Title: Luntz Corp. v. Pub. Util. Comm.

State: ohio

Issuer: Ohio Supreme Court

Document:

LUNTZ CORPORATION, APPELLANT, v. PUBLIC UTILITIES COMMISSION OF OHIO ET 
AL., APPELLEES. 
[Cite as Luntz Corp. v. Pub. Util. Comm. (1997), 79 Ohio St.3d 509.] 
Public Utilities Commission — Electric utility has no affirmative duty or 
obligation to conduct an ongoing review of every customer’s usage and 
load-demand levels to ensure that every customer is being served under the 
most economical tariff possible — “Distribution line” in R.C. 4933.81, 
construed. 
(No. 96-962 — Submitted June 11, 1997 — Decided October 1, 1997.) 
APPEAL from the Public Utilities Commission of Ohio, No. 94-1783-EL-CSS. 
 
This appeal involves an order by the Public Utilities Commission of Ohio in 
a complaint case brought by Luntz Corporation (“Luntz”) against Ohio Edison 
Company for failing to disclose possible alternate rates under which Luntz might 
have been served from 1980 through 1991. 
 
Luntz is a family-run business that buys, processes and brokers scrap metal 
and sells it to steel mills and foundries.  Luntz has facilities located in several 
Ohio cities, including Warren.  Ohio Edison has provided electric service to 
Luntz’s Warren facility under a number of different tariffs since the mid-1970s. 
 
In 1981, Luntz contacted Ohio Edison about securing an adequate electric 
supply for a new hydraulic shear.  The shear used hydraulic pistons to power a 
guillotine-like blade to cut metal that did not fit into Luntz’s automobile shredder.  
Ohio Edison analyzed the electric demands and determined that the most 
economical way both to provide the necessary electric capacity to Luntz for the 
new shear and to avoid electrical interference to other customers near Luntz’s 
facility was for Luntz to construct a new substation and take service at the 23 kV 
transmission voltage.  After Luntz installed the substation and began taking 
 
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service at 23 kV, the flicker problem at a nearby restaurant was virtually 
eliminated (a voltage fluctuation was detectable with an ammeter, but no flicker 
could be visually observed). 
 
In 1991, Luntz hired a consultant to audit Luntz’s electric bills and to help 
Luntz reduce its power costs.  Shortly thereafter, Luntz contacted Ohio Edison 
with questions regarding Luntz’s electric-load demand.  Ohio Edison met with 
Luntz, provided Luntz with billing and usage information and power factor 
information, and ultimately reinstalled a magnetic tape meter at Luntz’s request in 
mid-1991. 
 
On November 4, 1994, pursuant to R.C. 4905.26, Luntz filed a complaint 
with the commission against Ohio Edison alleging that Ohio Edison had (1) 
erroneously and negligently advised Luntz that it was required to construct a 
substation and to enter into a new contract for electric service at Luntz’s Warren 
facility in order to increase the capacity at that facility and (2) concealed and 
misrepresented, from February 1980 to September 1991, the availability of tariffs 
that were less costly than the tariff under which Luntz was actually being served.  
Luntz raised no tariff-related issues regarding Ohio Edison’s service before 1980 
or after 1991. 
 
Luntz also alleged that Ohio Edison had wrongfully removed the magnetic 
tape meter from Luntz’s facility in 1986, which prevented Luntz from monitoring 
its power factor and on-peak/off-peak electrical demands, and prevented Luntz 
from receiving an off-peak discount. 
 
Ohio Edison filed an answer to the complaint, denying the substance of the 
complaint, setting forth various affirmative defenses, and asking that the 
complaint be dismissed.  An attorney examiner found that the complaint stated a 
 
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claim cognizable under R.C. 4905.26, and scheduled the matter for a hearing.  The 
case went to hearing in June 1995.  Rebuttal testimony was heard in August 1995. 
 
The commission found that Luntz had failed to meet its burden of proof.  
Luntz timely sought rehearing.  However, thirteen days later, Luntz filed an 
amended application for rehearing and a request for oral argument, raising new 
issues not addressed in Luntz’s original application for rehearing.  The 
commission disregarded the amended application for rehearing because it was 
filed beyond the thirty-day period required in R.C. 4903.13, and denied the claims 
raised in the application for rehearing. 
 
The cause is now before this court upon an appeal as of right. 
__________________ 
 
Steve J. Edwards, for appellant. 
 
Betty D. Montgomery, Attorney General, Duane W. Luckey and Johnlander 
Jackson-Forbes, Assistant Attorneys General, for appellee, Public Utilities 
Commission of Ohio. 
 
James W. Burk; Roetzel & Andress Co., L.P.A., and George W. Rooney, Jr., 
for intervening appellee, Ohio Edison Company. 
__________________ 
 
Per Curiam.  Appellant poses eight propositions of law, nearly all of which 
ask us to reweigh the evidence of record.  For the reasons that follow, we decline 
to do so and affirm the order of the commission below.1 
 
We will not reverse a commission order unless it is against the manifest 
weight of the evidence.  R.C. 4903.13.  Nor will we reweigh evidence or substitute 
our judgment for that of the commission on factual questions where there is 
sufficient probative evidence in the record to show that the commission’s decision 
is not manifestly against the weight of the evidence and is not so clearly 
 
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unsupported by the record as to show misapprehension, mistake, or willful 
disregard of duty.  Time Warner AxS v. Pub. Util. Comm. (1996), 75 Ohio St.3d 
229, 233, 661 N.E.2d 1097, 1101; Canton Storage & Transfer Co. v. Pub Util. 
Comm. (1995), 72 Ohio St.3d 1, 4, 647 N.E.2d 136, 140; Indus. Energy 
Consumers of Ohio Power Co. v. Pub. Util. Comm. (1994), 68 Ohio St.3d 547, 
554, 629 N.E.2d 414, 420.  However, we have complete and independent power of 
review as to all questions of law.  Id.; Indus. Energy Consumers of Ohio Power 
Co. v. Pub. Util. Comm. (1994), 68 Ohio St.3d 559, 563, 629 N.E.2d 423, 426. 
 
The instant appeal is based almost entirely upon factual arguments.  The 
commission’s decisions on these issues are all amply supported by record evidence 
and are not subject to reversal on that basis.  Id. 
 
Luntz raises only two issues that could be considered questions of law:  (1) 
whether Ohio Edison had a duty to inform Luntz of alternate rates and (2) whether 
the definition of the term “distribution line” in R.C. 4933.81 controls in the case at 
bar.  For the reasons that follow, we affirm the commission’s decision on each of 
these issues. 
 
The commission has considered alternate-rate arguments similar to those 
now posed by Luntz, and established a positive-inquiry standard regarding the 
availability of alternate customer rates.  White Plastics Co., Inc. v. Columbus & S. 
Ohio Elec. Co. (Sept. 25, 1984), Pub. Util. Comm. No. 83-650-EL-CSS, 
unreported. Under White Plastics and its progeny a utility has a duty “upon 
inquiry, to inform the customer about the existence and availability of an alternate 
rate.  However, it is not a requirement that a utility itself initiate regular reviews 
of a customer’s bills in order to determine if an alternate rate is more 
advantageous.  It is upon the inquiry of the customer that a company has a duty to 
disclose the availability of alternate rate schedules.”  (Emphasis added.)  N. Hill 
 
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Marble v. Ohio Edison Co. (Feb. 5, 1985), Pub. Util. Comm. No. 84-610-EL-CSS, 
unreported, at 2. 
 
Thus, a utility has no affirmative duty or obligation to conduct an ongoing 
review of every customer’s usage and load-demand levels to ensure that every 
customer is being served under the most economical tariff possible.  Id.  However, 
if a customer inquires about possible alternate rates, then the utility has a duty to 
disclose to the customer the availability of any applicable alternate-rate schedules.  
Id. 
 
We have not previously reviewed the propriety of the commission’s 
positive-inquiry standard.  We find that this policy is reasonable, striking a 
balance between a utility’s duty to serve its customers in a reasonable manner, 
where the utility lacks intimate knowledge about fluctuations in the customers’ 
day-to-day and future business operations, and its customers’ desire to be served 
under the most economical rate possible. 
 
Moreover, “long-standing administrative interpretations 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.  Yet the commission must, when 
appropriate, be willing to change its policies.  Consumers’ Counsel v. Pub. Util. 
Comm. (1984), 10 Ohio St.3d 49, 51, 10 OBR 312, 313, 461 N.E.2d 303, 304-305. 
 
Luntz made little effort to show that the commission should now require 
Ohio Edison to conduct ongoing reviews of the usage and load demands of each of 
its customers to determine whether those customers are being served on the most 
economical rate possible.  Absent proof that the positive-inquiry policy should be 
changed, the commission is bound to apply the standard in effect at the time it 
reviewed the matter in question.  Id. 
 
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Under the circumstances presently before us, we find that the commission 
properly refused to change its positive-inquiry standard in favor of the standard 
espoused by Luntz.  Thus, Ohio Edison had no affirmative duty to monitor Luntz’s 
usage and demand levels and notify Luntz that there may have been a more 
economical rate under which Luntz could be served. 
 
Luntz also argues that the definition of “distribution line” in R.C. 
4933.81(C) is binding in this case.  We disagree. 
 
R.C. 4933.81 of the Certified Territory Act defines the term “distribution 
line” as follows: 
 
“As used in sections 4933.81 to 4933.90 of the Revised Code:  
 
“* * * 
 
“(C)  ‘Distribution line’ means any electric line having a design voltage 
below thirty-five thousand volts phase to phase which is being or has been used 
primarily to provide electric service directly to electric load centers by the owner 
of such line.”  (Emphasis added.) 
 
The commission explained the limited application of this definition as 
follows: 
 
“The General Assembly in enacting that section and following sections of 
the Revised Code was determining utility boundaries using distribution lines.  In 
order to avoid the requirement that this Commission make an individual 
determination regarding whether a particular line functioned as a distribution line 
or a transmission line, the General Assembly defined 23 kV lines for the purpose 
of that statute as distribution lines.” 
 
We agree.  The bright-line definition used by the General Assembly was 
designed as an administrative convenience to reduce the number of individual 
power lines that the commission needed to consider in the mapping- and territory-
 
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certification process.  The General Assembly did not intend that this particular 
definition of “distribution line” create a bright-line test for any other purpose, and 
expressly limited its application to the Certified Territory Act. 
 
Luntz had the burden of proving its complaint against Ohio Edison.  
Grossman v. Pub. Util. Comm. (1966), 5 Ohio St.2d 189, 34 O.O.2d 347, 214 
N.E.2d 666; Ohio Bell Tel. Co. v. Pub. Util. Comm. (1984), 14 Ohio St.3d 49, 50, 
14 OBR 444, 445, 471 N.E.2d 475.  The commission considered the conflicting 
evidence regarding each aspect of Luntz’s claims against Ohio Edison and 
determined not only that Ohio Edison had acted reasonably during the complaint 
period, but also that Luntz had suffered no injury during the complaint period.  
Each of these findings is amply supported by record evidence.  Accordingly, we 
affirm the order of the commission below. 
Order affirmed. 
 
MOYER, C.J., RESNICK, F.E. SWEENEY, YOUNG and LUNDBERG STRATTON, 
JJ., concur. 
 
DOUGLAS, J., concurs in judgment only. 
 
PFEIFER, J., dissents and would reverse the commission’s order. 
 
FREDERICK N. YOUNG, J., of the Second Appellate District, sitting for Cook, 
J. 
FOOTNOTE: 
1. 
Luntz incorrectly named Ohio Edison as the appellee in its notice of appeal 
in this case.  However, an incorrect caption is not a jurisdictional defect under 
R.C. 4903.13.  Consol. Rail Corp. v. Pub. Util. Comm. (1988), 40 Ohio St.3d 252, 
533 N.E.2d 317.