Case Title: Grafton v. Ohio Edison Co.

Citation: 1996-Ohio-336

Docket Number: 19950572

State: ohio

Court: Ohio Supreme Court

Date: 1996-11-13T00:00:00Z

Document:
Village of Grafton, Appellee, v. Ohio Edison Company et al., Appellants. 
[Cite as Grafton v. Ohio Edison Co. (1996), ___ Ohio St.3d ___.] 
Municipal corporations -- Public utilities -- Interrelationship between the 
Miller Act, R.C. 4905.20 and 4905.21, the Certified Territory Act, R.C. 
4933.81 through 4933.90, and a municipality’s power to control 
utilities within municipal limits, Section 4, Article XVIII of the Ohio 
Constitution. 
 
(No. 95-572 -- Submitted May 1, 1996 -- Decided November 13, 1996.) 
 
APPEAL from the Court of Appeals for Lorain County, No. 94CA5877. 
 
On May 1, 1962, the village of Grafton granted the Ohio Edison Company a 
twenty-five-year, nonexclusive franchise to provide electric service to two 
commercial/industrial customers inside Grafton and to transport electrical energy 
through Grafton for use outside Grafton: 
 
“Section 1. Ohio Edison Company * * * is hereby granted, for a period of 
twenty-five (25) years from the date of the filing of its acceptance hereof * * * the 
right and privilege to erect, construct, operate and maintain electric facilities, 
including without limitation poles * * * and all necessary fixtures and 
appurtenances, in, along, [and] over * * * the streets, alleys, public ways and 
grounds of the Village of Grafton. 
 
2 
 
“Section 2. Ohio Edison Company may exercise the rights granted in 
Section 1 of this Ordinance only to the extent reasonably necessary for the purpose 
 
3 
of transmitting electric energy through the Village from points outside the 
corporate limits of the Village to other points outside said corporate limits, and for 
the purpose of supplying electrical energy to Sunshine Biscuits, Inc. Milling 
Division and W.O. Larson Foundry Co., or their successors and assigns. 
 
“* * * 
 
“Section 6. It is understood and agreed that the rights and privileges granted 
herein shall not be or be considered an exclusive grant and nothing in this 
ordinance shall in any way affect, restrict or abridge the rights of the Village of 
Grafton, at any time, to grant similar rights and privileges to any other person.” 
(Emphasis added.) 
 
In 1947, Grafton had granted Ohio Edison’s predecessor in interest a fifteen-
year franchise to maintain and operate an existing system for the transmission and 
distribution of electrical power, and to extend service to three specified customers.1  
These franchise agreements expired by their own terms in 1962 and 1987.  Ohio 
Edison did not seek to renew its limited franchises.   
 
Grafton provides electric service to its inhabitants through its own electric 
department.  Following expiration of the franchises, Ohio Edison still serves 
customers that it had served under the franchises, but has also initiated service to 
 
4 
two newly developed commercial properties, those of Design Management 
Company (“Design”) in 1992 and Rite Aid of Ohio, Inc. (“Rite Aid”) in 1993. 
Design and Rite Aid were not part of the limited franchises.  Ohio Edison ran 
separate service lines (including step-down transformers and other equipment) to 
Design and to Rite Aid from an existing Ohio Edison transmission line running 
within the Design and the Rite Aid properties.  The service lines to Design and Rite 
Aid do not cross Grafton’s public lands or rights-of-way.  Grafton has electric poles 
and lines capable of serving Design and Rite Aid on or near both properties.   
 
In 1992, Grafton brought an action for injunctive and declaratory relief and 
damages in the common pleas court relating to Ohio Edison’s construction of the 
new service lines and provision of electric service to Design and Rite Aid.  Ohio 
Edison filed a counterclaim against Grafton for tortious interference with business 
relations.  Grafton, Ohio Edison, Rite Aid, and Design each moved for summary 
judgment on the various claims and the counterclaims. 
 
The trial court found that Grafton could compel Ohio Edison to stop serving 
Design and Rite Aid because Ohio Edison had commenced service to these two 
customers after the expiration of the franchise agreement.  The trial court noted that 
Grafton would be required to seek permission from the Public Utilities Commission
 
5 
of Ohio to terminate Ohio Edison’s service to its pre-1987 customers, but held that 
Grafton need not make such an application in this case because Grafton was merely 
exercising its municipal utility authority under Section 4, Article XVIII of the Ohio 
Constitution.   
 
As to its declaratory judgment, the court determined that there was no just 
reason for delay.  Ohio Edison and Design appealed, arguing that Grafton could not 
stop Ohio Edison’s continued service to any of its customers, irrespective of when 
they began receiving that service, without first obtaining commission permission 
under the Miller Act.  The court of appeals disagreed, holding that the Miller Act 
did not apply in this case.   
 
The court of appeals based its decision on Toledo v. Pub. Util. Comm. (1939), 
135 Ohio St. 57, 62, 13 O.O. 329, 331, 19 N.E.2d 162, 164, in which this court held 
that the Miller Act did not create commission jurisdiction over the forced 
abandonment of a railroad “spur” or “side” track.  The track at issue in Toledo 
served only nine individual customers.  In Grafton, the court of appeals reasoned 
that, since the electric line at issue served only two customers, it was the equivalent 
of a “spur” or “side” track.  Further, the court of appeals held that, since the Miller 
 
6 
Act did not apply in the instant case, Grafton need not apply to the commission 
before compelling Ohio Edison to terminate service to Design and Rite Aid.   
 
The cause is now before this court upon the allowance of a motion to certify 
the record. 
 
 
 
 
 
 
Corso & Lillie Co., L.P.A., and Richard G. Lillie, for appellee. 
 
Jones, Day, Reavis & Pogue and David A. Kutik; Cook & Batista Co., L.P.A., 
and Daniel P. Batista, for appellants. 
 
Chester, Willcox, & Saxbe, John W. Bentine and Jeffrey L. Small, urging 
affirmance for amicus curiae American Municipal Power - Ohio. 
 
Robert S. Tongren, Consumers’ Counsel, and Barry Cohen, Assistant 
Consumers’ Counsel, urging reversal for amicus curiae Office of Consumers’ 
Counsel. 
 
Porter, Wright, Morris & Arthur, Samuel H. Porter, Alan D. Wright, 
Kathleen M. Trafford, Daniel R. Conway and Alaine Y. Miller, urging reversal for 
amicus curiae Ohio Electric Utility Institute. 
 
7 
 
Betty D. Montgomery, Attorney General, Duane W. Luckey and Ann E. 
Henkener, Assistant Attorneys General, urging reversal for amicus curiae Public 
Utilities Commission of Ohio. 
 
 
 
 
 
 
Per Curiam.  Appellants pose three propositions of law, arguing that the 
Miller Act prevents Grafton from terminating Ohio Edison’s service to Design and 
Rite Aid without commission approval.  For the reasons that follow, we hold that 
the Miller Act does not prevent Grafton from forcing Ohio Edison to abandon the 
Design and Rite Aid electric lines. 
 
In order to obtain summary judgment, the movant must show that (1) there is 
no genuine issue of material fact; (2) the moving party is entitled to judgment as a 
matter of law; and (3) it appears from the evidence that reasonable minds can come 
to but one conclusion when viewing evidence in favor of the nonmoving party, and 
that conclusion is adverse to the nonmoving party.  State ex rel. Cassels v. Dayton 
City School Dist. Bd. of Edn. (1994), 69 Ohio St.3d 217, 219, 631 N.E.2d 150, 152.  
This court has complete and independent power of review as to all questions of law.  
MCI Telecommunications Corp. v. Pub. Util. Comm. (1988), 38 Ohio St.3d 266, 
268, 527 N.E.2d 777, 780;  Indus. Energy Consumers of Ohio Power Co. v. Pub. 
 
8 
Util. Comm. (1994), 68 Ohio St.3d 559, 563, 629 N.E.2d 423, 426.  There are no 
questions of fact in the case now before us, as Ohio Edison acknowledges that it 
erected the service lines to Design and Rite Aid several years after its nonexclusive 
 
9 
franchise with Grafton had expired.  Thus, the determination of whether the trial 
court properly granted summary judgment below involves only questions of law 
and is considered on a de novo basis.  Id. 
 
This case involves the interrelationship between the Miller Act, R.C. 4905.20 
and 4905.21; the Certified Territory Act, R.C. 4933.81 through 4933.90; and a 
municipality’s power to control utilities within its municipal limits, Section 4, 
Article XVIII of the Ohio Constitution. 
 
Under Section 4, Article XVIII of the Ohio Constitution, Grafton had 
constitutional authority to build and operate a municipal utility to serve its 
inhabitants.  Wooster v. Graines (1990), 52 Ohio St.3d 180, 181, 556 N.E.2d 1163, 
1164.  This right is not generally subject to statutory restriction.  Lucas v. Lucas 
Local School Dist. (1982), 2 Ohio St.3d 13, 2 OBR 501, 442 N.E.2d 449;  
Columbus v. Pub. Util. Comm. (1979), 58 Ohio St.2d 427, 12 O.O.3d 361, 390 
N.E.2d 1201;  Columbus v. Ohio Power Siting Comm. (1979), 58 Ohio St.2d 435, 
12 O.O.3d 365, 390 N.E.2d 1208.   
 
However, municipal utility operations are subject to statewide police power 
limitations for health and safety reasons.  See Canton v. Whitman (1975), 44 Ohio 
St.2d 62, 73 O.O.2d 285, 337 N.E.2d 766; Delaware Cty. Bd. of Commrs. v. 
 
10 
Columbus (1986), 26 Ohio St.3d 179, 184, 26 OBR 154, 158-159, 497 N.E.2d 
1112, 1117;  Columbus v. Teater (1978), 53 Ohio St.2d 253, 260-261, 7 O.O.3d 
410, 414, 374 N.E.2d 154, 159.  Moreover, the Miller Act requires municipalities to 
obtain commission approval before forcing the abandonment of nonmunicipal 
utility facilities or the withdrawal of nonmunicipal utility services located inside the 
municipality.  State ex rel. Klapp v. Dayton Power & Light Co. (1967), 10 Ohio 
St.2d 14, 39 O.O.2d 9, 225 N.E.2d 230;  State ex rel. Wear v. Cincinnati & Lake 
Erie RR. Co. (1934), 128 Ohio St. 95, 190 N.E. 224.  Thus, under the Miller Act, a 
municipality generally must seek commission approval before forcing a utility to 
stop serving customers or to abandon its electric lines inside the municipal limits.  
Id. 
 
However, Grafton asserts that the Miller Act does not apply in this case 
because the Design and Rite Aid service lines are service lines for individual 
customers and not a “main” electric line and because Ohio Edison improperly 
initiated service to Design and Rite Aid after expiration of the nonexclusive 
franchise.  Grafton is correct only on the second ground.  We discussed Grafton’s 
first issue in detail in State ex rel. Toledo Edison v. Clyde (1996), 76 Ohio St.3d 
508, 668 N.E.2d 498, holding that the Miller Act applies to the forced abandonment 
 
11 
of or withdrawal of service over all electric lines, regardless of size.  However, for 
the reasons set forth below, we find that the Miller Act does not apply in this case 
because Ohio Edison wrongfully initiated service to Design and Rite Aid.  
 
The Miller Act focuses upon protecting existing utility customers from 
having their service terminated without commission approval.  E. Ohio Gas Co. v. 
Cleveland (1922), 106 Ohio St. 489, 508-509, 140 N.E. 410, 416.  This protection 
extends to situations where the utility franchise has expired (Lake Shore Elec. Ry. 
Co. v. State ex rel. Martin [1932], 125 Ohio St. 81, 180 N.E. 540) and even where 
the service was provided without any franchise contract (Wear, supra, 128 Ohio St. 
95, 190 N.E. 224).  However, the Miller Act does not create any right in a public 
utility to expand its customer base after its franchise expires to serve unknown, 
future customers inside a municipality that has created and is operating its own 
municipal utility.  State ex rel. Toledo Edison, supra, 76 Ohio St.3d at 517, 668 
N.E.2d at ___. 
 
Grafton argues that Ohio Edison’s extension of service to Design and Rite 
Aid was wrongful and violated Grafton’s exclusive right to provide utility service 
to its inhabitants.  Grafton is correct. 
 
12 
 
Ohio Edison was never granted a village-wide franchise to serve Grafton’s 
inhabitants.  From their inception, Ohio Edison’s franchises were limited to 
maintaining a transmission and distribution system within Grafton, to serving only 
specific customers (or their successors and assigns), and to transporting electricity 
through Grafton for use solely outside Grafton.  Thus, Ohio Edison had no right 
under its franchises to extend service to additional customers inside Grafton’s 
municipal limits, including service to Design or Rite Aid.  
 
Moreover, Grafton had the right to create a municipal utility monopoly inside 
Grafton and exclude Ohio Edison from serving Grafton’s inhabitants.  See State ex 
rel. Toledo Edison, supra, 76 Ohio St.3d at 517, 668 N.E.2d at ___.  This position 
stems from an exclusive grant of power to municipalities in Section 4, Article XVIII 
of the Ohio Constitution.  Id. at 516, 668 N.E.2d at ___, citing Lucas, supra, 2 Ohio 
St.3d at 16, 2 OBR at 504, 442 N.E.2d at 452.  This exclusive power is also 
recognized in the Certified Territory Act.  R.C. 4933.83(A) and 4933.87.  Thus, 
while Ohio Edison has the “exclusive right” to furnish electricity to the current and 
future customers inside its service territory, this right is expressly limited by 
Grafton’s right to require a franchise contract to serve its inhabitants.  R.C. 
 
13 
4933.83(A) and 4933.87.  See Legislative Service Analysis of 1977 Am. H.B. No. 
577, at 3. 
 
Ohio Edison’s franchises expired in 1962 and 1987.  Thus, Ohio Edison 
never had a right to serve any of Grafton’s inhabitants other than those specified in 
these franchises.  Ohio Edison never sought to renew or expand the scope of its 
Grafton franchises, and Grafton took no affirmative steps to prevent Ohio Edison 
from doing so.  However, Grafton was not required to do so.  The limited reach of 
the original franchises made it clear that service to any additional or new customers 
was beyond the scope of those franchises and wrongful.  Additionally, during this 
entire time frame Grafton was serving its inhabitants with its own utility.  That there 
had been narrowly drawn franchises does not prevent Grafton from stopping Ohio 
Edison from providing service to customers that Grafton never intended Ohio 
Edison to serve.2 
 
Ohio Edison was an occupant at sufferance inside Grafton’s municipal limits 
once the franchise contract expired.  State ex rel. Klapp v. Dayton Power & Light 
Co. (S.D. Ohio 1957), 170 F. Supp. 722, 725, affirmed in (C.A.6 1959), 263 F.2d 
909, reversed on other grounds (1959), 359 U.S. 552, 79 S.Ct. 115, 3 L.Ed.2d 1035.
 
14 
 
“Mere acquiescence in the continued unauthorized occupancy of the streets, 
or non-action on the part of public officials to prevent obstruction, or delay in 
bringing action to procure an order of ouster, could not serve to confer any right 
upon the defendant company or estop the city from maintaining this proceeding [for 
ouster].”  Ohio Elec. Power Co. v. State ex rel. Martin (1929), 121 Ohio St. 235, 
240, 167 N.E. 877, 878.   
 
Thus, although Ohio Edison’s right to continue serving customers that it 
served under its franchises is secure under the Miller Act, Ohio Edison’s right to 
serve new customers inside Grafton’s municipal boundaries certainly would not 
grow merely because Grafton took no affirmative steps to prevent such an 
expansion.  In State ex rel. Toledo Edison, supra, 76 Ohio St.3d 508, 668 N.E.2d 
498, we held that expansion of Toledo Edison’s customer base after expiration of a 
franchise was protected under the Miller Act until Clyde took affirmative action, by 
ordinance, to assert its right to control utility services.  But Toledo Edison had had a 
franchise to serve all of Clyde’s inhabitants.  By contrast, the expiration of narrowly 
drawn, specified-customer franchises, like the ones at bar, does not confer more 
rights on Ohio Edison than it had under the original franchises.3  Ohio Edison 
cannot intend to argue that the expiration of these franchises somehow imbued it 
 
15 
with rights to expand its service territory and serve new customers inside Grafton’s 
municipal limits that are superior to Grafton’s right to serve its citizens.   
 
Ohio Edison argues that it was required to provide service to Design and Rite 
Aid under the Certified Territory Act and R.C. 4905.22 after they requested service 
from Ohio Edison.  This argument is without merit.   
 
The Certified Territory Act expressly provides that Ohio Edison had no right 
to serve any customer inside Grafton’s municipal limits without Grafton’s consent: 
 
“Except as otherwise provided in this section and Article XVIII of the Ohio 
Constitution, each electric supplier shall have the exclusive right to furnish electric 
service to all electric load centers located presently or in the future within its 
certified territory, * * * provided that nothing in [the Certified Territory Act] shall 
impair the power of municipal corporations to require franchises or contracts for 
the provision of electric service within their boundaries * * *.”  (Emphasis added.)  
R.C. 4933.83(A). 
 
Ohio Edison knew that its franchises permitted service only to the individual 
customers identified in the franchises.  Design and Rite Aid are not the customers 
named in the franchises.  Nor did Ohio Edison seek or obtain Grafton’s consent to 
 
16 
provide service to Design or Rite Aid.  Under these circumstances, erection of the 
two service lines in question was not permitted under the franchises or the Certified 
Territory Act and was improper. 
 
Ohio Edison asserts that, irrespective of how the Design and Rite Aid service 
lines came into being, abandonment of the lines or termination of the service over 
those lines requires commission approval.  Thus, Ohio Edison poses the question of 
whether forcing the abandonment of two electric lines erected in violation of 
Grafton’s constitutional right to control the provision of electric services to its 
inhabitants requires commission approval.  We find that it does not. 
 
The Miller Act applies to the forced abandonment of any electric line or the 
service over that line.  State ex rel. Toledo Edison, supra, 76 Ohio St.3d at 515, 668 
N.E.2d at ___;  R.C. 4905.20 and 4905.21.  Yet a public utility should not be 
permitted knowingly to overreach the express terms of its franchise agreements to 
expand its service territory.  Nor should a public utility be allowed to knowingly 
violate a municipality’s right to exclusive control of utility services within the 
municipality, and then assert the protections of the Miller Act to prevent forced 
abandonment of the improperly erected service line or termination of the 
wrongfully instituted service.
 
17 
 
The Miller Act was enacted to protect consumers from having their service 
terminated because of the whims of a public utility or rogue municipality.  The Act 
was not created to protect overreaching public utilities from abandonment 
proceedings by aggrieved municipalities.  Under circumstances like the ones 
presently before us, we decline the opportunity to permit the protections of the 
Miller Act to be distorted into a weapon against municipalities. 
 
This policy is also reflected in R.C. 4933.16, which permits a municipality to 
use remedies in addition to those set forth in R.C. 4933.99, including injunction, to 
remedy violations of R.C. 4933.03, 4933.13, 4933.16, which prohibit placement of 
property of utilities within public rights-of-way without the consent of the 
municipality.  Although not directly applicable to the case at bar, the policy 
articulated in R.C. 4933.16 reflects that under certain circumstances, the Miller Act 
may not be the exclusive remedy for the forced abandonment of an electric line. 
 
We, therefore, hold that under the circumstances presently before us, the 
Miller Act does not apply and, therefore, that Grafton need not seek commission 
approval in order to force Ohio Edison to abandon the two electric service lines in 
question.  Accordingly, for the reasons set forth above, the decision of the court of 
appeals is affirmed.
 
18 
 
 
 
 
 
 
 
 
 
Judgment affirmed. 
 
MOYER, C.J., F.E. SWEENEY, PFEIFER, BRYANT and STRATTON, JJ., 
concur. 
 
DOUGLAS AND RESNICK, JJ., dissent. 
 
PEGGY BRYANT, J., of the Tenth Appellate District, sitting for COOK, J. 
 
DOUGLAS, J., dissenting.     I am compelled to dissent because the decision of 
the majority and some of its language cause me great concern.  I fear that the 
majority opinion starts this court and this state down a long and dangerous road 
with only disaster in sight.  When that occurs, recovery will likely be expensive, 
time-consuming and too late for consumers who are damaged in the process. 
I 
 
The majority makes at least three disturbing statements. 
A. 
 
“Grafton argues that Ohio Edison’s extension of service to Design and Rite 
Aid was wrongful and violated Grafton’s exclusive right to provide utility service to 
its inhabitants.  Grafton is correct.”  (Emphasis added.)  Thus, the majority says it 
agrees with Grafton that Grafton has the exclusive right as against all others to 
serve Grafton’s inhabitants.  “Exclusive” is defined as “[a]ppertaining to the subject 
alone, not including, admitting, or pertaining to any others.  Sole.  Shutting out; 
debarring from interference or participation; vested in one person alone.”  
 
19 
(Emphasis added.)  Black’s Law Dictionary (6 Ed.Rev. 1990) 564.  Accordingly, 
since Grafton has the “exclusive” right, the Miller Act never comes into play, and 
Ohio Edison can be ousted from Grafton without further pomp and circumstance. 
 
Can we be sure the majority really means this?  Apparently so. 
B. 
 
“Ohio Edison was an occupant at sufferance inside Grafton’s municipal 
limits once the franchise contract expired.”  An occupant is a person in possession.  
“Sufferance” is defined as “[t]oleration; negative permission by not forbidding; 
passive consent * * *.”  Black’s Law Dictionary (6 Ed.Rev. 1990) 1432.  Thus, an 
occupant at sufferance is one who occupies by toleration, not being forbidden by 
and with the consent of another with superior rights.  Accordingly, when Grafton 
decides to withdraw its consent, forbids, and ceases to tolerate Ohio Edison, then, 
without more, Ohio Edison is history in Grafton.  This could be so notwithstanding 
the Miller Act. 
C. 
 
“Nor should a public utility be allowed to knowingly violate a municipality’s 
right to exclusive control of utility services within the municipality, and then assert 
the protections of the Miller Act to prevent forced abandonment of the improperly 
 
20 
erected service line or termination of the wrongfully instituted service.”  (Emphasis 
added.)  If the majority’s statement were limited to the two customers in question, 
then that would be one thing and could be dealt with accordingly.  However, use of 
the words “exclusive control of utility services” when there is an existing investor-
owned utility provider gives, once again, Grafton the right to say, “Our sufferance 
is at an end” and order Ohio Edison to pack its bags -- as well as its poles, its lines, 
its transformers and its substations. 
 
This language of the majority in these three statements seems to be clear.  But 
then we find other language. 
D. 
 
“* * * Ohio Edison’s right to continue serving customers that it served under 
its franchises is secure under the Miller Act * * *.”  I agree, but how can Grafton’s 
rights to serve its inhabitants be “exclusive,” Ohio Edison be an “occupant at 
sufferance,” Grafton have the right to “exclusive control of utility services” and 
Ohio Edison have any rights at all if Grafton, under our opinion, decides to 
summarily terminate Ohio Edison? 
II 
 
21 
 
The facts of this case are simple.  Ohio Edison ran service lines to Design and 
Rite Aid from an existing Ohio Edison transmission line.  The service lines are all 
within private property.  The lines do not cross Grafton’s public lands or rights-of-
way.  There is no franchise permitting the lines in question nor is there any Grafton 
ordinance or other law prohibiting the stringing of the lines.4  Grafton does operate 
a municipal utility service.  Thus, the question becomes, does Ohio Edison have the 
right to run the lines in question and, if not, does Grafton have the right to have the 
service supplied summarily terminated or must Grafton involve the PUCO pursuant 
to the Miller Act? 
III 
 
I believe Ohio Edison had the right to run the lines in question and establish 
service to Design and Rite Aid if those consumers chose to use Ohio Edison’s 
service.  While Grafton had not specifically permitted the lines to be run, neither 
has it prohibited such activity -- even assuming, for purposes of argument, that 
Grafton does have such a right even on private property.  But that really is not what 
this case is about to me. 
IV 
 
22 
 
This case is about the fast-approaching issue of wheeling sales of electricity.  
And what the case is really about is choice.  Where there is an existing investor-
owned public utility and a competing municipal utility, who is going to choose what 
service a customer uses -- the customer or the government?  Today’s majority gives 
the consumer no choice if the government wants to decide for that consumer. 
 
Up front, I concede two points.  First, pursuant to Section 4, Article XVIII of 
the Ohio Constitution, Grafton had the authority to build and operate a municipal 
utility.  Second, if Grafton (under the constitutional provision) chooses to make its 
operation a monopoly, then it has the authority to do so by acquiring Ohio Edison’s 
plant, denying any further franchises to others, and prohibiting any person or entity 
from using streets and other rights-of-way in Grafton to supply electricity.  But 
what Grafton should not be able to do is to affirmatively or constructively terminate 
Ohio Edison’s right to serve its existing customers5 and any new customers that can 
be served without traversing Grafton’s rights-of-way. 
 
The interesting part of all of these cases is that an end result sought to be 
obtained by the PUCO is price reduction through competition.  However, the road 
we are going down simply replaces one monopoly -- an investor-owned utility6 -- 
with another monopoly owned and operated by government.  This seems curious, 
 
23 
given the order of the day which seems to be that those in charge of municipal 
governments want to privatize many municipal operations because the private 
sector can perform the service just as well or better than public employees and for 
less wages and fringe benefits.7  Today, when we flip the light switch, electricity 
flows.  Tomorrow when it does not, and the responsibility is that of a municipal 
utility which, incidentally, is not regulated by the PUCO and will not be a payer of 
tax, who will we blame? 
 
Fortunately, at least for now, the law is that under the provisions of the Miller 
Act, a utility operating within a municipality may not be ousted from the 
municipality without the consent of the PUCO.  This is true even after the 
expiration of a franchise agreement.  Lake Shore Elec. Ry. Co. v. State ex rel. 
Martin (1932), 125 Ohio St. 81, 180 N.E. 540.  Further, in State ex rel. Klapp v. 
Dayton Power & Light Co. (1967), 10 Ohio St.2d 14, 39 O.O.2d 9, 225 N.E.2d 230, 
we held that a municipality seeking to compel a privately owned public utility to 
abandon its service must apply to the PUCO even where the utility never had a 
valid franchise granting it the right to operate within the municipal corporation.8 
 
We should not now or ever be part of confiscation of private property without 
compensation whether that confiscation be actual or constructive. 
 
24 
IV 
 
There is so much more that could be and should be written in this case, but 
time and space do not permit.  I conclude for now with just saying I respectfully 
dissent. 
 
RESNICK, J., concurs in the foregoing dissenting opinion. 
 
 
25 
FOOTNOTES: 
4 
This fact alone clearly distinguishes State ex rel. Toledo Edison Co. v. Clyde 
(1996), 76 Ohio St.3d 508, 668 N.E.2d 498, a case heavily relied upon by the 
majority.  In Clyde, there was a municipal ordinance which spelled out Clyde’s 
intentions.  In fact, the Clyde opinion, in discussing Clyde’s own electric utility and 
Clyde’s intention to serve all new customers, states at least seven times that Clyde 
had declared its intent.  No such ordinance is referred to by the majority in the case 
now before us. 
5 
The majority makes the point that under the expired franchises, Ohio Edison 
had the right to serve only two customers within Grafton -- Sunshine Biscuits, Inc. 
Milling Division and W.O. Larson Founding Co.  The majority says that “* * * 
Ohio Edison never had a right to serve any of Grafton’s inhabitants other than those 
specified in these franchises.  Ohio Edison never sought to renew or expand the 
scope of its Grafton franchises, and Grafton took no affirmative steps to prevent 
Ohio Edison from doing so.”  The fact is, however, that if the affidavit of Charles E. 
Jones is believed, Ohio Edison currently serves forty-eight customers in Grafton, 
not just the original two listed in the franchise agreements.  Do we also have an 
estoppel issue? 
 
26 
6 
It is pertinent, I believe, to note that Ohio’s investor-owned electric utility 
companies serve nearly 4.5 million Ohio consumers, employ 23,500 Ohio workers 
in 2,000 communities, ensure the livelihood of 12,500 retirees, have more than 
150,000 Ohio investors, provide $1.1 billion in annual taxes supporting schools and 
local governments, and are the largest taxpayers in fifty-one of Ohio’s eighty-eight 
counties.  Each year, they purchase more than $1.7 billion in goods and services 
from Ohio suppliers, contribute millions in annual economic development funding 
and purchase 23 million tons of Ohio coal.  They have constructed 180,000 miles in 
transmission and distribution lines and have invested $32 billion in generating 
facilities.  They are major contributors to various charitable, educational and civic 
organizations both in money and volunteer-person hours. 
 
So there can be no question about my avoiding the issue, I once again lay on 
the record that two of my sons are part of the investor-owned utilities’ 23,500 
employees.  I do not, however, own stock in these or any other businesses.  
7 
Attached as an appendix is a column by Lee Leonard published in the 
Columbus Dispatch on September 9, 1996.  Mr. Leonard eloquently makes the 
point. 
 
27 
8 
It is interesting to note that in an attempt to respond to the major thrust of the 
dissent, the majority added fns. 2 and 3.  Much of this ignores, as of course it must, 
that no franchise has existed since 1962.  See majority fn. 1.  Rather than 
responding further to the majority, I will leave the opposing points of view to 
interested and knowledgeable readers. 
 
                                          
 
1  
On December 28, 1939, in Grafton Ordinance No. 320, Grafton granted the 
Marion-Reserve Power Company the right to maintain and operate a transmission 
and distribution system in Grafton for the sale, transmission, and distribution of 
electrical energy.  On April 22, 1947, Grafton repealed Ordinance No. 320 and 
enacted Ordinance No. 410.  Ordinance No. 410 granted the Ohio Public Service 
Company the right to maintain the existing Marion-Reserve Power Company 
distribution and transmission system within Grafton’s boundaries and the right to 
serve three specified customers.  Ordinance No. 410 expired in 1962. 
2 
The dissent states that other Grafton customers which were not mentioned in 
the Grafton franchises are also currently being served by Ohio Edison, and suggests 
that estoppel may be appropriate in this case.  The dissent is mistaken.  “Mere 
acquiescence in the continued unauthorized occupancy of the streets, or non-action 
 
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on the part of public officials to prevent obstruction, or delay in bringing action to 
procure an order of ouster, could not serve to confer any right upon the defendant 
company or estop the city from maintaining this proceeding [for ouster].” 
(Emphasis added.)  Ohio Elec. Power Co. v. State ex rel. Martin (1929), 121 Ohio 
St. 235, 240, 167 N.E. 877, 878. 
3 
The dissent suggests that Ohio Edison should be permitted to expand its 
utility services inside Grafton not only to Rite Aid and Design, but also to any other 
customer as long as Ohio Edison does not cross one of Grafton’s rights-of-way in 
providing the service.  This position grants Ohio Edison significantly more 
authority than it had under the franchises and essentially eliminates Grafton’s 
constitutional right to require a utility to enter into a contract with Grafton before 
providing utility service to Grafton’s inhabitants.