, D, K, P, and street lighting, the market development period shall be a three year period and end December 31, 2003.” (Emphasis added.) Mon Power further asserts: “Section IV of the Stipulation recognized that
{¶ 14} Mon Power argues that by adopting the Stipulation in its ETP Order, the commission approved the early ending of the MDP for large commercial and industrial customers with no contingency involving future proceedings or future findings by the commission. Mon Power bases its argument on the observation that Section IV of the Stipulation provides that the MDP for small (300kW and below) commercial customers was not shortened and that, in order to end the MDP for those customers early, Mon Power would have to make separate application in the future under
{¶ 15} Mon Power argues further that the only qualification on the commission‘s approval of the transition plan and the Stipulation in the ETP case was final approval of Mon Power‘s compliance tariffs and that Mon Power distributed its proposed compliance tariffs to all of the parties in the ETP case, including the commission‘s staff, for their review. The tariff sheets distributed for review and subsequently approved by the commission “expressly provided that the default
{¶ 16} The commission and intervening appellee IEU contend that the commission‘s approval of Section IV of the Stipulation in the ETP Order did not have the effect of authorizing a shortened MDP for Mon Power‘s large commercial and industrial customers. They contend that the commission‘s approval not only did not have that effect, it simply could not have had that effect.
{¶ 17} They argue correctly that the only way the MDP can be ended before December 31, 2005, is by compliance with
{¶ 18} The commission readily concedes that Section IV of the Stipulation evidences that Mon Power took the first step to shorten its MDP for large commercial and industrial customers. In Section IV of the Stipulation, Mon Power made application to the commission for approval of a shortened MDP: “By this Stipulation, Monongahela Power, supported by the other Signatory Parties, applies to the Commission for authorization of a market development period termination date for industrials and large commercial customers of December 31, 2003, based upon agreement to forego the recovery of transition costs beyond that date (see
{¶ 19} The next requisite statutory step is a demonstration by the utility that either effective competition exists or there is a 20 percent customer switching rate. However, there is nothing in the Stipulation or in the ETP Order indicating that Mon Power made a showing of the existence of the requisite competition or switching rate. Indeed, Mon Power could not have made such a showing because the ETP Order was issued October 5, 2000, almost three months prior to the starting date of competitive retail electric service on January 1, 2001, as provided in
{¶ 21} Mon Power argues that, considering the factors mentioned in the second paragraph of
{¶ 22} As to the requisite switching or effective competition, we consider the commission‘s position more plausible and persuasive than Mon Power‘s.
{¶ 23} Mon Power‘s position is the only one it can take as to the requirements of
{¶ 24} Therefore, we conclude as follows: The only way that Mon Power‘s MDP for large commercial and industrial customers could have been ended before December 31, 2005, was by compliance with
{¶ 25} Mon Power professes that as of the date of the ETP Order and continuing to the present, its corporate belief has been that the ETP Order had the effect of ending its MDP for large commercial and industrial customers as of
{¶ 26} Nevertheless, to the extent that Section IV of the Stipulation approved by the commission in the ETP Order can be considered an order authorizing the early end of Mon Power‘s MDP, that order was premature. It was based upon an optimistic assumption that the requisite levels of the switching rate or effective competition would be achieved by December 31, 2003, an assumption that proved to be unwarranted, making any such order ending the MDP unenforceable because the order exceeded the statutory authority of the commission.
{¶ 27} We conclude that, as a matter of law, the ETP Order did not end Mon Power‘s MDP as to its large commercial and industrial customers before December 31, 2005.
Mon Power‘s Other Arguments
{¶ 28} Mon Power argues that the commission was bound by its decision in the ETP Order that Mon Power‘s MDP for its large commercial and industrial customers would end on December 31, 2003. Therefore, asserts Mon Power, the commission erred when it extended the MDP in the MBSSO Order. Mon Power‘s argument that the commission was bound by the ETP Order is based on estoppel, the Contracts Clause of the United States Constitution, and issue preclusion. Application of these doctrines to the facts, however, is based upon the premise that the ETP Order created a legally binding early termination of Mon Power‘s MDP for its large commercial and industrial consumers. Since we have determined that the commission had no authority to enter into such an agreement contrary to the statute, the consideration of these theories is moot. Therefore, none of the legal doctrines suggested by Mon Power have application under the facts before us.
Standard of Review
{¶ 29}
{¶ 30} “Due deference should be given to statutory interpretations by an agency that has accumulated substantial expertise and to which the General Assembly has delegated enforcement responsibility.” Weiss v. Pub. Util. Comm. (2000), 90 Ohio St.3d 15, 17-18, 734 N.E.2d 775, citing Collinsworth v. W. Elec. Co. (1992), 63 Ohio St.3d 268, 272, 586 N.E.2d 1071.
{¶ 31} To the extent that Mon Power‘s assertions of error are directed at factual determinations of the commission, Mon Power has failed to show that the record so lacked sufficient probative evidence as to show misapprehension, mistake, or willful disregard of duty on the part of the commission or that the commission‘s determinations were against the manifest weight of the evidence. To the extent that Mon Power‘s assertions of error are directed at the commission‘s exercise of discretion or judgment based on the commission‘s expertise, Mon Power has failed to convince us that this court should substitute its judgment for that of the commission.
Conclusion
{¶ 32} Based on the foregoing, we conclude that the decisions of the commission were reasonable and lawful, and we therefore affirm them.
Decisions affirmed.
RESNICK, F.E. SWEENEY, O‘CONNOR and O‘DONNELL, JJ., concur.
PFEIFER, J., dissents.
MOYER, C.J., dissenting.
{¶ 33} I respectfully dissent from the majority‘s conclusion that the Public Utilities Commission lacked the authority to make an order ending Monongahela Power‘s (“Mon Power‘s“) market-development period (“MDP“) as to its large commercial and industrial customers on December 31, 2003. The commission had the authority, pursuant to
{¶ 34} Compliance with
{¶ 35} The majority finds that Mon Power took the first step3 but ultimately concludes that the other three steps were not taken and in fact could not have been taken in the instant case. According to the majority, “There is nothing in the Stipulation or in the ETP Order indicating that Mon Power made a showing of the existence of the requisite competition * * *.” Moreover, the majority reasons that Mon Power could not have demonstrated the existence of effective competition because the ETP Order was issued before the starting date of
{¶ 36} However, in reaching this conclusion, the majority fails to account for the explanation of “effective competition” that is set forth in
{¶ 37} “Factors the commission shall consider in prescribing the expiration date of the utility‘s market development period and the transition charge for each customer class and rate schedule of the utility include, but are not limited to, the total allowable amount of transition costs of the electric utility as determined under section 4928.39 of the Revised Code; the relevant market price for the delivered supply of electricity to customers in that customer class and, to the extent possible, in each rate schedule as determined by the commission; and such shopping incentives by customer class as are considered necessary to induce, at the minimum, a twenty per cent load switching rate by customer class halfway through the utility‘s market development period but not later than December 31, 2003.”
{¶ 38} The three factors enumerated in
{¶ 39} Thus,
{¶ 40} In the instant case, Mon Power demonstrated that effective competition, as that term is defined in
{¶ 41} Next, the commission met the third requirement of
{¶ 42} After making these acknowledgments, the commission, in a section of the ETP Order entitled “Findings of Fact and Conclusions of Law,” found, “The company‘s transition plan, as modified by the Stipulation, satisfies the requirements of S.B. 3,” which includes
{¶ 43} Finally, the ETP Order states that “[Mon Power‘s] transition plan and Stipulation filed on January 3, 2000, and June 22, 2000, are approved to the extent set forth in this Opinion and Order.” By approving the Stipulation, the commission approved Mon Power‘s application in Section IV of the Stipulation to terminate the MDP for certain of its customer classes on December 31, 2003. Therefore, the issuance of the ETP order satisfied the fourth requirement of
{¶ 44} Because the requirements set forth in
PFEIFER, J., dissenting.
{¶ 45} I would hold that the Public Utilities Commission (“PUCO“) had the authority to and did enter into a stipulation with Monongahela Power Company (“Mon Power“) to end early the market-development period for certain of Mon Power‘s customer classes. The fact that PUCO does not like the deal it entered
Gary A. Jack; Porter, Wright, Morris & Arthur, L.L.P., Kathleen M. Trafford, Daniel R. Conway, and Jay A. Yurkiw, for appellant.
Jim M. Petro, Attorney General, Duane W. Luckey, Senior Deputy Attorney General, Thomas G. Lindgren and Thomas W. McNamee, Assistant Attorneys General, for appellee.
McNees, Wallace & Nurick, L.L.C., Samuel C. Randazzo, Lisa G. McAlister and Daniel J. Neilsen, for intervening appellee, Industrial Energy Users—Ohio.