Case Title: Weiss v. Pub. Util. Comm.

Citation: 2000-Ohio-5

Docket Number: 19990444

State: ohio

Court: Ohio Supreme Court

Date: 2000-09-20T00:00:00Z

Document:
[Cite as Weiss v. Pub. Util. Comm., 90 Ohio St.3d 15, 2000-Ohio-5.] 
 
 
 
 
 
WEISS, D.B.A. CENTER WEST REALTY COMPANY, ET AL., APPELLANT, v. PUBLIC 
UTILITIES COMMISSION OF OHIO ET AL., APPELLEES. 
[Cite as Weiss v. Pub. Util. Comm. (2000), 90 Ohio St.3d 15.] 
Public Utilities Commission — Allegations that rates charged outside the 
geographical area of a “competitive pilot program” were discriminatory — 
R.C. 4905.31, 4905.33, and 4905.35 do not prohibit all discrimination — 
Discounts are permitted based on competition — Commission’s dismissal of 
complaint affirmed. 
(No. 99-444 — Submitted May 23, 2000 — Decided September 20, 2000.) 
APPEAL from the Public Utilities Commission of Ohio, No. 97-876-EL-CSS. 
 
This is an appeal from orders of the Public Utilities Commission of Ohio in 
a complaint proceeding brought by Mark R. Weiss, doing business in the names of 
several commercial real estate companies, against the Cleveland Electric 
Illuminating Company (“CEI”), pursuant to R.C. 4905.26.  Weiss complained that 
the rates CEI charged him for service at locations outside the geographic 
boundaries of CEI’s “Competitive Pilot Program” were discriminatory and 
prejudicial, in violation of R.C. 4905.31, 4905.33, and 4905.35.  On January 14, 
1999, the commission issued its opinion and order, dismissing Weiss’s complaint 
 
 
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on the basis that CEI’s rates were not discriminatory or prejudicial in violation of 
the statute. 
 
Weiss appealed the commission’s decisions to this court, and CEI intervened 
as an appellee. 
 
The cause is now before this court upon an appeal as of right. 
__________________ 
 
Spangenberg, Shibley & Liber, Dennis R. Landsdowne and Mary A. 
Cavanaugh; and Frank E. Piscitelli, Jr., for appellant. 
 
Betty D. Montgomery, Attorney General, Duane W. Luckey, Tanisha Lyon 
Brown and William L. Wright, Assistant Attorneys General, for appellee Public 
Utilities Commission of Ohio. 
 
Jones, Day, Reavis & Pogue, Paul T. Ruxin, David A. Kutik and Helen L. 
Liebman; and James W. Burk, for intervening appellee Cleveland Electric 
Illuminating Company. 
__________________ 
 
LUNDBERG STRATTON, J.  This appeal concerns the reasonableness and 
legality of rates charged by CEI for electric service rendered to customers at 
different locations within its service territory. 
 
In 1992, CEI sought commission approval of its Competitive Pilot Program, 
which would permit it to enter into “competitive response contracts” for service to 
 
 
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eligible customers at discounts from its tariffed rates, and other benefits that were 
not available to its tariff customers.  To be eligible for this program, a customer 
had to be a commercial or industrial customer with a demand between one hundred 
fifty kW and five hundred kW and be located where it could receive electric 
service from Cleveland Public Power (“CPP”).  In 1993, the PUCO approved 
CEI’s proposed Competitive Pilot Program and approved an expansion of it to 
include commercial and industrial customers with demands between thirty kW and 
one hundred fifty kW. 
 
CPP provides service to much of the east side of Cleveland, but not to most 
of Cleveland’s west side and western suburbs.  In 1997, the commission denied an 
application by CEI to expand its Competitive Pilot Program to include the west 
side of Cleveland, where CEI anticipated that competitive electric service from 
CPP could become available.  In denying the expansion application, the 
commission said that it would consider expansion on an individual, case-by-case 
basis when actual competition was shown to exist. 
 
Weiss operates three commercial real estate properties (office buildings) in 
Rocky River, Ohio, a western Cleveland suburb outside the previously approved 
geographical boundaries of the Competitive Pilot Program.  CPP does not provide 
service in Rocky River.  After CEI determined that because of the locations of 
Weiss’s office buildings, Weiss was not entitled to discounts and other benefits 
 
 
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extended under the Competitive Pilot Program, Weiss complained to the 
commission that his exclusion from CEI’s Competitive Pilot Program violated the 
prohibitions of R.C. 4905.31, 4905.33, and 4905.35 against discrimination and 
preferences, arguing that those statutes are “clear and unambiguous in [their] 
prohibition of discriminatory pricing.” 
 
We reject Weiss’s argument.  R.C. 4905.31, 4905.33, and 4905.35 do not 
prohibit all discrimination. 
 
R.C. 4905.31(D) explicitly permits a public utility to enter into “any 
reasonable arrangement” with its customers that discriminates among them 
according to “[a] classification of service based upon * * * any * * * reasonable 
consideration.”  Thus, a discriminatory classification is not prohibited if it is 
reasonable. 
 
R.C. 
4905.33 
prohibits 
discriminatory 
pricing 
for 
“like 
and 
contemporaneous service” rendered “under substantially the same circumstances 
and conditions.”  If the utility services rendered to customers are different or if 
they are rendered under different circumstances or conditions, differences in the 
prices charged and collected are not proscribed by R.C. 4905.33. 
 
R.C. 4905.35 prohibits a utility from making or giving “any undue or 
unreasonable preference or advantage” or imposing “any undue or unreasonable 
prejudice or disadvantage.”  The statute does not prohibit all preferences, 
 
 
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advantages, prejudices, or disadvantages—only those that are undue or 
unreasonable. 
 
As to R.C. 4905.31, we do not accept Weiss’s argument that the phrase “any 
other reasonable consideration” must be limited by the specific statutory 
considerations that precede it.  Those considerations are “the quantity used, the 
time when used, the purpose for which used, and the duration of use.” 
 
In State ex rel. Purdy v. Clermont Cty. Bd. of Elections (1997), 77 Ohio 
St.3d 338, 673 N.E.2d 1351, we said: “ ‘If the meaning of a statute is unambiguous 
and definite, then it must be applied as written and no further interpretation is 
appropriate’ ” and “ ‘Words used in a statute must be accorded their usual, normal 
or customary meaning.’ ”  Id. at 340, 673 N.E.2d at 1353, quoting State ex rel. 
Herman v. Klopfleisch (1995), 72 Ohio St.3d 581, 584, 651 N.E.2d 995, 997, and 
State ex rel. Hawkins v. Pickaway Cty. Bd. of Elections (1996), 75 Ohio St.3d 275, 
277, 662 N.E.2d 17, 19.  In Purdy, we adopted the meaning of the word “any” as 
set forth in Webster’s Third New International Dictionary (1971) 97:  “ ‘Any’ 
means ‘one or some indiscriminately of whatever kind.’ ”  Id.  Purdy supports the 
conclusion that the phrase “any other reasonable consideration” in R.C. 
4905.31(D) is not limited by statutory examples of specific other valid 
considerations or by decisions of this court approving of considerations of cost of 
service and customers’ service needs. 
 
 
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Moreover, the commission’s 1993 approval of CEI’s Competitive Pilot 
Program and its expansion were grounded on the existence of a competitive service 
provider within CEI’s service territory.  In 1997, the commission declined to 
expand the availability of the benefits offered under the Competitive Pilot Program 
and, by so doing, emphasized the existence of a competitive service provider for a 
CEI customer as a reasonable consideration justifying rates other than tariffed rates 
under competitive response contracts entered into pursuant to R.C.  4905.31.  The 
commission found that “[c]lassifying customers based on the availability of a 
competitive alternative for electric service is, in this case, a reasonable basis for an 
electric utility to classify its customers.”  Based on that finding, the commission 
further found that CEI’s Competitive Pilot Program and the competitive response 
contracts entered into under the program did not violate R.C. 4905.31. 
 
We accept the commission’s interpretation of R.C. 4905.31 as allowing 
discounts based on the existence of competition.1  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.  
Collinsworth v. W. Elec. Co. (1992), 63 Ohio St.3d 268, 272, 586 N.E.2d 1071, 
1074. “[L]ong-standing administrative interpretations [of statutes] are entitled to 
special weight.” Cleveland v.  Pub. Util. Comm. (1981), 67 Ohio St.2d 446, 451, 
21 O.O.3d 279, 282, 424 N.E.2d 561, 565. 
 
 
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Weiss contends that CEI’s Competitive Pilot Program and his exclusion 
from it violate the proscriptions of R.C. 4905.33 because the program results in 
different rates being charged to customers in the same class for contemporaneous 
service rendered under substantially the same circumstances and conditions.  Weiss 
defines the class as being small business customers falling within the same demand 
range. 
 
However, as the commission noted, there is a distinction between CEI’s 
small business customers that are located where they can receive electric service 
from a competitor of CEI (in this case, CPP) and those small business customers 
that are located where no competitive electric service is available to them.  We 
agree with the commission’s finding that the difference between such customers, 
based on location determined by availability of competitive electric service, 
constituted a real difference with a reasonable basis and with the commission’s 
conclusion that the difference justified a rate differential between the two 
geographical areas. 
 
Moreover, within each area, there is no rate differential, and CEI provides 
service within each area under substantially the same circumstances and 
conditions.  Every other small business customer located within the portion of 
CEI’s service territory where competitive electric service is unavailable is required 
 
 
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to pay the same tariff rates as are payable by Weiss for the same electrical usage. 
Thus, as the commission determined, there was no violation of R.C. 4905.33. 
 
Weiss also contends that CEI’s Competitive Pilot Program and its 
competitive response contracts gave undue or unreasonable preference or 
advantage to certain of CEI’s customers with whom he competed, resulting in his 
being subjected to undue or unreasonable prejudice or disadvantage in violation of 
R.C. 4905.35. Weiss’s contention fails in several respects. 
 
R.C. 4905.35 proscribes public utilities from giving undue or unreasonable 
preferences or advantages, and although CEI’s Competitive Pilot Program makes 
available to some of its customers certain advantages that are not available to 
Weiss, Weiss made no showing to the commission that such preferences and 
advantages were undue or unreasonable. 
 
We agree with the commission’s finding that Weiss was not prejudiced by 
the existence of CEI’s Competitive Pilot Program, from which Weiss was 
geographically excluded, because, if there were no Competitive Pilot Program, 
owners of commercial buildings located where CEI and CPP compete with each 
other would still be eligible for CPP’s lower rates that are not available to Weiss.  
The commission said: “Therefore, * * * Complainant’s competitors would still 
have an advantage over Complainant with regard to the rates paid for electric 
service.  We do not believe that Respondent’s [CEI’s] Competitive Pilot Program 
 
 
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does give customers in the program an undue or unreasonable advantage vis-à-vis 
the Complainant.” 
 
In addition to the foregoing claimed errors based on Ohio’s statutory 
regulatory scheme, Weiss argues that denial to him of the benefits available under 
CEI’s Competitive Pilot Program constitutes a denial of equal protection of the 
law.  The Equal Protection Clause of the United States Constitution, as well as the 
corresponding clause of the Ohio Constitution, “[s]imply stated, * * * requires that 
individuals be treated in a manner similar to others in like circumstances.”  State ex 
rel. Doersam v. Indus. Comm. (1989), 45 Ohio St.3d 115, 119, 543 N.E.2d 1169, 
1173.  There was no denial to Weiss of equal protection of the law, because denial 
to Weiss of the benefits of the Competitive Pilot Program was based on a 
reasonable classification of customers, and CEI’s customers in the same 
classification as Weiss are treated similarly to Weiss. 
 
Last, we reject Weiss’s argument that the commission committed reversible 
error in refusing to hear his complaint case as a class action. 
 
R.C. 4901.13 provides that the “commission may adopt and publish rules to 
govern its proceedings and to regulate the mode and manner of all * * * hearings 
relating to parties before it.”  “Under R.C. 4901.13 the commission has broad 
discretion in the conduct of its hearings.”  Duff v. Pub. Util. Comm. (1978), 56 
Ohio St.2d 367, 379, 10 O.O.3d 493, 500, 384 N.E.2d 264, 273.  “It is well-settled 
 
 
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that pursuant to R.C. 4901.13, the commission has the discretion to decide how, in 
light of its internal organization and docket considerations, it may best proceed to 
manage and expedite the orderly flow of its business, avoid undue delay and 
eliminate unnecessary duplication of effort.”  (Footnote omitted.)  Toledo 
Coalition for Safe Energy v. Pub. Util. Comm. (1982), 69 Ohio St.2d 559, 560, 23 
O.O.3d 474, 475, 433 N.E.2d 212, 214.  If Weiss had prevailed, the commission 
would have been obligated to adjust rates for the remaining ratepayers, 
accomplishing the same purpose as a class action. 
 
Based on the commission’s authority invested by R.C. 4901.13 and its broad 
discretion to act under that statutory provision, we find no error on the part of the 
commission in refusing to hear Weiss’s complaint case as a class action. 
 
Accordingly, the commission’s orders below are hereby affirmed. 
Orders affirmed. 
 
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY and CHRISTLEY, JJ., 
concur. 
 
PFEIFER, J., concurs in judgment only. 
 
JUDITH A. CHRISTLEY, J., of the Eleventh Appellate District, sitting for 
COOK, J. 
FOOTNOTE: 
 
 
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1. 
In addition to the commission’s decisions involving CEI’s 
Competitive Pilot Program, see Allnet Communications Serv., Inc. v. Pub. Util. 
Comm. (1994), 70 Ohio St.3d 202, 638 N.E.2d 516, in which competitive 
circumstances were recognized by the commission as justification for rate 
differentials.