Case Title: Ohio Consumers' Counsel v. Pub. Util. Comm.

Citation: 2006-Ohio-5853

Docket Number: 20051621 and 20051679

State: ohio

Court: Ohio Supreme Court

Date: 2006-11-29T00:00:00Z

Document:
[Cite as Ohio Consumers' Counsel v. Pub. Util. Comm., 111 Ohio St.3d 384, 2006-Ohio-5853.] 
 
 
 
OHIO CONSUMERS’ COUNSEL, APPELLANT, v. PUBLIC UTILITIES COMMISSION 
OF OHIO, APPELLEE.  (TWO CASES.) 
[Cite as Ohio Consumers’ Counsel v. Pub. Util. Comm., 111 Ohio St.3d 384, 
2006-Ohio-5853.] 
PUCO’s decisions authorizing utility companies to change their accounting 
procedures and to defer certain federally authorized charges until after the 
companies’ market-development periods had ended were not unreasonable or 
unlawful. 
(Nos. 2005-1621 and 2005-1679 — Submitted May 10, 2006 — Decided 
November 29, 2006.) 
APPEALS from the Public Utilities Commission,  
Nos. 04-1931-EL-AAM and 04-1645-EL-AAM. 
__________________ 
 
O’CONNOR, J. 
{¶ 1} In these two consolidated public-utility cases, the Ohio 
Consumers’ Counsel is challenging recent orders by the Public Utilities 
Commission of Ohio (“PUCO”) that allowed FirstEnergy Corporation’s three 
subsidiary electric companies – the Ohio Edison Company, the Cleveland Electric 
Illuminating Company, and the Toledo Edison Company (collectively, 
“FirstEnergy”), as well as the Dayton Power and Light Company – to change their 
accounting procedures in a way that could lead to future rate increases for the 
companies’ customers.  According to the Consumers’ Counsel, the PUCO’s 
action – even though not actually a rate increase – is nonetheless inconsistent with 
the statutory cap imposed by R.C. 4928.34(A)(6) and 4928.35(A) on increases in 
electric utility rates during the market-development period for competitive retail 
electric service in Ohio.  The PUCO and the utility companies counter that utility 
SUPREME COURT OF OHIO 
2 
rates have not been increased by the PUCO’s action, and therefore the statutory 
cap on rates was not violated. 
{¶ 2} Two other preliminary issues raised by the parties must be 
addressed as well:  (1) whether the PUCO properly denied the Consumers’ 
Counsel’s request to intervene in the proceedings before the commission and (2) 
whether the appeals by the Consumers’ Counsel are premature because utility 
rates have not been changed as a result of the PUCO’s orders. 
{¶ 3} For the reasons explained below, we affirm the PUCO’s orders. 
Facts 
{¶ 4} In October 2004, Dayton Power and Light sought permission from 
the PUCO to defer certain administrative charges incurred by the company as a 
result of its membership in PJM Interconnection, L.L.C.  In December 2004, 
FirstEnergy likewise sought permission from the PUCO to defer certain 
electricity-transmission and service-related charges that it had incurred as a result 
of its membership in Midwest Independent Transmission System Operator, Inc. 
(“Midwest ISO”). 
{¶ 5} Both PJM Interconnection and Midwest ISO are corporations 
designated by the Federal Energy Regulatory Commission (“FERC”) as “regional 
transmission organizations.”  See FPL Energy Marcus Hook, L.P. v. Fed. Energy 
Regulatory Comm. (2005), 430 F.3d 441, 442, 368 U.S.App.D.C. 352; and Pub. 
Serv. Comm. of Kentucky v. Fed. Energy Regulatory Comm. (2005), 397 F.3d 
1004, 1006, 365 U.S.App.D.C. 53.  Those organizations “combine[ ] multiple 
power grids into a single transmission system,” id., and each of them “controls 
electricity transmission assets,” FPL Energy Marcus Hook, L.P., 430 F.3d at 443, 
368 U.S.App.D.C. 352.  Once FERC has designated a corporation as a regional 
transmission organization, “electricity-generating plants can interconnect with 
transmission lines owned by [the organization] and then sell energy to one 
another.”  Id. 
January Term, 2006 
3 
{¶ 6} FERC has encouraged the formation of regional transmission 
organizations “to address regional reliability concerns and to foster regional 
competition” in the wholesale electricity market.  Midwest ISO Transm. Owners 
v. Fed. Energy Regulatory Comm. (2004), 373 F.3d 1361, 1364, 362 
U.S.App.D.C. 314.  According to FERC, those entities “provide a large and stable 
transmission system that reduces regional pricing disparities and creates an 
efficient market for new power generators.”  Pub. Serv. Comm. of Kentucky, 397 
F.3d at 1006, 365 U.S.App.D.C. 53. 
{¶ 7} FirstEnergy joined Midwest ISO in October 2003, and Dayton 
Power and Light joined PJM Interconnection in October 2004. 
{¶ 8} By seeking in the proceedings below to defer charges associated 
with their membership in the two regional transmission organizations, FirstEnergy 
and Dayton Power and Light asked, in essence, that the PUCO allow them to 
change their accounting procedures so that the costs charged by Midwest ISO and 
PJM Interconnection could be recorded on the companies’ books at a date after 
January 1, 2006, i.e., after the rate caps were no longer in effect.  The electric 
companies also indicated in the proceedings below that they hoped to recover 
those costs later by securing the PUCO’s approval to raise the rates that they 
charge their customers. 
{¶ 9} The Consumers’ Counsel moved to intervene in the proceedings 
initiated by the two companies and urged the PUCO to dismiss both companies’ 
applications for approval of accounting-procedure changes.  In both cases, the 
PUCO denied the Consumers’ Counsel’s efforts to intervene, then granted the 
companies’ requests to change their accounting procedures and defer charges 
imposed on them by their regional transmission organizations between the date of 
the companies’ applications for the deferrals and January 1, 2006.  The PUCO 
denied the Consumers’ Counsel’s applications for rehearing in both cases. 
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{¶ 10} The causes are before us upon the Consumers’ Counsel appeal 
from the PUCO’s orders. 
Standard of Review 
{¶ 11} R.C. 4903.13 provides that a PUCO order shall be reversed, 
vacated, or modified by this court only when, upon consideration of the record, 
the court finds the order to be unlawful or unreasonable.  “ ‘[T]his court will not 
reverse or modify a PUCO decision as to questions of fact where the record 
contains sufficient probative evidence to show the PUCO’s determination is not 
manifestly against the weight of the evidence and is not so clearly unsupported by 
the record as to show misapprehension, mistake or willful disregard of duty.’ ”  
Monongahela Power Co. v. Pub. Util. Comm., 104 Ohio St.3d 571, 2004-Ohio-
6896, 820 N.E.2d 921, ¶ 29, quoting AT & T Communications of Ohio, Inc. v. 
Pub. Util. Comm. (2000), 88 Ohio St.3d 549, 555, 728 N.E.2d 371.  The appellant 
bears the burden of demonstrating that the PUCO’s decision is against the 
manifest weight of the evidence or is clearly unsupported by the record.  Id. 
{¶ 12} Although this court has “complete and independent power of 
review as to all questions of law” in appeals from the PUCO, Ohio Edison Co. v. 
Pub. Util. Comm. (1997), 78 Ohio St.3d 466, 469, 678 N.E.2d 922, we have 
explained that 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.”  Consumers’ Counsel v. Pub. Util. Comm. (1979), 58 Ohio 
St.2d 108, 110, 12 O.O.3d 115, 388 N.E.2d 1370. 
Analysis 
{¶ 13} We first address the two preliminary issues: the PUCO’s denial of 
the Consumers’ Counsel’s motions to intervene and the appealability of the 
PUCO’s orders allowing changes in accounting procedures. 
The Motions to Intervene 
January Term, 2006 
5 
{¶ 14} The Consumers’ Counsel argues that the PUCO should have 
granted her motions to intervene in both the FirstEnergy and the Dayton Power 
and Light cases.  The commission and the two electric companies contend instead 
that the PUCO properly denied both motions. 
{¶ 15} Intervention in PUCO matters is governed by R.C. 4903.221, 
which provides that any person “who may be adversely affected” by a PUCO 
proceeding is entitled to seek intervention in that proceeding.  In ruling on a 
motion to intervene, the PUCO is to consider (1) the nature and extent of the 
prospective intervenor’s interest, (2) the legal position advanced by the 
prospective intervenor and its probable relation to the merits of the case, (3) 
whether the intervention will unduly prolong or delay the proceeding, and (4) 
whether the prospective intervenor will significantly contribute to the full 
development and equitable resolution of the factual issues.  R.C. 4903.221(B). 
{¶ 16} Ohio Adm.Code 4901-1-11 provides additional guidance on the 
question, explaining that intervention “shall” be allowed by the PUCO if the 
prospective intervenor “has a real and substantial interest in the proceeding, and * 
* * is so situated that the disposition of the proceeding may, as a practical matter, 
impair or impede his or her ability to protect that interest, unless the person’s 
interest is adequately represented by existing parties.”  The regulation’s text is 
very similar to Civ.R. 24 – the rule governing intervention in civil cases in Ohio – 
which “is generally liberally construed in favor of intervention.”  State ex rel. 
Polo v. Cuyahoga Cty. Bd. of Elections (1995), 74 Ohio St.3d 143, 144, 656 
N.E.2d 1277. 
{¶ 17} In both proceedings below, the PUCO denied the motions to 
intervene, finding that intervention was not necessary.  This court applies an 
abuse-of-discretion standard when reviewing PUCO permissive-intervention 
decisions.  See Senior Citizens Coalition v. Pub. Util. Comm. (1982), 69 Ohio 
St.2d 625, 628, 23 O.O.3d 515, 433 N.E.2d 583, fn. 8. 
SUPREME COURT OF OHIO 
6 
{¶ 18} We hold that the PUCO abused its discretion when it denied the 
motions to intervene.  The Consumers’ Counsel’s interests were not represented 
by any other party to the proceedings, and there is no suggestion in the record that 
intervention would have unduly delayed the proceedings or caused prejudice to 
any party.  In addition, the memoranda filed by the Consumers’ Counsel in 
support of her motions to intervene in the two cases presented the view that the 
accounting changes sought by the two electric companies would adversely affect 
the companies’ residential customers and would violate Ohio law.  In light of 
those facts, the Consumers’ Counsel should have been allowed to intervene in the 
two proceedings. 
{¶ 19} It is true that in Ohio Domestic Violence Network v .Pub. Util. 
Comm. (1994), 70 Ohio St.3d 311, 315, 638 N.E.2d 1012, we held that R.C. 
4903.221 – the statute governing intervention in PUCO proceedings – “clearly 
contemplates intervention in quasi-judicial proceedings, characterized by notice, 
hearing, and the making of an evidentiary record,” and when – as in the 
proceedings below – no hearing is held before the PUCO, “there is no right to 
intervene.”  But in that case, we cited a concern about delay, and we identified an 
alternative avenue through which the would-be intervenors could have sought 
recourse from the PUCO.  In contrast, the parties in these cases have not 
suggested that intervention by the Consumers’ Counsel would have delayed the 
proceedings, and they have not identified any other way in which she could have 
raised her concerns about the accounting changes sought by FirstEnergy and 
Dayton Power and Light. 
{¶ 20} Even if no hearing was scheduled or contemplated when the 
Consumers’ Counsel sought to intervene, her motions and accompanying 
memoranda properly addressed the relevant criteria of R.C. 4903.221.  In our 
view, whether or not a hearing is held, intervention ought to be liberally allowed 
so that the positions of all persons with a real and substantial interest in the 
January Term, 2006 
7 
proceedings can be considered by the PUCO.  The Consumers’ Counsel explained 
her interest in the cases in her motions to intervene and also explained that her 
views would not be adequately represented by the existing parties.  In the absence 
of some evidence in the record calling those claims into doubt or showing that 
intervention would unduly prolong or delay the proceedings, intervention should 
have been granted. 
{¶ 21} Even so, the two causes need not be remanded to the PUCO so that 
the Consumers’ Counsel can intervene, because, according to the PUCO’s orders 
in both cases, the PUCO took the Consumers’ Counsel’s filings into consideration 
when it made its decision.  Because the PUCO concluded in both cases that no 
hearing was needed on the electric companies’ requests for accounting changes, 
and because the PUCO considered all the documents presented to it by the parties 
and all prospective intervenors, the Consumers’ Counsel’s status as a nonparty 
had no discernable adverse effect on her efforts to advocate for a particular 
outcome in the two proceedings. 
{¶ 22} The denial of the motions to intervene, in other words, did not 
prejudice the Consumers’ Counsel’s efforts to be heard before the PUCO.  This 
court has explained in past cases that we “will not reverse an order of the Public 
Utilities Commission unless the party seeking reversal demonstrates the 
prejudicial effect of the order.”  Tongren v. Pub. Util. Comm. (1999), 85 Ohio 
St.3d 87, 92, 706 N.E.2d 1255.  See, also, Myers v. Pub. Util. Comm. (1992), 64 
Ohio St.3d 299, 302, 595 N.E.2d 873 (“this court will not reverse an order of the 
commission absent a showing of prejudice”).  Even though the PUCO abused its 
discretion by refusing to let the Consumers’ Counsel intervene, that action caused 
no prejudice because the PUCO treated the documents filed by the Consumers’ 
Counsel no differently than the documents filed by the parties.  In these 
circumstances, reversing the decision and remanding the cause on the intervention 
issue is not justified. 
SUPREME COURT OF OHIO 
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{¶ 23} The Consumers’ Counsel’s status as a nonparty could have 
affected her ability to pursue an appeal to this court in the two cases, however, 
because only a party may appeal from a PUCO decision.  R.C. 4903.13.  This 
court’s rules of practice likewise permit “a party” to seek review in PUCO 
matters.  S.Ct.Prac.R. II(3)(B)(2).  Because we find, though, that the Consumers’ 
Counsel should have been granted party status before the PUCO, the appeals in 
these two cases are properly before us, and all of the arguments raised here by the 
Consumers’ Counsel – not simply her challenge to the denial of her motions to 
intervene – may rightly be considered by this court now. 
Appealability of the Orders 
{¶ 24} A second procedural issue in these appeals is raised by the PUCO, 
which argues that its orders in the two proceedings were not final orders and 
therefore were not appealable.  The orders at issue in these two cases simply 
allowed FirstEnergy and Dayton Power and Light to change their accounting 
procedures, the PUCO argues, and therefore the Consumers’ Counsel should not 
be allowed to appeal now, but should instead be forced to wait until the 
commission has approved a change in the rates charged to those companies’ 
customers. 
{¶ 25} Basically, the PUCO argues that the orders are not final, because 
later commission orders will result in more direct effects on consumers.  We 
disagree.  The fact that subsequent orders may result in more direct effects does 
not mean that the orders allowing accounting-procedure changes are not final.  
Thus, the Consumers’ Counsel may argue in these appeals that consumers have 
already been harmed by PUCO actions that she claims were unreasonable or 
unlawful. 
The Merits of the Consumers’ Counsel’s Challenge to the Accounting Changes 
{¶ 26} The Consumers’ Counsel contends that the accounting changes 
approved by the PUCO – allowing the two electric companies to wait until after 
January Term, 2006 
9 
January 1, 2006, to list on their books certain costs billed to them by their 
respective regional transmission organizations – are inconsistent with state 
statutes and prior PUCO decisions. 
{¶ 27} The Consumers’ Counsel does not dispute the PUCO’s authority to 
“establish a system of accounts to be kept by public utilities” and to “prescribe the 
forms of accounts, records, and memorandums to be kept” by those public 
utilities.  R.C. 4905.13.  The question in these appeals is whether the particular 
accounting changes authorized by the PUCO in the proceedings below are 
consistent with R.C. 4928.34(A)(6) and 4928.35(A), which impose a cap on the 
rates charged by electric utilities during the “market development period.” 
{¶ 28} The key statutory provisions state as follows: 
{¶ 29} “[T]he total of all unbundled components in the rate unbundling 
plan are capped and shall equal during the market development period, except as 
specifically provided in this chapter, the total of all rates and charges in effect 
under the applicable bundled schedule of the electric utility * * * in effect on 
[October 4, 1999].”  R.C. 4928.34(A)(6). 
{¶ 30} “The schedules [listing an electric utility’s unbundled rates] shall 
be in effect for the duration of the utility’s market development period, shall be 
subject to the cap specified in [R.C. 4928.34(A)(6)], and shall not be adjusted 
during that period by the public utilities commission except * * * as otherwise 
authorized by federal law * * *.”  R.C. 4928.35(A). 
{¶ 31} Definitions of some of the terms in those statutes make those 
provisions more clear.  An electric utility has “unbundled” its rates if it has 
“separate[d] the cost of transmission from the cost of electrical energy when 
billing its retail customers.”  New York v. Fed. Energy Regulatory Comm. (2002), 
535 U.S. 1, 4, 122 S.Ct. 1012, 152 L.Ed.2d 47.  Once the General Assembly’s 
plan for creating a competitive market for retail electric service in Ohio took 
effect in 1999, electric utility companies were required to file “rate unbundling 
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plans” specifying the separate electric generation, transmission, and distribution 
services each of them was prepared to offer to the public.  See R.C. 4928.31. 
{¶ 32} The “market development period” mentioned in the statutes above 
is a period defined in R.C. 4928.01(A)(17), 4928.01(A)(29), and 4928.40 as 
running from January 1, 2001, until no later than December 31, 2005.  During that 
time, each electric company’s retail rates were “capped and frozen,” but once a 
company’s market-development period ends, it “is entitled to charge market-
based retail-generation rates that permit it to recover its cost of purchasing power 
at wholesale for resale to its customers.”  Monongahela Power Co. v. Pub. Util. 
Comm., 104 Ohio St.3d 571, 2004-Ohio-6896, 820 N.E.2d 921, ¶ 2. 
{¶ 33} By allowing FirstEnergy and Dayton Power and Light to record 
certain costs on their books after the market-development period had ended rather 
than during the market-development period, when those costs were actually 
incurred, the Consumers’ Counsel argues, the PUCO is allowing the companies to 
raise the rates charged to their customers after the market-development period 
based on charges incurred during the market-development period.  That action is 
unlawful, according to the Consumers’ Counsel, who argues that the “General 
Assembly did not intend its rate cap to be circumvented by the deferral of costs 
incurred during the rate cap period for recovery after the rate cap period.” 
{¶ 34} But nothing in R.C. 4928.34(A)(6) or 4928.35(A) bars the PUCO 
from authorizing electric utilities to change their accounting procedures during the 
market-development period.  The statutes cap the rates that may be charged to 
customers during that period, but they do not prohibit the kind of accounting 
changes that the PUCO approved. 
{¶ 35} To be sure, as the Consumers’ Counsel contends, FirstEnergy and 
Dayton Power and Light, having secured the accounting changes, will likely ask 
the PUCO for permission to raise their customers’ rates after the market-
development period to cover the costs that the PUCO has allowed the companies 
January Term, 2006 
11 
to defer during that period.  We agree with the Consumers’ Counsel that open-
ended accounting changes allowing electric companies to evade the rate cap by 
shifting all expenses incurred during the market-development period to a date 
after that period would circumvent the intent of the General Assembly in capping 
rates during the market-development period. 
{¶ 36} The charges that the PUCO has allowed these two companies to 
defer, however, are special ones, unlike most other costs incurred by electric 
utilities during the market-development period.  The deferred charges were 
incurred by the companies as a result of their membership in regional 
transmission organizations approved by the FERC.  As even the Consumers’ 
Counsel concedes, Ohio law requires electric companies to join regional 
transmission organizations, see R.C. 4928.12 and Ohio Adm.Code 4901:1-20-17, 
and a regulation promulgated by FERC and codified at Section 35.34, Title 18, 
C.F.R. requires most public utilities that “own[ ], operate[ ] or control[ ] facilities 
used for the transmission of electric energy in interstate commerce” to participate 
in a regional transmission organization or provide FERC with a detailed 
explanation of their failure to do so, see Section 35.34(c) and (g), Title 18, C.F.R.  
As a result, FERC has noted its “expectation that all individual public utilities 
(and others, as well) will join [regional transmission organizations].”  65 F.R. 
65757, 65765, 2000 WL 1636587, fn. 68. 
{¶ 37} Membership in regional transmission organizations is not free, for 
those entities impose charges for the use of their electricity-transmission services 
in accordance with FERC-approved tariff schedules.  See Section 35.34(k)(1), 
Title 18, C.F.R.; Federal Energy Guidelines (Sept. 16, 1998), 84 F.E.R.C. ¶ 
61,231, 62,166.  In addition, FERC has imposed annual charges since 2001 on 
entities that transmit electric service, see Section 382.201, Title 18, C.F.R., and 
has explained that regional transmission organizations must pay those charges if 
they have “taken over from individual public utilities the function of providing 
SUPREME COURT OF OHIO 
12 
transmission service.”  65 F.R. at 65765.  Significantly, FERC has also explained 
that “the annual charge assessments are costs that can be recovered in 
transmission rates as a legitimate cost of providing transmission service.”  65 F.R. 
at 65766. 
{¶ 38} The costs incurred, then, by FirstEnergy and Dayton Power and 
Light as a result of their membership in regional transmission organizations are 
costs authorized by FERC, the independent federal agency that Congress vested 
with “primary responsibility of carrying out the provisions of the Federal Power 
Act, 16 U.S.C. §§ 791a-825r.”  Wisconsin v. Fed. Energy Regulatory Comm. 
(1997), 104 F.3d 462, 471, 322 U.S.App.D.C. 419.  Those costs, in short, are 
authorized by federal law, and R.C. 4928.35(A) expressly allows the PUCO, 
when “authorized by federal law,” to adjust electric utilities’ rate schedules during 
the market-development period.  Although the PUCO did not in fact adjust any 
rates in the proceedings below, the statutory provision allowing federally 
authorized rate adjustments during the market-development period would have 
entitled the PUCO to do so.  In our view, that statutory provision therefore 
certainly gave the PUCO the authority to take the smaller step of authorizing the 
kind of accounting changes sought by FirstEnergy and Dayton Power and Light in 
these cases, even if those deferrals are a prelude to possible rate increases for the 
companies’ customers after the market-development period has ended. 
The Consumers’ Counsel’s Contrary Arguments 
{¶ 39} The Consumers’ Counsel does not challenge the PUCO’s finding 
that the deferred charges were authorized by federal law, but instead argues that 
any rate increases approved by the PUCO during the market-development period 
– or, as in this case, any accounting changes during the market-development 
period that may lead to later rate increases – must be offset by corresponding rate 
decreases on other components of the affected utility’s rate schedule.  That 
argument, however, does not square with R.C. 4928.35(A). 
January Term, 2006 
13 
{¶ 40} While it is true that R.C. 4928.35(A) states that an electric utility’s 
approved rate schedule “shall be in effect for the duration of the utility’s market 
development period [and] shall be subject to the [R.C. 4928.34(A)(6)] cap” on 
rates, it is also true that, as discussed above, the statute allows adjustments in 
those rate schedules and exceptions to the rate cap when “authorized by federal 
law.”  When, as in these cases, an electric utility has incurred charges authorized 
by FERC during the utility’s market-development period, the statute allows the 
PUCO to adjust the company’s rate schedule upward to reflect those federally 
authorized charges without regard to the rate cap. 
{¶ 41} There would be no reason for the General Assembly to include the 
exception in R.C. 4928.35(A) for federally authorized adjustments – and no 
reason for an electric utility to apply for such an adjustment – if every upward rate 
adjustment in one unbundled component of the utility’s rates had to be matched 
by a corresponding downward rate adjustment in another component.  In other 
words, the General Assembly did not carve out an exception allowing for rate 
increases during the market-development period for federally authorized charges 
only to gut that exception by insisting that the affected utility lower its rates by a 
corresponding amount on other components of its services during the market-
development period.  Certainly the PUCO did not read R.C. 4928.35(A) as calling 
for utilities to take that step, and “[d]ue 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. 
{¶ 42} The Consumers’ Counsel also contends that the PUCO acted 
unlawfully by interpreting the relevant statutes differently in these cases than it 
did in earlier proceedings.  That argument need not detain us for long, however, 
because this court has “complete and independent power of review as to all 
SUPREME COURT OF OHIO 
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questions of law” in appeals from the PUCO.  Luntz Corp. v. Pub. Util. Comm. 
(1997), 79 Ohio St.3d 509, 512, 684 N.E.2d 43.  In other words, we are not bound 
by the PUCO’s precedent on questions of law. 
{¶ 43} In any event, the PUCO’s entry denying rehearing in the 
FirstEnergy case below explained that the earlier proceedings in which the 
commission declined to authorize other electric utilities to defer certain costs 
during the market-development period were resolved “based upon the facts 
specific to each case rather than as a matter of law.”  In one of those earlier 
decisions, in fact, the PUCO stated, “Nothing in this decision is intended to be 
precedent-setting * * *.”  In the Matter of the Application of Columbus Southern 
Power Company and Ohio Power Company for Approval of a Post-Market 
Development Rate Stabilization Plan (Jan. 26, 2005), No. 04-169-EL-UNC. 
{¶ 44} A PUCO order is unlawful if it is inconsistent with relevant 
statutes or with the state or federal constitutions.  That an order is inconsistent 
with earlier PUCO rulings on legal questions does not make that order unlawful.  
If this court determines that the PUCO’s orders in the proceedings below were 
permitted by Ohio law, then those orders should be affirmed, notwithstanding 
earlier PUCO orders.  For the reasons explained above, we hold that the PUCO 
interpreted and applied the relevant statutes in a lawful and proper way in these 
cases, and its orders should therefore be affirmed. 
{¶ 45} Finally, the Consumers’ Counsel argues that the PUCO’s orders 
allowing FirstEnergy and Dayton Power and Light to defer certain charges 
resulting from their membership in regional transmission organizations are 
inconsistent with earlier PUCO orders involving those same companies.  But as 
the PUCO rightly explained when it denied rehearing in the proceedings below, 
the earlier orders on which the Consumers’ Counsel relies did not prohibit the 
deferral of costs like those at issue in these cases. 
January Term, 2006 
15 
{¶ 46} Those orders (In the Matter of the Application of FirstEnergy 
Corp. on Behalf of Ohio Edison Company, the Cleveland Electric Illuminating 
Company, and the Toledo Edison Company for Approval of Their Transition 
Plans and for Authorization to Collect Transition Revenues (July 19, 2000), No. 
99-1212-EL-ETP, and In the Matter of the Continuation of the Rate Freeze and 
Extension of the Market Development Period for the Dayton Power and Light 
Company (Sept. 2, 2003), No. 02-2779-EL-ATA) simply do not address cost 
deferrals during the companies’ market-development periods, and they do not 
contain any limitation on the PUCO’s authority under R.C. 4928.35(A) to adjust 
rates during the market-development period when authorized by federal law.  The 
Consumers’ Counsel has in fact cited no language from the earlier orders that 
could reasonably be interpreted as barring the PUCO from authorizing the 
accounting changes sought by FirstEnergy and Dayton Power and Light in the 
proceedings below. 
Conclusion 
{¶ 47} For the reasons explained above, we hold (1) that the PUCO 
abused its discretion by refusing to let the Consumers’ Counsel intervene in the 
proceedings before the commission (but since the Consumers’ Counsel was not 
prejudiced by that decision, the orders need not be reversed on that issue), (2) that 
the PUCO orders were final and appealable, and (3) that the PUCO orders – 
which authorized FirstEnergy and Dayton Power and Light to change their 
accounting procedures and to defer certain federally authorized charges until after 
the companies’ market-development periods had ended – were not unreasonable 
or unlawful.  The PUCO’s orders are therefore affirmed in both cases. 
Decisions affirmed. 
 
MOYER, C.J., RESNICK, LUNDBERG STRATTON, O’DONNELL and 
LANZINGER, JJ., concur. 
 
PFEIFER, J., concurs in part and dissents in part. 
SUPREME COURT OF OHIO 
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__________________ 
 
PFEIFER, J., concurring in part and dissenting in part. 
{¶ 48} I concur in the majority’s holdings on the procedural aspects of 
this case involving the motions to intervene and the appealability of the 
commission’s orders.  I dissent from the substantive holding regarding the legality 
of the commission’s allowing electric utilities to defer accounting of certain 
charges until after the market-development period. 
{¶ 49} The commission is complicit here in an accounting legerdemain 
that runs contrary to the purpose of the rate cap imposed by R.C. 4928.34(A)(6) 
during the market-development period.  The cap is meaningless if utilities can 
simply charge consumers for costs incurred during the market-development 
period after the expiration of the period.  R.C. 4928.35(A) provides the means for 
electric utilities to seek a rate-schedule adjustment from the commission as 
“authorized by federal law,” i.e., for costs imposed by the Federal Energy 
Regulatory Commission, during the period that the cap is in place.  The 
commission had the statutory power to make that adjustment during the market-
development period, but the utilities did not request it.  What the utilities asked 
for here from the commission, it could not give.  Moreover, the commission 
should not be in the practice of abetting such questionable accounting practices. 
{¶ 50} Since the commission lacked the authority to allow the deferral of 
the costs at issue, I would reverse. 
__________________ 
 
Janine L. Migden-Ostrander, Ohio Consumers’ Counsel, and Kimberly W. 
Bojko, Jeffrey L. Small, and Larry S. Sauer, Assistant Consumers’ Counsel, for 
appellant. 
 
Jim Petro, Attorney General, Duane Luckey, Senior Deputy Attorney 
General, and Steven T. Nourse and Thomas G. Lindgren, Assistant Attorneys 
General, for appellee. 
January Term, 2006 
17 
 
Jones Day and Helen L. Liebman; and Kathy J. Kolich, for intervening 
appellee FirstEnergy Corporation in case No. 2005-1621. 
 
Jones Day and Helen L. Liebman, for intervening appellee Dayton Power 
and Light Company in case No. 2005-1679. 
______________________