Case Title: Surburban Natural Gas Co. v. Columbia Gas of Ohio, Inc.

Citation: 2020-Ohio-5221

Docket Number: 2019-1765

State: ohio

Court: Ohio Supreme Court

Date: 2020-11-12T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as In 
re Complaint of Suburban Natural Gas Co. v. Columbia Gas of Ohio, Inc., Slip Opinion No. 
2020-Ohio-5221.] 
 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in an 
advance sheet of the Ohio Official Reports.  Readers are requested to 
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 
South Front Street, Columbus, Ohio 43215, of any typographical or other 
formal errors in the opinion, in order that corrections may be made before 
the opinion is published. 
 
 
SLIP OPINION NO. 2020-OHIO-5221 
IN RE COMPLAINT OF SUBURBAN NATURAL GAS COMPANY, APPELLANT, v. 
COLUMBIA GAS OF OHIO, INC., INTERVENING APPELLEE; PUBLIC UTILITIES 
COMMISSION, APPELLEE. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as In re Complaint of Suburban Natural Gas Co. v. Columbia Gas 
of Ohio, Inc., Slip Opinion No. 2020-Ohio-5221.] 
Public utilities—Natural-gas distribution service—Demand-side-management 
program—Allegation that natural-gas provider improperly used incentive 
program to pay financial incentives to home builder to unlawfully gain 
advantage over competitor that already served home builder’s area—R.C. 
4903.09—Public Utilities Commission adequately explained reasons for its 
decision, including why it did not follow the precedent relied on by 
complaining company—Orders affirmed. 
(No. 2019-1765—Submitted August 18, 2020—Decided November 12, 2020.) 
APPEAL from the Public Utilities Commission, No. 17-2168-GA-CSS. 
__________________ 
SUPREME COURT OF OHIO 
 
2
DONNELLY, J. 
{¶ 1} Appellant, Suburban Natural Gas Company (“Suburban”), and 
intervening appellee, Columbia Gas Company of Ohio, Inc. (“Columbia”), each 
provide natural-gas distribution service to customers in southern Delaware County.  
Suburban filed a complaint with the Public Utilities Commission alleging that 
Columbia had improperly used one of its demand-side management (“DSM”) 
programs1 to unlawfully gain an anticompetitive advantage over Suburban.  Under 
the DSM program in question—the “EfficiencyCrafted Homes Program”—
Columbia is authorized to offer cash incentives directly to residential builders to 
construct homes that exceed certain energy-efficiency standards.  According to 
Suburban, Columbia used this program to pay financial incentives to a home builder 
to displace Suburban as the natural-gas provider of a planned residential 
subdivision.  The commission decided in favor of Columbia, finding that Suburban 
failed to prove the allegations in the complaint. 
{¶ 2} Suburban appeals, arguing that the commission’s decision is unlawful 
and unreasonable.  Because Suburban has failed to demonstrate reversible error, we 
affirm the commission’s decision. 
I. FACTS AND PROCEDURAL BACKGROUND 
{¶ 3} In October 2017, Suburban filed a complaint under R.C. 4905.26 
against Columbia and a request for emergency relief.  The complaint alleged that 
Columbia had improperly paid financial incentives to a home builder, Pulte Homes, 
to gain an unfair competitive advantage in areas of Delaware County that Suburban 
already served or was readily capable of serving. 
                                                 
1.  According to the Energy Information Administration, an agency of the United States Federal 
Statistical System, DSM programs “consist of the planning, implementing, and monitoring 
activities” of utilities “designed to encourage consumers to modify their level and pattern” of usage.  
https://www.eia.gov/electricity/data/eia861/dsm/ 
(accessed 
Oct. 
21, 
2020) 
[https://perma.cc/NW5H-9VN4]. 
January Term, 2020 
 
3
{¶ 4} The complaint was filed shortly after Pulte selected Columbia over 
Suburban to provide natural-gas distribution service to new phases of a residential 
subdivision in southern Delaware County called Glenross.  According to the 
complaint, Suburban currently distributes natural gas to over 550 customers in 
Glenross, and Suburban had managed and planned its system to accommodate the 
next phase of the development, approximately 490 homes to be built by Pulte and 
referred to as Glenross South, located on the south side of Cheshire Road.  
Suburban claimed that under the EfficiencyCrafted Homes Program, Columbia was 
authorized to pay incentives only for homes built within Columbia’s service 
territory.  Suburban alleged that despite Glenross being located outside Columbia’s 
service territory, Columbia offered cash incentives to Pulte in an attempt to displace 
Suburban as the natural-gas provider for all future phases of Glenross South. 
{¶ 5} Suburban claimed that it was harmed because, but for the builder 
incentives, Pulte would have chosen Suburban to serve Glenross South instead of 
Columbia.  Suburban’s complaint also sought emergency relief from the 
commission to stop Columbia from extending its gas-distribution main to serve 
Glenross South in a manner duplicating Suburban’s existing distribution main that 
served the area.  About two months after the complaint was filed, however, 
Columbia completed the installation of its gas main on Cheshire Road to serve 
Glenross South. 
{¶ 6} Against this backdrop, Suburban alleged that Columbia’s use of 
financial incentives to Pulte violated (1) a 1995 stipulated agreement (“the 1995 
Stipulation”) between the parties that had been approved by the commission, (2) 
the commission’s order approving Columbia’s DSM program (which included the 
EfficiencyCrafted Homes Program), (3) Columbia’s DSM rider, (4) Columbia’s 
gas-main tariff, and (5) numerous statutory provisions.  Suburban asserted that the 
1995 Stipulation was intended to resolve future issues regarding Columbia’s use of 
SUPREME COURT OF OHIO 
 
4
financial incentives to builders and developers in competitive areas and to end the 
unlawful, unfair, and anticompetitive activities that Columbia is now engaged in. 
{¶ 7} The commission held an evidentiary hearing in April 2018.  The 
commission issued an opinion and order finding that Suburban had failed to prove 
the allegations in the complaint.  The commission denied Suburban’s application 
for rehearing. 
{¶ 8} Suburban filed this appeal, raising four propositions of law.  The 
commission filed a brief opposing reversal.  Columbia intervened to support the 
commission’s orders and filed a brief. 
II. STANDARD OF REVIEW 
{¶ 9} “R.C. 4903.13 provides that a [commission] 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.”  Constellation NewEnergy, 
Inc. v. Pub. Util. Comm., 104 Ohio St.3d 530, 2004-Ohio-6767, 820 N.E.2d 885,  
¶ 50, modified on other grounds, Ohio Consumers’ Counsel v. Pub. Util. Comm., 
111 Ohio St.3d 300, 2006-Ohio-5789, 856 N.E.2d 213, ¶ 87.  We will not reverse 
or modify a commission decision as to questions of fact when the record contains 
sufficient probative evidence to show that the decision was not manifestly against 
the weight of the evidence and was 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.  The “appellant bears the burden of demonstrating that the commission’s 
decision is against the manifest weight of the evidence or is clearly unsupported by 
the record.”  Id. 
III. ANALYSIS 
{¶ 10} Suburban challenges the commission’s decision on four grounds: the 
commission erred in (1) failing to enforce the 1995 Stipulation, (2) finding that it 
lacked authority to preclude duplication of utility facilities, (3) failing to find that 
January Term, 2020 
 
5
Columbia implemented its builder program in an unfair and anticompetitive 
manner, and (4) finding that Suburban did not meet its burden of proof.  Because 
none of Suburban’s arguments justifies reversal, we affirm the commission’s 
orders. 
A. Proposition of law No. I: Whether the commission erred in failing to 
enforce the 1995 Stipulation 
{¶ 11} Suburban argues that the commission erred in failing to enforce the 
1995 Stipulation.  According to Suburban, the 1995 Stipulation settled claims 
arising from the same type of conduct that Columbia engaged in at Glenross and 
was intended to forever prohibit Columbia from (1) using builder incentives to 
compete against Suburban in an area already served by Suburban and 
(2) duplicating Suburban’s facilities. 
{¶ 12} The 1995 Stipulation arose out of a self-complaint filed with the 
commission by Columbia seeking to confirm that Columbia’s tariffs allowed it to 
offer incentives when it successfully competed to serve a residential subdivision 
called Oak Creek in Delaware County.  In re Self-Complaint of Columbia Gas of 
Ohio, Inc., Concerning Certain of Its Existing Tariff Provisions, Pub. Util. Comm. 
No. 93-1569-GA-SLF, ¶ l (Jan. 18, 1996).  Suburban questioned Columbia’s 
authority to offer the incentives and intervened in that case.  Columbia and 
Suburban ultimately resolved the case through the 1995 Stipulation, in which they 
agreed to (1) exchange certain facilities and customers, (2) delete tariff language 
that restricted them from providing or paying for customer-service lines, house 
piping, and appliances when competing with another regulated natural-gas 
company, and (3) execute the releases and covenants not to sue attached to the 
stipulation. 
{¶ 13} In this case, the commission found “no merit in Suburban’s claim 
that Columbia’s existing homebuilder incentives violate the terms of the 1995 
Stipulation.”  Pub. Util. Comm. No. 17-2168-GA-CSS, ¶ 53 (Apr. 10, 2019).  The 
SUPREME COURT OF OHIO 
 
6
commission held that the 1995 Stipulation and the commission’s order approving 
it contained no “language prohibiting Columbia from offering Commission-
approved DSM incentives to builders of energy-efficient homes or from competing 
for customers in southern Delaware County.”  Id. at ¶ 54. 
{¶ 14} Suburban’s first proposition of law raises three separate challenges 
to the commission’s determination.  None has merit. 
1. Whether the commission failed to apply the express terms of the 1995 
Stipulation 
{¶ 15} Suburban argues that the commission failed to “apply the express 
language of the 1995 Stipulation and Releases and Covenant Not to Sue.”  
Suburban specifically alleges that the commission ignored Columbia’s release and 
covenant not to sue, which Suburban claims, quoting that document, “prohibits 
Columbia from instituting or reinstating certain builder programs ‘or any program 
substantially similar to such programs’ ” in areas already served by Suburban.2  
According to Suburban, the implementation of the builder program at Glenross 
South violates the 1995 Stipulation.  We lack jurisdiction over this argument 
because Suburban failed to raise it on rehearing before the commission as required 
by R.C. 4903.10. 
{¶ 16} The commission’s order quoted language from Suburban’s release 
and covenant not to sue—not from Columbia’s—in finding that “nothing in the 
1995 Stipulation or the Release prohibits Columbia, in perpetuity, from offering 
any kind of incentives to homebuilders.”  Pub. Util. Comm. No. 17-2168-GA-CSS 
at ¶ 53 (Apr. 10, 2019).  Yet Suburban did not argue on rehearing that the 
commission should have applied the language of Columbia’s release instead of 
                                                 
2.  Suburban in its reply brief also claims that the commission ignored a clause in the 1995 
Stipulation that prevents Columbia from duplicating Suburban’s facilities, except in certain 
circumstances.  We do not consider this argument because Suburban is barred from raising new 
arguments for the first time in its reply brief.  Util. Serv. Partners, Inc. v. Pub. Util. Comm., 124 
Ohio St.3d 284, 2009-Ohio-6764, 921 N.E.2d 1038, ¶ 54. 
January Term, 2020 
 
7
Suburban’s.  Rather, Suburban alleged that the commission erred when it applied 
the language of Suburban’s release “to claims that Suburban did not make.”  To be 
clear, Suburban—referring to its own release—conceded that the commission’s 
“Order cite[d] the controlling language of the 1995 Stipulation.”  That is, instead 
of alleging error in the commission’s failure to apply Columbia’s release, Suburban 
argued on rehearing that “[t]he Order misrepresent[ed] Suburban’s claim” by 
“fail[ing] to apply the express terms of the Stipulation [i.e., Suburban’s release] to 
the relevant facts.” 
{¶ 17} Suburban did not raise the same argument on rehearing that it raises 
on appeal.  The failure to preserve this specific claim in an application for rehearing 
deprives us of jurisdiction to review it.  In re Complaint of Cameron Creek Apts. v. 
Columbia Gas of Ohio, 136 Ohio St.3d 333, 2013-Ohio-3705, 995 N.E.2d 1160,  
¶ 23-24. 
2. Whether the commission failed to explain its order 
{¶ 18} Suburban next alleges that the commission violated R.C. 4903.09 
because its order fails to cite evidence and sufficiently detail its reasons for refusing 
to enforce the 1995 Stipulation.  Suburban maintains that, unlike Columbia, it 
offered credible evidence to support its interpretation that the 1995 Stipulation 
prohibited Columbia from offering builder incentives and duplicating Suburban’s 
facilities.  Suburban further maintains that the commission simply agreed with 
Columbia and summarily rejected Suburban’s claims without record support or 
explanation. 
{¶ 19} Under R.C. 4903.09, the commission’s opinions must set forth “the 
reasons prompting” its decisions, based upon its findings of fact.  The commission 
“ ‘abuses its discretion if it renders an opinion on an issue without record support’ ” 
and a supporting rationale.  Tongren v. Pub. Util. Comm., 85 Ohio St.3d 87, 90, 706 
N.E.2d 1255 (1999), quoting Cleveland Elec. Illum. Co. v. Pub. Util. Comm., 76 
Ohio St.3d 163, 166, 666 N.E.2d 1372 (1996).  Although strict compliance with the 
SUPREME COURT OF OHIO 
 
8
terms of R.C. 4903.09 is not required, a commission order must contain sufficient 
detail for this court to determine the factual basis and reasoning relied on by the 
commission.  Id. at 89; Payphone Assn. v. Pub. Util. Comm., 109 Ohio St.3d 453, 
2006-Ohio-2988, 849 N.E.2d 4, ¶ 32.  After review, we conclude that the order here 
complies with R.C. 4903.09. 
{¶ 20} The commission first reviewed the pertinent language of the 1995 
Stipulation and Suburban’s accompanying release.  The commission concluded that 
it was not necessary to examine “contemporaneous documents or statements which 
may be considered as probative * * * evidence of intent of the document” because 
“no ambiguity exists” in the terms of the 1995 Stipulation.  Pub. Util. Comm. No. 
17-2168-GA-CSS at ¶ 54 (Apr. 10, 2019). 
{¶ 21} Suburban repeatedly faults the commission for not citing evidence 
that refutes Suburban’s interpretation of the stipulation.  As Suburban sees it, 
“[w]ithout record evidence to the contrary, Suburban’s interpretation of the 1995 
Stipulation by the drafters of the language is neither ‘speculative’ nor 
‘unsubstantiated,’ and it should be adopted.”  Extrinsic evidence, however, may not 
be considered when the outcome turns solely on the plain language of an agreement.  
Sunoco, Inc. (R&M) v. Toledo Edison Co., 129 Ohio St.3d 397, 2011-Ohio-2720, 
953 N.E.2d 285, ¶ 47. 
{¶ 22} The commission found that the 1995 Stipulation is unambiguous.  
Suburban does not argue on appeal that the 1995 Stipulation is ambiguous.  In fact, 
by arguing that the commission failed to apply the “express” terms of the 1995 
Stipulation, Suburban essentially concedes that the stipulation is unambiguous.  We 
reject Suburban’s argument that the commission violated R.C. 4903.09. 
3. Whether Columbia’s tariff authorizes builder incentives 
{¶ 23} Suburban’s third argument under its first proposition of law is that 
Columbia has no tariff on file with the commission that authorizes the company to 
offer builder incentives.  Suburban asserts that the absence of such tariff language 
January Term, 2020 
 
9
violates the express terms of the 1995 Stipulation and also violates R.C. 4905.30(A) 
(requiring public utilities to print and file schedules showing all rates, 
classifications, and charges for services furnished) and 4905.32 (prohibiting 
charges and rates different from the charges and rates specified in the schedule filed 
with the commission and forbidding any direct or indirect refunds except as 
specified in the schedule). 
{¶ 24} The commission rejected this argument.  Pub. Util. Comm. No. 17-
2168-GA-CSS at ¶ 53-54, 61 (Apr. 10, 2019).  In its second rehearing entry, it found 
that Columbia’s tariff schedules are “sufficiently detailed” to authorize the payment 
of incentives to builders and the recovery of incentive payments from ratepayers 
under the EfficiencyCrafted Homes Program.  Pub. Util. Comm. No. 17-2168-GA-
CSS, ¶ 42 (Oct. 23, 2019).  Suburban does not even cite the applicable tariff, let 
alone point to any language—or lack thereof—in the tariff that would support its 
claim.  Suburban has failed to carry its burden of demonstrating error on appeal.  
See In re Application of Duke Energy Ohio, Inc., 131 Ohio St.3d 487, 2012-Ohio-
1509, 967 N.E.2d 201, ¶ 17-18. 
{¶ 25} For the foregoing reasons, we reject Suburban’s first proposition of 
law. 
B. Proposition of law No. II: Whether the commission erred in finding that it 
lacked authority to preclude duplication of facilities 
{¶ 26} At the commission, Suburban challenged Columbia’s extension of 
its gas-distribution main along the south side of Cheshire Road, parallel to 
Suburban’s main on the north side of Cheshire.  Suburban conceded that Columbia 
could extend its main to distribute natural gas to areas that do not have service, but 
it argued that Glenross was not an unserved area because Suburban had served 
Glenross since 2004.  The commission faulted Suburban for failing to cite any 
precedent precluding a natural-gas company from serving a new customer if that 
service would result in a duplication of facilities.  The commission also found that 
SUPREME COURT OF OHIO 
 
10 
the record did not support Suburban’s claim that Columbia’s pipeline extension 
resulted in duplicate facilities on Cheshire Road. 
1. The commission did not hold that it lacked authority to preclude the 
duplication of utility facilities 
{¶ 27} Suburban argues on appeal that the commission erroneously 
concluded that it lacked authority under R.C. Title 49 to prevent or remedy the 
duplication of utility facilities.  Suburban avers that the commission ignored 
numerous cases cited by Suburban that have held that duplicate utility facilities are 
against the public interest.  The commission, however, did not hold that it lacked 
authority to prohibit or remedy the duplication of natural-gas facilities.  It found 
that Suburban had cited no precedent for the proposition that the commission must 
preclude a natural-gas company from serving new customers if that service would 
“result in the duplication of facilities.”  Pub. Util. Comm. No. 17-2168-GA-CSS at 
¶ 55 (Apr. 10, 2019).  The commission merely held that Suburban failed to cite 
caselaw applicable to the facts of its case and thereby did not carry its burden as the 
complainant under R.C. 4905.26. 
2. The commission adequately explained why it did not follow the “precedent” 
relied on by Suburban 
{¶ 28} Suburban counters that the commission departed from precedent 
without adequate explanation.  Suburban maintains that the cases it cited “are 
directly on point” because the commission has regulatory authority over all public 
utilities under R.C. 4905.04, regardless of type. 
{¶ 29} We have instructed the commission to “respect its own precedents 
in its decisions to assure the predictability which is essential in all areas of the law, 
including administrative law.”  Cleveland Elec. Illum. Co. v. Pub. Util. Comm., 42 
Ohio St.2d 403, 431, 330 N.E.2d 1 (1975), superseded on other grounds by statute 
as recognized in Babbit v. Pub. Util. Comm., 59 Ohio St.2d 81, 89, 391 N.E.2d 
1376 (1979).  If the commission departs from precedent, it must explain why, 
January Term, 2020 
 
11 
though the explanatory hurdle is not particularly high.  See In re Application of 
Columbus S. Power Co., 128 Ohio St.3d 512, 2011-Ohio-1788, 947 N.E.2d 655,  
¶ 52. 
{¶ 30} The commission explained that the cases cited by Suburban were 
inapplicable because they did not involve “a natural gas company [being] precluded 
from serving a new customer if such service would result in the duplication of 
facilities.”  Pub. Util. Comm. No. 17-2168-GA-CSS at ¶ 55 (Apr. 10, 2019).  The 
commission also cited longstanding precedent establishing that natural-gas 
companies are not bound by certified service territories and may serve any customer 
in any part of the state.  The commission reiterated in its second rehearing entry 
that “the case law cited by Suburban * * * does not contradict or question” the 
commission’s conclusion that Suburban’s cited cases are inapplicable, “as many of 
the cases are factually and legally dissimilar, if not wholly irrelevant to the 
circumstances before us.”  Pub. Util. Comm. No. 17-2168-GA-CSS at ¶ 35 (Oct. 
23, 2019).  We conclude that the commission adequately explained why it was not 
compelled to follow Suburban’s alleged precedents by stating that the cases cited 
by Suburban did not involve natural-gas companies and did not adjudicate the same 
issue.  See Columbus S. Power Co. at ¶ 52-54. 
3. The record supports the commission’s order 
{¶ 31} Third, Suburban maintains that it submitted sufficient evidence to 
support its duplicate-facilities claim.  The commission concluded that Suburban 
had presented no evidence of any unnecessary duplication of natural-gas facilities 
on Cheshire Road.  The commission’s order cited testimony from Delaware County 
Chief Deputy Engineer Robert Riley, who testified that he knew of no unnecessary 
duplication of natural-gas facilities in Delaware County, even with the recent 
extension of Columbia’s distribution main on Cheshire Road.  Riley also testified 
that some duplication of facilities may be inherent in the design of gas lines and 
even unavoidable due to engineering issues. 
SUPREME COURT OF OHIO 
 
12 
{¶ 32} To be sure, Riley testified on redirect that he did not specifically 
consider whether Columbia’s distribution main on Cheshire Road duplicated 
Suburban’s main because he “was not familiar with what other gas lines exist in 
that same area.”  Even so, this testimony does not help Suburban.  As the 
complainant before the commission, Suburban bore the burden of proving the 
allegations in the complaint.  Luntz Corp. v. Pub. Util. Comm., 79 Ohio St.3d 509, 
513-514, 684 N.E.2d 43 (1997).  Riley’s testimony on redirect does not constitute 
affirmative evidence that Columbia duplicated Suburban’s facilities on Cheshire 
Road. 
{¶ 33} Other testimony in the record, from Suburban’s own witness, 
undermined Suburban’s case on this point.  Aaron Roll, Suburban’s vice president 
of system development, admitted on cross-examination that Pulte was under no 
legal obligation to select Suburban to serve the Glenross South development.  
Moreover, Roll conceded that Columbia was entitled to construct a distribution 
main down Cheshire Road to this development. 
4. Suburban has not carried its burden of demonstrating error 
{¶ 34} As shown above, the record supports the commission’s 
determination.  Suburban points to other evidence that it asserts the commission 
ignored, but we conclude that Suburban’s evidence is either irrelevant or does not 
justify reversal. 
{¶ 35} For example, Suburban, citing testimony in the record, claims that it 
established that “a duplication of utility facilities already located in the area would 
be a waste of resources and would prove to be uneconomical, inefficient, and 
contrary to good public policy.”  But as already noted, other testimony established 
that some duplication of facilities may be inherent and even necessary. 
{¶ 36} Suburban also repeatedly states that it was already serving the 
Glenross subdivision when Columbia extended its gas main to serve Glenross 
South.  But although Suburban provides distribution service to the Glenross 
January Term, 2020 
 
13 
subdivision north of Cheshire Road, evidence showed that the Glenross South 
subdivision was still under development and that no gas company was providing 
distribution service to that subdivision when Columbia extended its gas main along 
the south side of Cheshire Road. 
{¶ 37} Given its existing distribution main on Cheshire Road, Suburban 
asserts that the commission failed to take into account that it was obligated to serve 
the new phases of Glenross upon request.  This argument ignores that the developer 
of Glenross South never requested that Suburban provide distribution service to the 
new phases. 
{¶ 38} Suburban additionally maintains that the commission was guilty of 
“minimizing and twisting the concerns expressed by” Delaware County witness 
Riley.  According to Suburban, Riley testified that he was concerned by the 
allegations of Suburban’s complaint, “including increased costs to customers, 
subsidizing the incentive program, and the unnecessary duplication of natural gas 
facilities in the County.”  It is clear, however, that Riley was testifying only 
generally about the concept of unnecessary duplicate facilities and was not 
weighing in on the merits of Suburban’s complaint. 
{¶ 39} Finally, Suburban notes that Riley defined an “unnecessary 
duplication of gas facilities” as a situation in which “there’s not a legitimate 
engineering purpose for having that duplication.”  According to Suburban, 
“Columbia has not and cannot offer a legitimate engineering purpose for extending 
gas facilities into an area where Suburban’s gas facilities already existed.”  Yet 
Suburban cites no authority that required the commission to adopt Riley’s 
definition as the standard to be applied in this case. 
{¶ 40} In the end, Suburban asks this court to reweigh the evidence. But 
that is not our function on appeal.  Elyria Foundry Co. v. Pub. Util. Comm., 114 
Ohio St.3d 305, 2007-Ohio-4164, 871 N.E.2d 1176, ¶ 39.  We accordingly reject 
Suburban’s second proposition of law. 
SUPREME COURT OF OHIO 
 
14 
C. Proposition of law No. III: Whether the commission erred in failing to 
find that Columbia implemented its builder program in an unfair and 
anticompetitive manner 
{¶ 41} Suburban argues that the commission erred in failing to find that 
Columbia implemented its builder-incentive program in an unfair and 
anticompetitive manner in order to expand its service territory into an area already 
served by Suburban.  Suburban maintains that when the commission approved 
Columbia’s 2016 DSM-program application, it placed certain limitations and 
restrictions on Columbia’s authority to offer builder incentives.  Suburban claims 
that Columbia exceeded the scope of its authority under the builder program when 
it offered incentives for homes built in Glenross South.  We reject proposition of 
law No. III for the following reasons. 
1. Whether Columbia offered builder incentives outside its “service territory” 
{¶ 42} Suburban contends that based on Columbia’s 2016 DSM 
application, the commission authorized Columbia to pay incentives under the 
builder program only for homes built within Columbia’s service territory and for 
customers served by Columbia.  Suburban maintains that despite the commission’s 
DSM order, Columbia offered incentives to Pulte for homes built outside 
Columbia’s service territory and for home buyers who are not current Columbia 
customers.  According to Suburban, this practice violates the state policy, set forth 
in R.C. 4929.02(A)(12), to promote an alignment of natural-gas-company and 
consumer interests in energy efficiency and conservation. 
{¶ 43} Suburban has forfeited this argument.  The commission rejected 
Suburban’s service-territory allegation, finding that the Glenross South 
development was in the “service territory” of both Columbia and Suburban, as that 
term was used in Columbia’s DSM-program application.  Pub. Util. Comm. No. 
17-2168-GA-CSS at ¶ 57 (Apr. 10, 2019).  Suburban did not seek rehearing of the 
commission’s determination that Glenross South was within Columbia’s service 
January Term, 2020 
 
15 
territory.  Suburban also did not argue on rehearing that Columbia’s builder 
incentives were limited to customers already served by Columbia.  Moreover, 
Suburban’s rehearing application did not even mention R.C. 4929.02(A)(12), let 
alone argue that Columbia’s builder program is contrary to the state policy set forth 
in that provision. 
{¶ 44} Because Suburban did not raise any of these arguments on rehearing 
before the commission, we lack jurisdiction to address them on appeal.  R.C. 
4903.10; Ohio Partners for Affordable Energy v. Pub. Util. Comm., 115 Ohio St.3d 
208, 2007-Ohio-4790, 874 N.E.2d 764, ¶ 15. 
2. Whether Columbia used its builder-incentive program as a competitive-
response tool 
{¶ 45} Suburban contends that the commission erred in not finding that 
Columbia deployed its builder program in an abusive or anticompetitive manner.  
Suburban maintains that Columbia was authorized to encourage the construction of 
energy-efficient homes, not to use builder incentives to compete against Suburban 
for new customers. 
a. Whether the commission ignored evidence that Columbia used builder 
incentives as a competitive-response tool 
{¶ 46} The commission found that there was no evidence that Columbia 
deployed its builder incentives in an abusive or anticompetitive manner in order to 
expand into Glenross South.  Specifically, the commission found that the record 
did not establish that the builder incentives were the deciding factor that led Pulte 
to choose Columbia over Suburban.  But even if the incentives were the deciding 
factor, the commission concluded that the outcome would have been the same.  The 
commission acknowledged that if a builder values energy efficiency, Columbia’s 
incentives will result in a competitive advantage over Suburban when competing to 
distribute natural-gas service.  The commission found that this advantage should 
SUPREME COURT OF OHIO 
 
16 
not be “stripped away” from Columbia simply because Suburban chose not to offer 
similar incentives.  Pub. Util. Comm. No. 17-2168-GA-CSS at ¶ 60 (Apr. 10, 2019). 
{¶ 47} On appeal, Suburban argues that the commission ignored undisputed 
evidence that Columbia used builder incentives to respond to competition by 
Suburban in an area where Suburban was already providing service.  Suburban 
points to testimony from Zach McPherson, Columbia’s new-business manager, that 
Columbia told the developer of Glenross about the builder-incentive program.  
Suburban also cites testimony from Joseph Codispoti, Columbia’s lead-
development manager, who conceded that the builder program gives Columbia a 
competitive advantage over Suburban.  The commission did not ignore this 
testimony. 
{¶ 48} The commission found that Columbia was authorized to offer 
incentives under this program to encourage developers to choose Columbia over 
competitors, given that some developers may value energy efficiency and may 
prefer to receive service from a company offering energy-efficiency initiatives.  In 
addition, the commission acknowledged that Columbia had a competitive 
advantage over Suburban as a result of its energy-efficiency incentives.  But the 
commission rejected the argument that this advantage violated R.C. 4905.35(A) 
(which forbids a public utility from subjecting a corporation to “undue or 
unreasonable prejudice or disadvantage”), noting in its second rehearing entry that 
Suburban could eliminate any competitive advantage by requesting its own energy-
efficiency program.  Pub. Util. Comm. No. 17-2168-GA-CSS at ¶ 23 (Oct. 23, 
2019). 
{¶ 49} The commission considered Suburban’s evidence, but it did not 
assign the testimony the same significance as Suburban.  That weighing decision, 
in addition to being highly discretionary, is beyond the scope of Suburban’s 
argument. 
January Term, 2020 
 
17 
b. Whether the commission departed from precedent when it found that Columbia 
did not use builder incentives as a competitive-response tool 
{¶ 50} Suburban also contends that the commission departed from 
precedent when it found that Columbia did not use builder incentives as a 
competitive-response tool at Glenross South.  In 2011, the commission rejected 
Suburban’s application to offer builder incentives, in part on the ground that 
Suburban’s proposed builder program was merely “a competitive response program 
and only intended to help Suburban compete with other natural gas companies for 
new load.”  In re Self-Complaint of Suburban Natural Gas Co. Concerning Its 
Existing Tariff Provisions, Pub. Util. Comm. No. 11-5846-GA-SLF, 10 (Aug. 15, 
2012) (“Suburban Self-Complaint Case”).  According to Suburban, the commission 
in this case failed to explain its departure from this precedent as required by 
Columbus S. Power Co., 128 Ohio St.3d 512, 2011-Ohio-1788, 947 N.E.2d 655, at 
¶ 52, and R.C. 4903.09. 
{¶ 51} Suburban, however, did not argue on rehearing that the commission 
failed to explain its departure from the Suburban Self-Complaint Case.  Although 
Suburban cited R.C. 4903.09 five times in its rehearing application, it never argued 
that the commission violated this statute when it refused to follow the Suburban 
Self-Complaint Case.  Suburban’s failure to raise these specific arguments through 
an application for rehearing deprived the commission of a chance to consider the 
arguments below and jurisdictionally bars this court from reviewing them now.  See 
R.C. 4903.10; Ohio Partners for Affordable Energy, 115 Ohio St.3d 208, 2007-
Ohio-4790, 874 N.E.2d 764, at ¶ 15. 
3. Whether the commission erred regarding Suburban’s failure to intervene in 
Columbia’s 2016 DSM case 
{¶ 52} Suburban asserts that the commission erred when it determined that 
Suburban should have intervened in the 2016 DSM case to raise concerns about 
Columbia’s unfair and anticompetitive use of its builder-incentive program.  
SUPREME COURT OF OHIO 
 
18 
Suburban maintains that it had no reason to intervene in the 2016 DSM case to 
challenge the builder program because it had no expectation that Columbia would 
implement the program in an unfair and anticompetitive manner. 
{¶ 53} Suburban has not established reversible error.  Although the 
commission did note that “Suburban failed to intervene or voice its concerns 
regarding the DSM Program in the 2016 DSM Case or earlier DSM approval 
cases,” Pub. Util. Comm. No. 17-2168-GA-CSS at ¶ 58 (Apr. 10, 2019), the 
commission did not find that Suburban had forfeited any arguments.  As previously 
discussed, the commission’s order addressed and found no merit to Suburban’s 
claims “that Columbia has deployed its DSM Program in an abusive or 
anticompetitive manner in order to expand its service territory,” id. at ¶ 60, as well 
as Suburban’s other claims regarding Columbia’s implementation of its builder 
program. 
4. Whether the commission erred in finding that Suburban’s anticompetitive-
conduct claim was raised for the first time on rehearing 
{¶ 54} Suburban challenges 
the commission’s determination that 
Suburban’s unfair-and-anticompetitive-conduct claim was a new issue raised for 
the first time on rehearing.  The commission found in its second rehearing entry 
that Suburban had altered one of the grounds in its complaint by asserting a new 
argument at the rehearing stage.  According to the commission, Suburban’s 
complaint alleged that Columbia violated R.C. 4905.35 because its builder 
incentives constituted an “ ‘undue or unreasonable preference or advantage’ offered 
‘for the purpose of destroying competition.’ ”  Pub. Util. Comm. No. 17-2168-GA-
CSS at ¶ 22 (Oct. 23, 2019), quoting the complaint.  The commission found that 
this allegation differed from Suburban’s rehearing argument that Columbia used 
builder incentives in an unfair and anticompetitive manner.  Id. at ¶ 23. 
{¶ 55} After the commission made this finding in its second rehearing entry, 
Suburban never filed a subsequent application for rehearing and thus never alleged 
January Term, 2020 
 
19 
error in the commission’s finding that Suburban had raised a new argument at the 
rehearing stage.  Accordingly, we lack jurisdiction to consider the argument on 
appeal.  In re Application of Columbus S. Power Co., 147 Ohio St.3d 439, 2016-
Ohio-1608, 67 N.E.3d 734, ¶ 56. 
D. Proposition of law No. IV: Whether the commission erred in finding that 
Suburban failed to meet its burden of proving the allegations in the 
complaint 
{¶ 56} Suburban argues that the commission erred in finding that Suburban 
did not carry its burden of proving the allegations in Count Five of the complaint.  
Suburban contends that it demonstrated that Columbia violated numerous statutory 
provisions in implementing its builder-incentive program but that the commission 
summarily dismissed these allegations, in violation of R.C. 4903.09. 
{¶ 57} The commission found that the statutory violations alleged in Count 
Five of the complaint hinged on Suburban proving the other allegations in the 
complaint.  The commission summarily rejected the claims in Count Five after 
finding that Suburban had failed to carry its burden of proof on those other 
allegations. 
{¶ 58} On rehearing, Suburban argued that the statutory violations alleged 
in Count Five were independent of the claims asserted under the other counts.  The 
commission rejected this argument in its second rehearing entry, noting that 
Suburban had argued to the commission in its posthearing brief that the “ ‘same 
proofs’ ” that demonstrated the alleged violations in the other counts would also 
prove the statutory violations in Count Five.  Pub. Util. Comm. No. 17-2168-GA-
CSS at ¶ 30 (Oct. 23, 2019), quoting the posthearing brief.  The commission denied 
rehearing after finding that Suburban had failed to offer additional evidence or a 
separate legal theory as to how the allegations in Count Five stood on their own. 
{¶ 59} Suburban has failed to demonstrate error in the commission’s 
summary dismissal of these statutory violations alleged in Count Five of 
SUPREME COURT OF OHIO 
 
20 
Suburban’s complaint.  As set forth above, the commission’s order and rehearing 
entry explained the reasoning for rejecting Suburban’s claims, as required by R.C. 
4903.09.  Even so, Suburban argues on appeal that, contrary to the commission’s 
summary conclusion, “the statutory violations can and do stand on their own.”  But 
Suburban inexplicably attempts to prove that Columbia violated the various statutes 
based solely on arguments raised in its first three propositions of law.  Suburban’s 
failure to identify an independent legal theory or any evidence undermines its claim 
that these alleged statutory violations stand on their own.  Therefore, we reject 
Suburban’s fourth proposition of law.  See Util. Serv. Partners, Inc. v. Pub. Util. 
Comm., 124 Ohio St.3d 284, 2009-Ohio-6764, 921 N.E.2d 1038, ¶ 39. 
IV. CONCLUSION 
{¶ 60} For the foregoing reasons, Suburban has not demonstrated that the 
commission erred in deciding the complaint in Columbia’s favor.  Therefore, we 
affirm the commission’s orders. 
Orders affirmed. 
O’CONNOR, C.J., and FRENCH, FISCHER, DEWINE, and STEWART, JJ., 
concur. 
KENNEDY, J., concurs in judgment only. 
_________________ 
 
Carpenter, Lipps & Leland, L.L.P., Kimberly W. Bojko, and Michael H. 
Carpenter, for appellant. 
 
Dave Yost, Attorney General, and Thomas G. Lindgren, John H. Jones, and 
Robert A. Eubanks, Assistant Attorneys General, for appellee. 
 
Porter, Wright, Morris & Arthur, L.L.P., Mark S. Stemm, Eric B. Gallon, 
and Devan K. Flahive; and Joseph Clark, for intervening appellee. 
_________________