Title: In re Complaint of Buckeye Energy Brokers v. Palmer Energy Co.

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as In 
re Complaint of Buckeye Energy Brokers v. Palmer Energy Co., Slip Opinion No. 2014-Ohio-
1532.] 
 
 
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. 2014-OHIO-1532 
IN RE COMPLAINT OF BUCKEYE ENERGY BROKERS, INC., APPELLANT, v. 
PALMER ENERGY COMPANY, INTERVENING APPELLEE; PUBLIC UTILITIES 
COMMISSION OF OHIO, APPELLEE. 
[Until this opinion appears in the Ohio Official Reports advance sheets,  
it may be cited as In re Complaint of Buckeye Energy Brokers v. Palmer 
Energy Co., Slip Opinion No. 2014-Ohio-1532.] 
Public Utilities Commission—Certification for providing competitive retail 
electric or natural-gas services—Standing for complaint against 
uncertified competitor. 
(No. 2012-0668—Submitted January 7, 2014—Decided April 15, 2014.) 
APPEAL from the Public Utilities Commission of Ohio, 
No. 10-693-GE-CSS. 
____________________ 
 
LANZINGER, J. 
SUMMARY 
{¶ 1} This is an appeal of an order of the Public Utilities Commission of 
Ohio that determined that intervening appellee, Palmer Energy Company, an 
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energy-management and consulting firm, did not violate R.C. 4928.08 and 
4929.20.  These provisions require any entity that intends to provide competitive 
retail service for electricity or natural gas to obtain a certificate to operate before 
providing that service.  R.C. 4928.08(B) (certification for competitive retail 
electric service) and 4929.20(A) (certification for competitive retail natural-gas 
service).  The laws are designed to ensure that companies are credible and capable 
of delivering the services they offer and to protect customers and incumbent 
distribution utilities from default.  R.C. 4928.08(B) and (C) and 4929.20(A) and 
(B). 
{¶ 2} Appellant, Buckeye Energy Brokers, Inc., a certified provider of 
competitive retail electric service and competitive retail natural-gas service, filed 
a complaint and an amended complaint with the commission against Palmer, 
which was one of its alleged competitors.  Buckeye alleged that Palmer had 
violated R.C. 4928.08 and 4929.20 by acting without a certificate as a broker in 
arranging for the supply of competitive retail electric and natural-gas services in 
Ohio. 
{¶ 3} The commission held that Buckeye failed to prove its allegations 
and specifically found that Palmer had provided services to its clients as a 
consultant—not as a broker. 
{¶ 4} Buckeye appealed to this court, raising six propositions of law.  
Because Buckeye has not demonstrated prejudice, as it must to obtain reversal of 
the order, we dismiss Buckeye’s appeal without reaching the merits. 
CASE BACKGROUND 
{¶ 5} R.C. 4928.08(B) provides: “No * * * electric services company * * * 
shall provide a competitive retail electric service to a consumer in this state * * * 
without first being certified by the public utilities commission * * *.”  Likewise, 
R.C. 4929.20(A) provides: “No * * * retail natural gas supplier shall provide a 
competitive retail natural gas service * * * to a consumer in this state without first 
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being certified by the public utilities commission * * *.”  The provisions require 
the entity seeking certification to demonstrate its “managerial, technical, and 
financial capability to provide that service” and also to provide a “financial 
guarantee” or “reasonable financial assurances” that are “sufficient to protect 
customers” and “electric distribution utilities” or “natural gas companies” from 
default. 
{¶ 6} Buckeye alleged that Palmer held itself out and acted as a broker in 
arranging for the supply of competitive retail services without obtaining the 
required certification.  Buckeye sought the following remedies from the 
commission: (1) rescission of Palmer’s contracts to provide competitive retail 
electric and natural-gas services, (2) restitution to customers receiving service 
under those contracts, and (3) forfeiture to the state for each violation.  See R.C. 
4928.16(B) and 4929.24(B). 
{¶ 7} Palmer answered the allegations, denying that it had violated R.C. 
4928.08 or 4929.20.  Palmer maintained that it was acting as a consultant and not 
as a broker that arranged for the supply of competitive services. Thus it was not 
required to become certified, because it was not providing competitive retail 
electric or natural-gas services in Ohio. 
{¶ 8} While the case was pending before the commission, Palmer filed 
applications to become certified under R.C. 4928.08 and 4929.20, which were 
granted in September 2010.  The commission therefore appropriately limited its 
review of Palmer’s conduct to the period before it became certified. 
{¶ 9} After an evidentiary hearing, the commission held that Buckeye had 
failed to prove that Palmer had arranged for the supply of competitive retail 
electric and natural-gas services before being certified.  The commission held that 
Palmer had provided services to clients as a consultant—not as a broker that 
arranged for the supply of competitive services. 
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{¶ 10} The commission interpreted the definitions of “electric services 
company” in R.C. 4928.01(A)(9)1 and “retail natural gas supplier” in R.C. 
4929.01(N).  They are similarly worded and provide that an entity falls under the 
applicable definition by being in “the business of supplying or arranging for the 
supply of” a competitive service.  In turn, the term “broker” is included in the 
statutory definitions of “electric services company” and “retail natural gas 
supplier.”  R.C. 4928.01(A)(9) (defining “electric services company” to include 
“power broker”) and 4929.01(N) (defining “retail natural gas supplier” to include 
“broker”). 
{¶ 11} Because no evidence was submitted that Palmer was involved in 
“supplying” gas or electricity, the commission focused its review on whether 
Palmer was engaged in the business of “arranging” for the supply of competitive 
retail services to consumers. 
{¶ 12} The commission first noted that the word “arranging” is not 
defined in R.C. Title 49 or the Ohio Adm.Code Chapter 4901 and that neither 
Buckeye nor Palmer offered a specific definition.  “For purposes of properly 
defining the term ‘arrange,’ ” the commission recognized that it had previously 
determined that an entity may operate as a consultant without being certified.  It 
then determined that “to be involved in ‘arranging’ for the supply of CRES 
[competitive retail electric service] or CRNGS [competitive retail natural-gas 
service], an entity must be engaged in activity that exceeds the level of 
involvement of a consultant.”  Pub. Util. Comm. No. 10-693-GE-CSS, 18 (Nov. 
1, 2011).  The commission did not define “consultant.”  Nor did it explain what 
activities would constitute performing as a consultant or describe the type of 
activities that would be deemed to go beyond consulting.  Instead, the commission 
reviewed the evidence to determine whether Palmer acted as a consultant or if its 
                                                 
1 The commission cited R.C. 4928.01(A)(27), which defines “retail electric service.”  Presumably 
the commission meant to refer to R.C. 4928.01(A)(9), which defines “electric services company.”   
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actions went beyond consulting and “constitute the performance of a competitive 
service.”  Id. 
{¶ 13} The commission reviewed the services that Palmer had provided to 
its clients, primarily certified government aggregators and local government 
entities seeking to operate as certified aggregators.2  The commission found that 
those services provided by Palmer for government clients were performed in the 
capacity of a consultant.  According to the commission, Palmer was not 
“arranging” for the supply of a competitive service under the applicable statutes 
when it assisted clients, because it did not engage in the “ultimate decision 
making process and enter[] into contractual obligations on behalf of its clients 
with respect to the provision of a competitive service.”  Id. at 18-19. 
{¶ 14} Buckeye timely applied for rehearing, which was denied.  Buckeye 
then filed this appeal challenging the commission’s orders. 
STANDARD OF REVIEW 
{¶ 15} “R.C. 4903.13 provides that a PUCO order shall be reversed, 
vacated, or modified by this court only when, upon consideration of the record, 
the court finds the order to be unlawful or unreasonable.”  Constellation 
NewEnergy, Inc. v. Pub. Util. Comm., 104 Ohio St.3d 530, 2004-Ohio-6767, 820 
N.E.2d 885, ¶ 50.  We will not reverse or modify a PUCO decision on questions 
of fact if the record contains sufficient probative evidence to show that the 
commission’s 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. 
                                                 
2 R.C. 4928.20(A) permits certain governmental authorities to “aggregate * * * the retail electrical 
loads located” within their jurisdictions and to “enter into service agreements to facilitate for those 
loads the sale and purchase of electricity.”  Such authorities are known as “governmental 
aggregators.”  R.C. 4928.01(A)(13).  The goal of aggregation is to form large buying groups with 
leverage to negotiate lower power rates with generators that compete with the utility.  Customers 
in aggregated communities still receive noncompetitive services, such as distribution service, from 
the local utility. 
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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. 
{¶ 16} Although the court has “complete and independent power of review 
as to all questions of law” in appeals from the PUCO, Ohio Edison Co. v. Pub. 
Util. Comm., 78 Ohio St.3d 466, 469, 678 N.E.2d 922 (1997), we may rely on the 
expertise of a state agency in interpreting a law when “highly specialized issues” 
are involved and when “agency expertise would, therefore, be of assistance in 
discerning the presumed intent of our General Assembly,” Consumers’ Counsel v. 
Pub. Util. Comm., 58 Ohio St.2d 108, 110, 388 N.E.2d 1370 (1979). 
DISCUSSION 
{¶ 17} Buckeye’s primary argument on appeal is that the commission 
construed the certification statutes too narrowly when it found that Palmer was 
not required to be certified under R.C. 4928.08(B) and 4929.20(A) because it was 
not engaged in the business of “arranging” for the supply of competitive services. 
Buckeye contends that “arranging” in R.C. 4928.01(A)(9) and 4929.01(N) means 
more than “engaging in the ultimate decision making process and entering into 
contractual obligations on behalf of its clients with respect to the provision of a 
competitive service.” 
I.  Buckeye has failed to show that the order has a prejudicial effect 
{¶ 18} The commission asserts that Buckeye’s appeal should be dismissed 
because Buckeye did not suffer any harm from the commission’s order and has 
failed to allege or identify any evidence that it was harmed by Palmer’s failure to 
become certified.  We agree. 
{¶ 19} It is well settled that this court will not reverse an order of the 
commission unless the party seeking reversal shows that it has been or will be 
harmed or prejudiced by the order.  Cincinnati v. Pub. Util. Comm., 151 Ohio St. 
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353, 86 N.E.2d 10 (1949), paragraph six of the syllabus; Holladay Corp. v. Pub. 
Util. Comm., 61 Ohio St.2d 335, 402 N.E.2d 1175 (1980), syllabus; Myers v. Pub. 
Util. Comm., 64 Ohio St.3d 299, 302, 595 N.E.2d 873 (1992); Ohio Consumers’ 
Counsel v. Pub. Util. Comm., 121 Ohio St.3d 362, 2009-Ohio-604, 904 N.E.2d 
853, ¶ 12.  In this appeal, there is nothing to show any harm or injury to Buckeye 
stemming from Palmer’s lack of certification.  Buckeye’s failure to demonstrate 
that it was prejudiced by the commission’s order is fatal to its appeal. 
II.  Buckeye’s counterarguments are not persuasive 
{¶ 20} Buckeye’s arguments do not have merit. 
{¶ 21} First, Buckeye argues that the commission cannot make this 
argument for the first time in this court, citing R.C. 4903.10 and cases interpreting 
that provision. Although R.C. 4903.10(B) bars us from considering issues that 
were not raised in an application for rehearing before the commission, In re 
Complaint of Reynoldsburg, 134 Ohio St.3d 29, 2012-Ohio-5270, 979 N.E.2d 
1229, ¶ 60, the statute does not bar the commission’s prejudice argument.  R.C. 
4903.10 applies only to parties who “urge * * * reversal, vacation, or 
modification” of a commission order and states, “No cause of action arising out of 
any order of the commission, other than in support of the order, shall accrue in 
any court to any person * * * unless such person * * * has made a proper 
application to the commission for a rehearing.”  The commission is defending the 
order on appeal, which is its role in every appeal from one of its orders.  See R.C. 
4903.13 (the proceeding to obtain reversal of a commission order “shall be by 
notice of appeal, filed * * * against the commission”); Consol. Rail Corp. v. Pub. 
Util. Comm., 40 Ohio St.3d 252, 254, 533 N.E.2d 317 (1988) (“In an appeal from 
an order of the Public Utilities Commission, the commission is ‘the appellee’ ”).  
Therefore, R.C. 4903.10(B) does not bar the commission’s claim of lack of 
prejudice. 
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{¶ 22} Second, Buckeye argues that it need not show harm attributable to 
Palmer’s alleged violations. Buckeye maintains that a violation of the certification 
statutes causes inherent harm and that the statutes themselves do not require any 
showing of harm or prejudice.  But the prejudice requirement stems from this 
court’s case law rather than the certification statutes.  Case law is clear that an 
allegedly aggrieved party must show that it suffered prejudice from a commission 
order to warrant reversal. 
{¶ 23} Third, Buckeye argues that it has shown a generalized harm based 
on Palmer’s failure to obtain certification.  According to Buckeye, the lack of 
certification meant that Palmer had failed to demonstrate its proficiency and 
financial stability, as the statutes require.  But even if this were true, a showing of 
generalized harm does not help Buckeye, because as the party seeking reversal, 
Buckeye must show harm to itself.  See Ohio Edison Co. v. Pub. Util. Comm., 173 
Ohio St. 478, 184 N.E.2d 70 (1962), paragraph ten of the syllabus; Ohio Contract 
Carriers Assn., Inc. v. Pub. Util. Comm., 140 Ohio St. 160, 42 N.E.2d 758 (1942), 
syllabus; Indus. Energy Consumers v. Pub. Util. Comm., 63 Ohio St.3d 551, 553, 
589 N.E.2d 1289 (1992). 
{¶ 24} Fourth, Buckeye argues that it suffered harm because it was 
competing against Palmer while being certified when Palmer was not.  According 
to Buckeye, this fact put Buckeye at a competitive disadvantage.  But these 
unsubstantiated statements are not enough to show prejudice.  There is no 
explanation or evidence as to how Palmer’s lack of certification adversely 
affected Buckeye competitively.  Buckeye bears the “burden of demonstrating 
* * * that it has been or will be prejudiced by the error.”  AK Steel Corp. v. Pub. 
Util. Comm., 95 Ohio St.3d 81, 88, 765 N.E.2d 862 (2002).  Buckeye, however, 
has failed to make an argument or draw our attention to any evidence that 
demonstrates error, let alone prejudicial error.  See, e.g., Allnet Communications 
Servs., Inc. v. Pub. Util. Comm., 70 Ohio St.3d 202, 206, 638 N.E.2d 516 (1994) 
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(rejecting argument because appellant “provided no further reasoning or record 
citations to support” it); Elyria Foundry Co. v. Pub. Util. Comm., 114 Ohio St.3d 
305, 2007-Ohio-4164, 871 N.E.2d 1176, ¶ 67 (rejecting claim that, “in addition to 
being speculative,” “is supported by no argument or evidence as to how the 
alleged [error] prejudices [appellant]”). 
CONCLUSION 
{¶ 25} This court “will not reverse an order of the commission absent a 
showing of prejudice by the party seeking reversal.”  Myers v. Pub. Util. Comm., 
64 Ohio St.3d at 302, 595 N.E.2d 873.  Buckeye has failed to show that it suffered 
prejudice or harm from the commission’s orders.  Therefore, we dismiss this 
appeal. 
Appeal dismissed. 
O’CONNOR, C.J., and PFEIFER, O’DONNELL, KENNEDY, FRENCH, and 
O’NEILL, JJ., concur. 
____________________ 
 
Day Ketterer, Ltd., Matthew Yackshaw, and John S. Kaminski, for 
appellant. 
 
Michael DeWine, Attorney General, William L. Wright, Section Chief, 
and Devin D. Parram and Thomas W. McNamee, Assistant Attorneys General, for 
appellee. 
 
Vorys, Sater, Seymour & Pease, L.L.P., M. Howard Petricoff, and Stephen 
M. Howard, for intervening appellee. 
_________________________