Title: Indus. Energy Consumers of Ohio Power Co. v. Pub. Util. Comm.

State: ohio

Issuer: Ohio Supreme Court

Document:

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Industrial Energy Consumers of Ohio Power Company et al.,                        
Appellants, v. Public Utilities Commission of Ohio et al.,                       
Appellees.                                                                       
[Cite as Indus. Energy Consumers of Ohio Power Co. v. Pub.                       
Util. Comm. (1994),    Ohio St.3d   .]                                           
Public Utilities Commission -- Electric utilities -- Acid                        
     rain control -- Commission's determination approving                        
     an environmental compliance plan affirmed, when.                            
     (No. 93-505 -- Submitted December 14, 1993 -- Decided                       
March 30, 1994.)                                                                 
     Appeal from the Public Utilities Commission of Ohio,                        
No. 92-790-EL-ECP.                                                               
     This case involves an order of the Public Utilities                         
Commission of Ohio ("commission"), appellee, approving an                        
environmental compliance plan under R.C. Chapter 4913.                           
For a complete understanding of the facts giving rise to                         
this appeal, a brief introduction to the state and federal                       
laws involved is necessary.                                                      
     R.C. Chapter 4913 was enacted by the General Assembly                       
in response to Title IV of the federal Clean Air Act                             
Amendments of 1990 ("CAAA"), Sections 7651, Title 42,                            
U.S.Code.  The purpose of the CAAA is to reduce the                              
adverse effects of acid deposition from the atmosphere by                        
controlling, among other things, emissions of sulfur                             
dioxide by electric utilities.  Section 7651(a) and (b).                         
     Compliance with the CAAA is to occur nationwide in                          
two phases.  In "Phase I," which begins in 1995, certain                         
identified electric utility generating plants (Phase I                           
affected units) must reduce annual emissions of sulfur                           
dioxide to specified levels.  Section 7651c.  In "Phase                          
II," which begins in the year 2000, most other electric                          
utility generating units must achieve reductions in sulfur                       
dioxide emissions.  Section 7651d.                                               
     One of the primary components of the CAAA is the                            
establishment of a system of emission "allowances" to                            
control the amount of sulfur dioxide emitted from affected                       
units on an annual basis.  See Section 7651b.  Each                              
emission "allowance" is a limited authorization allocated                        
to an affected unit to emit one ton of sulfur dioxide                            
during, or after, the calendar year in which the allowance                       
is issued.  Section 7651a(3).  Under the CAAA, Phase I                           
affected units are to be assigned annual allowances equal                        
to the number of authorized tons of sulfur dioxide                               
emissions.  See, generally, Section 7651b(a)(1).                                 
Beginning in the year 1995, a Phase I affected unit will                         
be required to have an emission allowance for each ton of                        
sulfur dioxide emitted from that facility.  See Section                          
7651c.  However, the CAAA provides that emission                                 
allowances may be transferred among the designated                               
representatives of the owners or operators of affected                           
sources and any other person who holds such allowances.                          
See Section 7651b(b).                                                            
     The CAAA does not specify which of a variety of                             
possible compliance options are to be employed by an                             
electric utility to achieve Phase I emission reductions.                         
That matter is apparently left for the utility to decide.                        
However, in simplest terms, a utility can meet the Phase I                       
requirements of the CAAA at any given Phase I affected                           
unit by reducing the amount of sulfur dioxide emitted                            
(through, for example, a switch to lower-sulfur coal or                          
natural gas, or by installing flue gas desulfurization                           
equipment, i.e., "scrubbers"), by acquiring additional                           
allowances, or by some combination of these compliance                           
strategies.  It is also possible for a utility to                                
essentially "overcomply" at one or more of its affected                          
units (by reducing emissions below the level necessary for                       
compliance) and save or "bank" any unused emission                               
allowances for use at other Phase I affected units.                              
     R.C. Chapter 4913 permits an electric light company                         
to seek commission review and approval of an environmental                       
compliance plan1 developed by the company to meet the                            
requirements of the CAAA at the company's Phase I affected                       
units.  R.C. 4913.02(A).  Pursuant to R.C. 4913.04(A), the                       
commission is required to approve a plan that is                                 
adequately documented if the commission makes all the                            
findings listed in R.C. 4913.04(A)(1) through (7),                               
including the finding set forth in R.C. 4913.04(A)(2) that                       
the plan constitutes "a reasonable and least-cost strategy                       
for compliance with the applicable acid rain control                             
requirements that is consistent with providing reliable,                         
efficient, and economical electric service."2  If the                            
commission does not make all the findings listed in R.C.                         
4913.04(A)(1) through (7), the commission must disapprove                        
the plan.  R.C. 4913.04(B).  If the commission approves                          
the plan of an electric light company that is a public                           
utility, the company's decision to implement a compliance                        
measure contained in the approved plan is deemed to                              
constitute a prudent management decision.  See R.C.                              
4909.157(A).3                                                                    
     On April 29, 1992, Ohio Power Company ("Ohio Power"),                       
appellee, a subsidiary of American Electric Power Company                        
("AEP"), submitted an application to the commission under                        
R.C. 4913.02 seeking review and approval of a least-cost                         
plan to comply with the Phase I requirements of the CAAA.                        
Ohio Power's environmental compliance plan was based upon                        
an AEP system-wide acid rain compliance report.4  In                             
accordance with that report, Ohio Power's plan called for                        
installing scrubbers at Gavin Units 1 and 2, switching to                        
lower-sulfur coal at four other Phase I affected units                           
(Kammer Units 1-3 and Muskingum Unit 5), and continuing to                       
burn existing coal supplies at Ohio Power's seven                                
remaining Phase I affected units (Cardinal Unit 1,                               
Muskingum Units 1-4, and Mitchell Units 1 and 2).  Under                         
the plan, any compliance action to be taken at Cardinal                          
Unit 1 and Muskingum Units 1-4 was to be deferred until                          
Phase II, at which time Cardinal Unit 1 was to be                                
"fuel-switched" from high-sulfur coal to low-sulfur coal                         
and Muskingum Units 1-4 were to be fuel-switched from coal                       
to natural gas.5                                                                 
     Ohio Power's plan was supported by a number of case                         
studies offered to show that the plan was the least-cost                         
strategy for Phase I compliance when viewed in the context                       
of the overall AEP system-wide plan.  The studies                                
evaluated two principal compliance strategies for the                            
Gavin power plant, with each study assuming a Phase I                            
fuel-switch at Muskingum Unit 5 and Kammer Units 1-3 as                          
proposed in Ohio Power's plan.  The case studies projected                       
the effects on AEP's revenue requirements if Gavin was                           
fuel-switched from high-sulfur to low-sulfur coal (Case 1)                       
or retrofitted with scrubbers (Case 2); evaluated the                            
effects of escalating fuel prices on these options (Case                         
1S and 2S); and examined compliance through the sale of                          
allowances (Case 3).  The studies revealed that, in the                          
long run, installing scrubbers at Gavin, as opposed to a                         
Gavin fuel-switch, was the least-cost alternative for                            
Phase I compliance.                                                              
     At a hearing conducted on Ohio Power's plan,                                
appellant Sierra Club offered evidence to show that a                            
least-cost compliance plan would have included, as an                            
additional compliance measure, a Phase I fuel-switch at                          
Cardinal Unit 1.  Similarly, the commission's staff                              
suggested that a fuel-switch at Cardinal Unit 1 and                              
Muskingum Units 1-4 at the beginning of Phase I may                              
constitute additional cost-effective measures to be                              
included in Ohio Power's plan.  However, commission staff                        
witness Carl R. Evans concluded that Ohio Power's plan to                        
install scrubbers at Gavin and to fuel-switch Muskingum                          
Unit 5 would constitute part of any least-cost compliance                        
plan.                                                                            
     On rebuttal, Ohio Power offered additional case                             
studies to address the concerns of the commission's staff                        
that an accelerated fuel-switch at Cardinal Unit 1 and                           
Muskingum Units 1-4 could result in an even lower-cost                           
compliance plan.  Case 1E identified the effects of these                        
additional compliance measures on the Gavin fuel-switch                          
(Case 1) scenario.  Case 2E identified the effects of a                          
Phase I fuel-switch at Cardinal Unit 1 and Muskingum Units                       
1-4 on the Gavin-scrubber (Case 2) scenario.  The studies                        
revealed that a fuel-switch at Cardinal Unit 1 and                               
Muskingum Units 1-4 at the beginning of Phase I might, in                        
the long run, moderately reduce AEP revenue requirements                         
under the Gavin fuel-switch and Gavin-scrubber cases.                            
However, the studies confirmed that installing scrubbers                         
at Gavin was the least-cost alternative for Phase I                              
compliance whether Cardinal Unit 1 and Muskingum Units 1-4                       
were fuel-switched in Phase I or Phase II.                                       
     Ohio Power's witness, Henry W. Fayne, urged that the                        
company's compliance strategy should not be changed to                           
include a fuel-switch at Cardinal Unit 1 and Muskingum                           
Units 1-4 in Phase I.  Fayne testified that there were                           
increased risks and uncertainties associated with an                             
earlier fuel-switch at these facilities, and that an                             
earlier fuel-switch would necessitate closure of                                 
company-affiliated mines, resulting in the loss of a                             
significant number of Ohio jobs.  Moreover, Fayne                                
testified that Ohio Power would already be overcomplying                         
with the federal law in Phase I and, therefore, additional                       
Phase I compliance strategies were unnecessary for Ohio                          
Power.  Fayne also cautioned that according to company                           
studies, a Phase I fuel-switch at Cardinal Unit 1 and                            
Muskingum Units 1-4 would not necessarily be less costly                         
for Ohio Power customers.                                                        
     During the pendency of the case, a stipulation was                          
entered into in a companion electric fuel component case,                        
which stipulation has been challenged on appeal.  See                            
Indus. Energy Consumers of Ohio Power Co. v. Pub. Util.                          
Comm. (1994),    Ohio St.3d    ,     N.E.2d    .  This                           
stipulation, among other things, set a predetermined price                       
for calculating Ohio Power's electric fuel component rate                        
for all coal burned at Gavin, Muskingum, Mitchell and                            
Cardinal for a three-year period; set a "station cap" for                        
the cost of coal burned at Gavin; and "capped" the costs                         
for which Ohio Power could seek recovery in connection                           
with the installation of scrubbers at Gavin.  As a result                        
of this stipulation, a further case study was generated to                       
show the effect of the stipulation on Ohio Power's plan.                         
That study (Case 2CS) showed that the stipulation would                          
further reduce AEP revenue requirements in the Case 2                            
scenario, making the installation of scrubbers at Gavin an                       
even more cost-effective compliance option.  However, Case                       
2CS was merely a variation of Case 2 and, thus, it also                          
assumed that Cardinal Unit 1 and Muskingum Units 1-4 would                       
be fuel-switched at the beginning of Phase II.                                   
     In an order dated November 25, 1992, the commission                         
found that Ohio Power's environmental compliance plan                            
which incorporated the effects of the stipulation in the                         
electric fuel component proceeding -- Case 2CS -- was a                          
reasonable and least-cost strategy for compliance with the                       
CAAA.  The commission determined that the next least-cost                        
strategy was represented in Case 2, which study also                             
assumed that Gavin would be retrofitted with scrubbers.                          
Additionally, the commission found that a Phase I                                
fuel-switch at Cardinal Unit 1, if carried out, would                            
constitute a further "least-cost measure" to be undertaken                       
by Ohio Power.  In this regard, the commission suggested                         
that Ohio Power prepare to fuel-switch Cardinal Unit 1 in                        
Phase I, and that Ohio Power designate Conesville Unit 4                         
(another AEP Phase I affected unit) and Muskingum Units                          
1-4 as "transfer units."  The commission found that Ohio                         
Power's plan was adequately documented, and specifically                         
determined that all seven factors listed in R.C.                                 
4913.04(A) had been satisfied.  However, the commission's                        
order was unclear as to whether Ohio Power's plan had been                       
approved as filed, or whether the plan had been modified                         
by a required Phase I fuel-switch at Cardinal.                                   
     Industrial Energy Consumers of Ohio Power Company                           
("IEC") and the Sierra Club, appellants, applied for                             
rehearing.  In an entry denying rehearing, the commission                        
stated that Ohio Power's plan had been approved as filed,                        
and that the commission had only "strongly suggested" that                       
Ohio Power take steps to have Cardinal available for                             
fuel-switching in Phase I while designating Conesville                           
Unit 4 and Muskingum Units 1-4 as transfer units.  The                           
commission also stated that it would expect Ohio Power in                        
subsequent fuel cases "to demonstrate a reduced revenue                          
requirement at least equal to the total revenue                                  
requirement benefit identified in this case resulting from                       
a Cardinal fuel switch * * *."                                                   
     The cause is now before this court upon an appeal as                        
of right.                                                                        
                                                                                 
     Emens, Kegler, Brown, Hill & Ritter, Samuel C.                              
Randazzo, Richard P. Rosenberry and Denise C. Clayton, for                       
appellant Industrial Energy Consumers of the Ohio Power                          
Company.                                                                         
     Hahn, Loeser & Parks, Janine L. Migden and Maureen R.                       
Grady, for intervening appellant Sierra Club.                                    
     Lee Fisher, Attorney General, James B. Gainer, Thomas                       
W. McNamee and Craig S. Myers, Assistant Attorneys                               
General, for appellee commission.                                                
     Edward J. Brady, Kevin F. Duffy and Richard Cohen,                          
for intervening appellee Ohio Power Company.                                     
                                                                                 
     Douglas, J.    The primary issue which has been                             
properly raised in this appeal is whether the commission                         
approved an environmental compliance plan that was not                           
least-cost, thereby constituting a violation of R.C.                             
4913.04.  For the reasons that follow, we decline to                             
disturb the commission's determination approving Ohio                            
Power's plan.  Accordingly, we affirm the commission's                           
order.                                                                           
                             I                                                   
     To begin our discussion, we note that this court is                         
ordinarily called upon to review commission decisions                            
involving ratemaking.  Although the case before us                               
obviously affects rates (as is true with virtually                               
everything the commission does), we are confronted here                          
with a decision of the commission which ventures into the                        
field of policymaking concerning the best and least-cost                         
way for a utility to comply with the CAAA.  While the                            
standard of review remains the same (to wit:  the                                
"unlawful or unreasonable" standard specified in R.C.                            
4903.13), we nevertheless recognize that in reviewing such                       
determinations, we are being called upon not only to                             
review the lawfulness of the commission's order, but also                        
to review its wisdom in reaching its conclusions.  Because                       
such a review could tend to also place this court in the                         
policymaking arena, we continue our policy of not                                
second-guessing the commission in its fundamental                                
determinations which are not unlawful or unreasonable.  We                       
are cognizant of the fact that our decision in this case                         
has significant implications concerning the continued                            
viability of Ohio's high-sulfur coal mining industry, but                        
our judgment is based strictly on the CAAA and the                               
commission's prerogatives in approving a least-cost                              
environmental compliance plan which satisfies the                                
requirements of the federal law.                                                 
                            II                                                   
     Ohio Power's environmental compliance plan was                              
submitted to the commission for review and approval in the                       
context of the overall AEP system-wide compliance plan.                          
While we recognize that this was necessary for purposes of                       
evaluating the Ohio Power plan, it is important to realize                       
that only Ohio Power's plan for compliance with the CAAA                         
is at issue in this case.  The commission's order and the                        
arguments of the parties, both for and against the                               
commission's ultimate determination, are less than a model                       
of clarity, but that may be driven by the fact that the                          
information being reviewed, the federal and state laws and                       
the reports, studies and expert testimony, is voluminous                         
and very technical.  Nevertheless, it is apparent to us                          
what the commission sought to do in this case, and we find                       
that the commission's order is neither unlawful nor                              
unreasonable.                                                                    
                            III                                                  
     Pursuant to R.C. 4913.04(A), the commission was                             
required to make a number of findings in approving Ohio                          
Power's plan.  The specific commission finding, around                           
which the present controversy swirls, is that Ohio Power's                       
plan constitutes a reasonable and least-cost strategy for                        
compliance with the Phase I acid rain control requirements                       
of the CAAA.  R.C. 4913.04(A) provides, in pertinent part:                       
     "[T]he public utilities commission shall issue an                           
order approving a proposed environmental compliance plan                         
submitted by an electric light company under section                             
4913.02 of the Revised Code, and the estimated costs of                          
and schedule for implementing the plan, only if the                              
commission finds that the plan is adequately documented                          
and makes all of the following findings regarding the plan:                      
     "* * *                                                                      
     "(2)  The plan constitutes a reasonable and                                 
least-cost strategy for compliance with the applicable * *                       
* [Phase I acid rain control requirements of the CAAA]                           
that is consistent with providing reliable, efficient, and                       
economical electric service.  Least-cost shall be measured                       
over the period of both the Phase I and Phase II acid rain                       
control requirements under * * * [the CAAA]."                                    
     By far the most significant issue litigated at the                          
commission level involved the question whether it would be                       
more cost effective to fuel-switch or to install scrubbers                       
at Ohio Power's Gavin plant.  The Gavin power plant is the                       
single largest emitter of sulfur dioxide in the entire AEP                       
system and represents a significant portion of the AEP                           
system capacity.  For this reason, among others, the Phase                       
I compliance action to be taken at Gavin was the                                 
cornerstone of the AEP system-wide acid rain compliance                          
plan upon which Ohio Power's plan was based.                                     
     In a detailed and comprehensive decision, the                               
commission determined that Ohio Power's plan to install                          
scrubbers at Gavin was the least-cost alternative for                            
Phase I compliance.  Under the applicable standard of                            
review, we will not reverse the commission's decision as                         
to questions of fact where sufficient probative evidence                         
is contained in the record to show that the commission's                         
decision is not manifestly against the weight of the                             
evidence and is not so clearly unsupported by the record                         
as to show misapprehension, mistake, or willful disregard                        
of duty.  See MCI Telecommunications Corp. v. Pub. Util.                         
Comm. (1988), 38 Ohio St.3d 266, 268, 527 N.E.2d 777, 780.                       
     Ohio Power's case studies showed that on an                                 
eighteen-year net present value basis, AEP's revenue                             
requirements under the plan to install scrubbers at Gavin                        
(Case 2) was an estimated $121 million less than the                             
estimated revenue requirements for the Gavin fuel-switch                         
(Case 1) alternative.  Further, if low-sulfur coal costs                         
were to escalate more rapidly, and high-sulfur coal more                         
slowly, than was assumed in Cases 1 and 2, the estimated                         
revenue requirements under the Gavin-scrubber plan were                          
shown to be $244 million less than the Gavin fuel-switch                         
alternative (Case 1S compared to Case 2S).  Moreover, when                       
Ohio Power's plan was considered in light of the                                 
stipulation entered into in the electric fuel component                          
proceeding (Case 2CS), installing scrubbers at Gavin was                         
shown to be an even less costly compliance measure than                          
had been projected in Case 2.  This evidence and more                            
contained in the record supports the commission's factual                        
determination under R.C. 4913.04(A)(2) that Ohio Power's                         
proposal to install scrubbers at Gavin was an integral                           
part of a reasonable and least-cost plan for Phase I                             
compliance.                                                                      
     Nevertheless, appellants contend that the evidence in                       
this case establishes that had Ohio Power's plan also                            
included a Phase I fuel-switch at Cardinal Unit 1 and                            
Muskingum Units 1-4, that plan would further reduce                              
compliance costs for the AEP system.  On this basis,                             
appellants urge that the commission's finding under R.C.                         
4913.04(A)(2) was unlawful since the plan approved by the                        
commission did not provide for a Phase I fuel-switch at                          
Cardinal Unit 1 and Muskingum Units 1-4 and, thus, the                           
plan did not constitute the least-cost compliance                                
strategy.  Our response to appellants' arguments is                              
threefold.                                                                       
     First, R.C. 4913.04(A)(2) requires a finding that an                        
environmental compliance plan constitutes a reasonable and                       
least-cost strategy for compliance with the Phase I acid                         
rain control requirements of the CAAA.  The evidence in                          
this case is in conflict as to the reasonableness of                             
requiring a fuel-switch at Cardinal Unit 1 and Muskingum                         
Units 1-4 in Phase I.  The evidence shows that such                              
additional compliance strategies are unnecessary for Ohio                        
Power, which will already be substantially overcomplying                         
with the applicable federal mandates in Phase I.  Further,                       
a question remains as to whether a Phase I fuel-switch at                        
these facilities would, in fact, be a least-cost strategy                        
for Ohio Power.  The commission chose not to disturb the                         
company's decision to delay compliance action at these                           
facilities.  As in rate cases, it is not our job to                              
question the wisdom of the commission on matters such as                         
this, where the commission has made a determination on a                         
fairly debatable issue within its expertise and                                  
understanding.  See, generally, AT&T Communications of                           
Ohio, Inc. v. Pub. Util. Comm. (1990), 51 Ohio St.3d 150,                        
154, 555 N.E.2d 288, 292-293.                                                    
     Second, we are extremely skeptical of an                                    
interpretation of R.C. 4913.04(A)(2) that would make                             
commission approval of an environmental compliance plan                          
contingent upon the company's having proposed to undertake                       
every cost-efficient compliance action possible,                                 
regardless whether such action is necessary for the                              
company to achieve compliance with the CAAA.  In our                             
judgment, the question to be answered under R.C.                                 
4913.04(A)(2) is whether the compliance measures chosen by                       
the company are the least-cost measures to bring the                             
company into Phase I compliance.  For the commission or                          
this court to interpret R.C. 4913.04(A)(2) as requiring                          
disapproval of a plan that satisfies the minimum                                 
requirements of the federal law in a least-cost manner, on                       
the basis that it may be more cost-efficient for the                             
company to take additional compliance action during Phase                        
I, would be to subject those affected by the CAAA to even                        
more burdensome requirements than have already been                              
exacted by virtue of the federal law.  In the case at bar,                       
the record is clear that Ohio Power will be able to                              
achieve compliance with the applicable federal mandates by                       
installing scrubbers at Gavin alone.  As we have                                 
indicated, the commission's finding that installing                              
scrubbers at Gavin is a reasonable and least-cost                                
compliance strategy is a factual determination which we                          
will not disturb, given the standard by which such a                             
determination must be judged.                                                    
     Third, and finally, even if we were to assume that                          
the commission erred in approving the plan because of the                        
Cardinal/Muskingum fuel-switch controversy, we would                             
nevertheless find that appellants have not been prejudiced                       
by the commission's decision.  In its order, the                                 
commission apparently considered Ohio Power's proposal to                        
delay the fuel-switch at Cardinal Unit 1 and Muskingum                           
Units 1-4 as a "scheduling" issue involving implementation                       
of the plan.  The commission apparently sought to approve                        
Ohio Power's plan to fuel-switch Cardinal Unit 1 and                             
Muskingum Units 1-4, but to defer final judgment on the                          
scheduling/timing of the fuel-switch at these facilities.                        
In this regard, counsel for the commission has suggested                         
that Ohio Power's plan to delay compliance action at                             
Cardinal Unit 1 and Muskingum Units 1-4 may be considered                        
by the commission in its two-year review of the plan under                       
R.C. 4913.05.  Counsel for the commission also suggests                          
that since Ohio Power could achieve Phase I emission                             
reductions by installing scrubbers at Gavin alone, the                           
R.C. 4909.157(A) "prudence" protection associated with                           
commission approval of an environmental compliance plan                          
does not extend to Ohio Power's decision to delay a                              
fuel-switch at Cardinal Unit 1 and Muskingum Units 1-4.                          
     In its brief, Ohio Power argues, among other things,                        
that since a Phase I fuel-switch at Cardinal Unit 1 and                          
Muskingum Units 1-4 is unnecessary for Ohio Power to meet                        
the Phase I requirements of the CAAA, such compliance                            
measures were arguably beyond the proper scope of the                            
commission's inquiry in this case.  Thus, Ohio Power                             
apparently agrees that the commission's approval of the                          
plan did not extend any protections to Ohio Power with                           
respect to the company's proposal to delay compliance                            
action at Cardinal Unit 1 and Muskingum Units 1-4.  Ohio                         
Power's position on this issue was further clarified at                          
oral argument, where Ohio Power conceded that it will be                         
willing to do whatever the commission requests at the                            
two-year review of the plan which is shown to be prudent                         
and least-cost with respect to the implementation of                             
compliance measures at Cardinal Unit 1 and Muskingum Units                       
1-4.                                                                             
     Under these circumstances, even if we were to                               
conclude that Ohio Power's plan was not least-cost, we                           
would nevertheless find that appellants have not been                            
harmed by the commission's approval of the plan.  At the                         
R.C. 4913.05 review, appellants will be able to voice                            
their concerns regarding the scheduling/implementation of                        
the fuel-switch at Cardinal Unit 1 and Muskingum Units                           
1-4.  Additionally, we note that in its entry denying                            
rehearing, the commission "strongly suggested" that Ohio                         
Power prepare to fuel-switch Cardinal Unit 1 in Phase I                          
while designating Muskingum Units 1-4 as transfer units.                         
The commission has indicated, in no uncertain terms, that                        
it intends to enforce compliance with its order to ensure                        
cost-effective implementation of the plan.  With                                 
mechanisms peculiar to and within its control, the                               
commission will almost certainly be able to make its                             
"suggestions" much more than that.                                               
                            IV                                                   
     Appellants also challenge the commission's finding                          
that Ohio Power's plan was adequately documented.                                
However, we find that the record does not support                                
appellants' contentions.  Although the plan may not have                         
been documented to the degree appellants would have                              
preferred, we have no quarrel with the commission in this                        
regard.  Appellants also contend that the commission erred                       
in failing to address certain issues raised in their                             
application for rehearing.  However, on the basis of the                         
record before us, we are unable to conclude that the                             
commission's decision would have been any different had                          
the arguments raised by appellants been addressed.                               
Appellants also suggest that the commission's decision                           
must be reversed if the stipulation at issue in Indus.                           
Energy Consumers of Ohio Power Co. v. Pub. Util. Comm.                           
(1994),    Ohio St.3d    ,     N.E.2d    , is found to be                        
unlawful.  However, in that case, we upheld the validity                         
of the stipulation.                                                              
     Appellant IEC further challenges the commission's                           
decision, claiming that Ohio Power and/or the commission                         
unlawfully modified the proposed plan.  We find no support                       
for this proposition in the record.  Ohio Power's plan                           
called for installing scrubbers at Gavin, switching to                           
lower-sulfur coal at Muskingum Unit 5 and Kammer Units                           
1-3, and continuing to burn existing fuel supplies at Ohio                       
Power's remaining Phase I affected units.  The plan                              
proposed by Ohio Power was based upon the AEP system-wide                        
compliance strategy which included provisions for a Phase                        
II fuel-switch at Cardinal Unit 1 and Muskingum Units                            
1-4.  Throughout the entire proceeding, Ohio Power's                             
compliance strategy remained unchanged.  Thus, no                                
modification occurred.  Additionally, with regard to the                         
commission's alleged modification of the plan, the                               
commission specifically stated in its entry denying                              
rehearing that Ohio Power's plan had been approved as                            
filed.  Furthermore, even if the commission did modify the                       
plan by requiring a Phase I fuel-switch at Cardinal Unit                         
1, that is precisely what IEC has suggested would have                           
resulted in a least-cost plan.  Thus, IEC would not have                         
been prejudiced by the alleged modification.                                     
     Finally, appellants raise a number of arguments                             
concerning the constitutionality of Am.Sub.S.B. No. 143,                         
144 Ohio Laws, Part I, 817, the legislation which enacted,                       
inter alia, R.C. Chapter 4913.  Appellants claim that                            
Am.Sub.S.B. No. 143, through its various provisions,                             
creates a preference for Ohio high-sulfur coal,                                  
discriminates against out-of-state low-sulfur coal                               
suppliers, and, thus, violates the Commerce Clause of the                        
United States Constitution.  However, we find that                               
appellants lack standing to challenge the                                        
constitutionality of this legislation.                                           
     In Palazzi v. Estate of Gardner (1987), 32 Ohio St.3d                       
169, 512 N.E.2d 971, syllabus, this court held that:                             
     "The constitutionality of a state statute may not be                        
brought into question by one who is not within the class                         
against whom the operation of the statute is alleged to                          
have been unconstitutionally applied and who has not been                        
injured by its alleged unconstitutional provision."                              
     The class against whom Am.Sub.S.B. No. 143 is alleged                       
to be unconstitutionally applied is out-of-state coal                            
suppliers.  Appellants are not members of that class.                            
Moreover, appellants have failed to demonstrate, to our                          
satisfaction, that they have been injured by the                                 
provisions of the legislation which are alleged to be                            
unconstitutional.  Insofar as appellants lack standing to                        
challenge the constitutionality of Am.Sub.S.B. No. 143, it                       
would be wholly inappropriate at this time to make any                           
further comment on the issue.                                                    
                             V                                                   
     For the foregoing reasons, we affirm the commission's                       
order approving Ohio Power's environmental compliance plan.                      
         Order affirmed.                                                         
     Moyer, C.J., A.W. Sweeney, Resnick, F.E. Sweeney and                        
Pfeifer, JJ., concur.                                                            
     Fain, J., dissents.                                                         
     Mike Fain, J., of the Second Appellate District,                            
sitting for Wright, J.                                                           
FOOTNOTES:                                                                       
1    "Environmental compliance plan" is defined in R.C.                          
4913.01(B) to mean "a plan developed by an electric light                        
company to comply with the acid rain control requirements                        
at all generating facilities owned by the company that are                       
affected by the Phase I acid rain control requirements."                         
2    "Acid rain control requirements" is defined in R.C.                         
4913.01(D) to mean the Phase I acid rain control                                 
requirements of the CAAA.                                                        
3    R.C 4909.157(A) provides that after the commission                          
has approved an environmental compliance plan under R.C.                         
Chapter 4913, the commission cannot reconsider the                               
approval of the plan or the appropriateness or prudence of                       
any compliance measure contained therein, except as                              
otherwise provided in R.C. 4913.05 or 4913.06.  R.C.                             
4913.05 mandates that the commission must review a plan                          
which has been approved under R.C. 4913.04 between two and                       
two and one-half years after the approval, or earlier in                         
the event of an extraordinary change of circumstances.                           
R.C. 4913.06 permits an electric light company to seek                           
review and approval of a modified plan.  However, nothing                        
in R.C. 4909.157(A) limits the commission's authority                            
under R.C. Chapters 4901, 4903, 4905 or 4909 to examine                          
the management policies and practices of an electric light                       
company that is a public utility in implementing a                               
compliance measure contained in an approved plan or to                           
examine the costs incurred by the company for implementing                       
any such compliance measure.  R.C 4909.157(B).  Nor do the                       
provisions of R.C. 4909.157(A) limit the commission's                            
authority under R.C. Chapters 4901, 4903, 4905 or 4909 to                        
examine the company's fuel procurement policies and                              
practices.  R.C. 4909.157(C).                                                    
4    In that report, AEP developed a least-cost strategy                         
for Phase I compliance for the AEP system.  The AEP                              
"system" includes electric utilities which service                               
customers in parts of Ohio and other states.  In                                 
formulating its least-cost compliance strategy, AEP                              
determined the compliance options for each Phase I                               
affected electric utility generating unit within the                             
system and ranked those options in terms of cost                                 
effectiveness, i.e., cost per ton of sulfur dioxide                              
removed.  The options were then selected in order of                             
increasing cost per ton until compliance was achieved.                           
Specifically, compliance strategies with a cost                                  
effectiveness of less than four hundred dollars per ton                          
were selected for implementation to meet the Phase I                             
requirements of the CAAA, with the exception of Ohio                             
Power's Cardinal Unit 1.  The compliance measure deemed                          
applicable to that unit (fuel-switching from high-sulfur                         
coal to low-sulfur coal) was deferred until Phase II.  The                       
AEP report concluded that the least-cost compliance                              
strategy for the AEP system would include installation of                        
scrubbers at Ohio Power's Gavin Units 1 and 2, a                                 
fuel-switch at Ohio Power's Muskingum Unit 5 from                                
high-sulfur coal to low-sulfur coal, and a fuel-switch at                        
Ohio Power's Kammer Units 1-3 from high-sulfur coal to                           
moderate-sulfur coal.                                                            
5    According to the AEP report, the decision to delay                          
compliance action at Cardinal Unit 1 was made because                            
implementing a fuel-switch at that unit would be the                             
highest-cost option for Ohio jurisdictional customers,                           
when Ohio Power would already be overcomplying with the                          
federal law on a "stand-alone" basis.  Further, a                                
fuel-switch at Cardinal Unit 1 would necessitate closure                         
of a company-affiliated mine.                                                    
Indus. Energy Consumers v. Pub. Util. Comm.                                      
     Fain, J., dissenting.  The majority opinion is an                           
admirably practical way of dealing with an admittedly                            
difficult problem, but I cannot read R.C. 4913.04(A)(2) in                       
the same way.  That provision requires that a plan for                           
complying with the federal Clean Air Act Amendments of                           
1990, in order to be approved by the Public Utilities                            
Commission, must, among other requirements, constitute "a                        
reasonable and least-cost strategy for compliance with the                       
applicable acid rain control requirements that is                                
consistent with providing reliable, efficient, and                               
economical electric service."  Once a plan has been                              
approved, a utility's implementation of the plan is                              
declared by statute to be a prudent management decision                          
for rate-making purposes.  R.C. 4909.157(A).                                     
     Although Ohio Power's plan called for switching from                        
high-sulfur coal at several locations when Phase I of the                        
federal Act begins in 1995, and also for using scrubbers                         
at the Gavin locations at that time, the plan for several                        
other locations called for no changes until Phase II, in                         
2000.  Ohio Power has never sought to modify its plan.                           
     There may have been conflicting evidence as to                              
whether the alternative strategy of switching to                                 
low-sulfur coal or natural gas at the other locations                            
(Cardinal Unit I and Muskingum Units 1-4) in 1995 would                          
cost less than waiting until 2000 to do so, but the fact                         
is that the commission found that the earlier fuel switch                        
at those locations would cost less, and there is evidence                        
in the record to support that finding.                                           
     In view of the commission's finding that a strategy                         
of switching to low-sulfur fuels at the other locations in                       
1995, rather than waiting until 2000 to do so, would cost                        
significantly less, I cannot conclude that the plan                              
actually submitted by Ohio Power is a "reasonable and                            
least-cost strategy" for compliance with applicable acid                         
rain control requirements.  It may lie within the universe                       
of all "reasonable" strategies for compliance, but it is                         
not "least-cost," and the requirement is in the                                  
conjunctive.                                                                     
     I would reverse the commission's approval of the plan                       
submitted by Ohio Power, and remand this matter to the                           
commission, which could, and should, encourage Ohio Power                        
to modify its plan to provide for earlier fuel switches at                       
Cardinal Unit I and Muskingum Units 1-4.