[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as In 

re Application to Modify, in accordance with R.C. 4929.08, the Exemption Granted to E. Ohio 

Gas Co., Slip Opinion No. 2015-Ohio-3627.] 

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. 2015-OHIO-3627

IN RE APPLICATION TO MODIFY, IN ACCORDANCE WITH R.C. 4929.08, THE 

EXEMPTION GRANTED TO EAST OHIO GAS COMPANY, D.B.A. DOMINION EAST 

OHIO, IN CASE NO. 07-1224-GA-EXM; OHIO PARTNERS FOR AFFORDABLE 

ENERGY, APPELLANT; PUBLIC UTILITIES COMMISSION ET AL., APPELLEES. 

[Until this opinion appears in the Ohio Official Reports advance sheets, it 

may be cited as In re Application to Modify, in accordance with R.C. 4929.08, 

the Exemption Granted to E. Ohio Gas Co., Slip Opinion No. 2015-Ohio-3627.] 

Public utilities—Commission had authority to modify its previous order and allow 

utility to stop providing a standard choice offer for its nonresidential 

customers—Orders affirmed. 

(No. 2013-0433—Submitted May 6, 2015, Decided September 8, 2015.) 

APPEAL from the Public Utilities Commission of Ohio, No. 12-1842-GA-EXM. 

_______________________ 

O’NEILL, J. 

{¶ 1} Appellant, Ohio Partners for Affordable Energy (“OPAE”), an 

advocacy group that supports affordable-energy policies for low- and moderate-
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2

income Ohioans, appeals from an order of the Public Utilities Commission of 

Ohio authorizing the East Ohio Gas Company, d.b.a. Dominion East Ohio 

(“Dominion”), to discontinue the availability of the standard choice offer for its 

nonresidential customers, thereby taking another step toward deregulation of the 

company’s commodity-sales services. In order to take this step, the commission 

had to modify one of its previous orders. OPAE, representing its members who 

are nonresidential customers of Dominion, argues that the commission lacked 

statutory authority and an evidentiary basis to modify its previous order and also 

erred in adopting a stipulation that OPAE did not sign. For the reasons explained 

below, we affirm the commission’s order. 

I. Factual and Procedural Background 

A. Phase one of Dominion’s plan to exit the merchant function 

{¶ 2} In 1996, the General Assembly passed legislation initiating 

deregulation of public utilities’ natural-gas services, including allowing naturalgas companies to apply for an exemption from traditional “commodity-sales 

service” regulations. See R.C. 4929.04. A natural-gas company’s “commoditysales service” is the company’s selling of natural gas to consumers, see R.C. 

4929.01(C), and the parties in this case refer to this service as the utility 

company’s “merchant function.” And they refer to transitioning away from the 

business of selling natural gas as “exiting the merchant function.” 

{¶ 3} For the past decade, Dominion has been gradually moving away 

from its merchant function to focus more on its fundamental role as a distributionservice provider. In 2005, Dominion filed an application proposing to restructure 

its commodity-sales obligations for those customers who had not yet participated 

in the company’s gas-choice program—i.e., those customers who had not yet 

“shopped” for natural-gas services from third-party retail suppliers. Dominion’s 

proposal had two phases, which we summarized in Ohio Partners for Affordable 

Energy v. Pub. Util. Comm., 115 Ohio St.3d 208, 2007-Ohio-4790, 874 N.E.2d 
January Term, 2015 

3

764. In phase one, Dominion proposed an interim wholesale model by which it 

would continue to provide commodity service using an auction process to obtain 

its wholesale gas supplies. In phase two, Dominion’s stated goal was to transfer 

any remaining nonshopping customers to third-party retail suppliers. Thus, 

Dominion intended that by the end of phase two, its customers would be in direct 

business relationships with retail suppliers, rather than with Dominion. Id. at 

¶ 2-5. 

{¶ 4} In May 2006, the commission granted Dominion an exemption from 

traditional commodity-sales regulations so that it could implement phase one of 

its proposal. In re Application of E. Ohio Gas Co. for Approval of Plan to 

Restructure Its Commodity Serv. Function, Pub. Util. Comm. No. 05-474-GAATA (May 26, 2006). OPAE appealed, and in 2007, we affirmed the 

commission’s decision. Ohio Partners.

B. Phase two: the “standard choice offer” and the “2008 Exemption 

Order” 

{¶ 5} In June 2008, the commission granted Dominion another exemption 

to begin phase two of its planned exit from the merchant function. In re 

Application of the E. Ohio Gas Co. for Approval of a Gen. Exemption of Certain 

Natural Gas Commodity Sales Servs., Pub. Util. Comm. No. 07-1224-GA-EXM 

(June 18, 2008) (the “2008 Exemption Order”). In phase two, Dominion replaced 

its previous wholesale auction with a retail auction, and the natural-gas service 

based on this auction was called the “standard choice offer.” Under the standard 

choice offer, Dominion continued to hold an auction for nonshopping customers, 

but the retailer that prevailed at auction supplied the commodity to the customers 

and that retailer’s name was identified on the customer’s bill. During the 

commission proceeding, Dominion stated that it intended this new auction process 

to facilitate direct business relationships between consumers and retailers. 

Additionally, Dominion intended that its final auction under the standard choice 
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4

offer would be for the service period ending in March 2011 and after that date, 

customers would be required to enter into direct sales relationships with a retailer 

or participate in a governmental aggregation program, if available in that 

customer’s service area. 

C. The present proceeding: Dominion’s request to modify the 2008 

Exemption Order 

{¶ 6} As noted, Dominion had anticipated that phase two would result in 

its customers establishing direct contractual relationships with retailers. 

However, according to Dominion, it later became clear that some of its customers 

were not exercising their ability to shop for a retail supplier as long as the 

standard choice offer remained an option. Thus, in June 2012, Dominion, along 

with the Ohio Gas Marketers Group (“OGMG”), filed a joint motion to modify 

the 2008 Exemption Order under R.C. 4929.08(A), which authorizes the 

commission to modify a prior exemption order under specified conditions. 

{¶ 7} In their joint motion, Dominion and OGMG requested that the 

commission authorize Dominion to discontinue the availability of the standard 

choice offer for its nonresidential customers. The joint movants proposed that (1) 

instead of the standard choice offer, nonresidential customers who had not yet 

selected a retail supplier would be assigned to receive service from a certified 

retail natural-gas supplier through a rotating list of such suppliers maintained by 

Dominion and (2) these nonresidential customers would take service from the 

retail suppliers at their then-applicable monthly variable rate, with the ability to 

switch to a different supplier or participate in a governmental aggregation 

program at any time. 

{¶ 8} Dominion claimed that it decided to make this change for 

nonresidential customers because this group represented a comparatively small 

number of its customers, and the information that Dominion could glean from a 

merchant-function exit for these customers would provide valuable insight into 
January Term, 2015 

5

whether it would be appropriate to exit the merchant function for all its customers 

(nonresidential and residential). Dominion estimated that its plan would affect 

less than 20 percent of its nonresidential customers, which was only about 14,000 

customers or 1.2 percent of its entire customer base. The other 80-plus percent of 

Dominion’s nonresidential customers would not be affected, because they had 

already selected a retail supplier or were participating in a governmental 

aggregation program. 

{¶ 9} Attached to the joint motion for modification was a stipulation 

signed by Dominion, OGMG, and the Ohio Consumers’ Counsel (“OCC”). The 

stipulation set forth procedures for how Dominion would discontinue the auction 

process and assign customers to third-party retail suppliers. In addition, 

Dominion agreed that it would not apply to exit the merchant function for 

residential customers until April 2015, at the earliest. And during the interim, 

Dominion agreed, it will send data to the OCC about the effect of Dominion’s exit 

from the merchant function on its nonresidential customers. 

{¶ 10} OPAE opposed the joint motion, arguing that Dominion and 

OGMG had not met the statutory requirements to be entitled to a modification of 

a prior exemption order under R.C. 4929.08(A). The Retail Energy Supply 

Association thereafter intervened. Both OGMG and the Retail Energy Supply 

Association are organizations with natural-gas retail suppliers as members, and 

because the groups have submitted joint filings and are represented by the same 

counsel, we refer to these two organizations jointly as the “Marketers.” The case 

proceeded to a hearing, at which witnesses for all sides testified as to whether the 

commission should modify the 2008 Exemption Order to discontinue the standard 

choice offer. In January 2013, the commission granted the requested 

modification, and after the commission denied OPAE’s motion for rehearing, 

OPAE appealed to this court. 

 
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II. Standard of Review 

{¶ 11} “R.C. 4903.13 provides that a [Public Utilities Commission’s] 

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 commission decision as to questions of fact when the record contains sufficient 

probative evidence to show that the commission’s decision is not against the 

manifest weight of the evidence and is not so clearly unsupported by the record as 

to show misapprehension, mistake, or willful disregard of duty. Monongahela 

Power Co. v. Pub. Util. 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. Although this court has “ ‘complete and 

independent power of review as to all questions of law’ ” in appeals from the 

commission, Ohio Consumers’ Counsel v. Pub. Util. Comm., 121 Ohio St.3d 362, 

2009-Ohio-604, 904 N.E.2d 853, ¶ 13, quoting 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 where “highly specialized issues” 

are involved and “where 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). 

III. Law and Analysis 

{¶ 12} OPAE asserts that the commission’s order violates two statutes. 

First, and primarily, OPAE argues that Dominion and the Marketers were not 

entitled to a modification of an exemption order under R.C. 4929.08(A), which 

provides: 
January Term, 2015 

7

[T]he commission, upon its own motion or upon the motion of any 

person adversely affected by such exemption * * * may abrogate 

or modify any order granting such an exemption or authority only 

under both of the following conditions: 

(1) The commission determines that the findings upon 

which the order was based are no longer valid and that the 

abrogation or modification is in the public interest; 

(2) The abrogation or modification is not made more than 

eight years after the effective date of the order, unless the affected 

natural gas company consents. 

{¶ 13} Second, OPAE claims that the order on appeal violates R.C. 

4903.09, which requires the commission to file “findings of fact and written 

opinions setting forth the reasons prompting the decisions arrived at, based upon 

said findings of fact.” 

A. Proposition of law No. 1 

{¶ 14} In its first proposition of law, OPAE argues that the commission 

“ignored” the actual findings of the 2008 Exemption Order and instead “rewrote” 

the prior order so that it could justify a determination that the order’s findings 

were no longer valid under R.C. 4929.08(A)(1). OPAE’s argument is based 

almost entirely on differences in wording between the 2008 Exemption Order and 

the commission’s interpretation of that order in the underlying case. In the 2008 

Exemption Order, the commission determined that “phase 2 represents a 

reasonable structure through which to further the potential benefits of marketbased pricing of the commodity sales by the company.” In the order on appeal 

here, the commission stated that this finding was no longer valid because “phase 

two no longer provides any potential for further exploration of the benefits of

market-based pricing for natural gas services.” OPAE claims that the commission 
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8

“deliberately mischaracterized” the findings in the 2008 Exemption Order by 

referring to “market-based pricing for natural gas services” instead of the actual 

language used in the 2008 order: “market based pricing of commodity sales by 

the company.” (Emphasis added.) This language, according to OPAE, “is 

absolutely not the same thing,” and the difference in wording is the “crux of the 

issue on appeal.” 

{¶ 15} Despite the significance that OPAE places on this difference in 

language, it has not adequately explained how the meaning of these two phrases 

differs or why the difference is important. OPAE appears to be arguing that the 

sentence from the 2008 Exemption Order demonstrates that the sole objective of 

that order was to implement the standard choice offer—that is, to introduce 

market-based pricing “by the company” (Dominion) through an auction process, 

thereby giving customers another supply option for natural gas. Nothing about 

that finding, according to OPAE, is now invalid. However, in order to modify the 

2008 Exemption Order under R.C. 4929.08(A), OPAE argues, the commission 

had to “pretend” that the 2008 Exemption Order was supposed to bring about 

phase three—the next phase in Dominion’s exit from the merchant function—so 

that it could find the prior order’s findings invalid. According to OPAE, “nothing 

in the 2008 Exemption Order anticipates or contemplates Phase 3.” 

{¶ 16} OPAE’s emphasis on one sentence from the 2008 Exemption Order 

takes that sentence out of context and is inconsistent with the stated purpose of 

phase two. A reading of the entire 2008 Exemption Order demonstrates that the 

intent of phase two was not simply to introduce the standard choice offer so that 

Dominion customers could purchase gas through that option indefinitely. The 

2008 Exemption Order expressly states that Dominion was “requesting 

Commission approval of the second phase of the company’s plan to exit the 

merchant function,” which was an “intermediate step between phase 1 and 

[Dominion’s] ultimate exit of the merchant function.” 2008 Exemption Order at 
January Term, 2015 

9

6. The order goes on to state that Dominion intended phase two “to facilitate the 

process of choice-eligible customers establishing contractual relationships with a 

competitive retail natural gas service * * * provider prior to the time [Dominion] 

ceases providing commodity service to such customers.” Id. The 2008 

Exemption Order discussed only two planned auctions for the standard choice 

offer, after which Dominion would be required to seek commission approval 

“before moving from the [standard choice offer] commodity-service market to a 

market in which choice-eligible customers will be required to enter into a direct 

retail relationship with a supplier or governmental aggregator to receive 

commodity service.” Id. at 13-15. 

{¶ 17} Thus, OPAE’s claim that the 2008 Exemption Order did not 

contemplate the next phase in Dominion’s exit—and, instead, was merely meant 

to introduce the standard choice offer as an additional customer option—is not 

supported by a fair reading of the 2008 Exemption Order. The bottom line is that 

OPAE has not established that the commission “ignored,” “deliberately 

mischaracterized,” or “rewrote” any prior order to reach its decision in this case. 

{¶ 18} Within proposition of law No. 1, OPAE also points to language in 

the 2008 Exemption Order stating that Dominion must file a “separate application 

in the future” to transition to a market in which customers would be required to 

enter into a direct sales relationship with retailers. OPAE claims that Dominion 

did not file a “separate application” here, but instead chose to file the joint motion 

for a modification under R.C. 4929.08(A), which according to OPAE, was 

“procedurally defective.” 

{¶ 19} OPAE has not proved, however, that Dominion’s failure to file a 

“separate application”—rather than its motion to modify under R.C. 

4929.08(A)—requires this court to reverse the commission’s order. Both an 

application and a motion are formal requests seeking commission approval to take 

certain action, and the 2008 Exemption Order did not expressly require Dominion 
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10

to file an application under a specific statute. More importantly, OPAE has not 

demonstrated how it was prejudiced by the fact that Dominion filed its request as 

a motion to modify an exemption order under R.C. 4929.08(A), rather than 

through some other statutory process. For example, OPAE has not identified any 

procedural opportunity that it was denied by this case proceeding under R.C. 

4929.08(A). “[T]his court will not reverse a commission order absent a showing 

by the appellant that it has been or will be harmed or prejudiced by the order.” 

Ohio Consumers’ Counsel v. Pub. Util. Comm., 121 Ohio St.3d 362, 2009-Ohio604, 904 N.E.2d 853, ¶ 12. 

{¶ 20} Accordingly, we reject OPAE’s first proposition of law. 

B. Proposition of law No. 2 

{¶ 21} In its second proposition of law, OPAE argues that the record does 

not support the commission’s determination that the findings of the 2008 

Exemption Order are no longer valid and therefore the commission violated R.C. 

4929.08(A) and 4903.09. OPAE’s argument is premised on its belief that the 

commission “ignored” and “rewrote” the 2008 Exemption Order to determine that 

its findings were no longer valid. Because the actual findings from the 2008 

Exemption Order were valid, OPAE argues, there was no factual basis in the 

record for the commission’s decision. 

{¶ 22} As explained above, the commission did not rewrite the 2008 

Exemption Order. Therefore, OPAE’s evidentiary argument based on the same 

premise fails. And contrary to OPAE’s assertion, the record here contained 

evidence supporting the commission’s determination that the findings from the 

2008 order were no longer valid. As the commission explained in its rehearing 

entry, witnesses testified that phase two no longer provided its intended benefits 

and the standard choice offer was potentially precluding the development of a 

fully competitive market. Thus, testimony in the record—cited by the 
January Term, 2015 

11

commission in the underlying orders—supports its ruling. We therefore reject 

this proposition of law. 

C. Proposition of law No. 3 

{¶ 23} As noted above, R.C. 4929.08(A) states that any person “adversely 

affected” by a prior exemption order may file a motion for modification. In its 

third proposition of law, OPAE asserts that the commission erred by concluding 

that Dominion and the Marketers were “adversely affected” by the 2008 

Exemption Order. Additionally, OPAE claims that the commission failed to cite 

the administrative rule regarding requests to modify exemption orders, which 

OPAE also argues justifies reversal. 

{¶ 24} OPAE, however, has not established that the commission’s 

decision was against the manifest weight of the evidence. See Monongahela 

Power Co., 104 Ohio St.3d 571, 2004-Ohio-6896, 820 N.E.2d 921, ¶ 29 

(appellant bears burden of proof on questions of fact). At the hearing, a 

Dominion witness testified that since 2005, Dominion has been taking steps to 

exit the merchant function and that because a core of nonresidential customers 

continued to rely on the default standard choice offer, Dominion’s planned exit 

was being hindered. Similarly, witnesses for the Marketers explained how 

retailers and the public would benefit from a more competitive natural-gas market 

without a default sales service by the utility company. Thus, the commission 

heard sufficient evidence to conclude that continuation of the standard choice 

offer was adversely affecting Dominion and the Marketers, and OPAE has not 

otherwise established that the commission’s finding here was so clearly 

unsupported by the record as to show misapprehension, mistake, or willful 

disregard of the facts. 

{¶ 25} Finally, OPAE’s notice of appeal did not cite an alleged violation 

of any administrative rule, and “[t]he court lacks jurisdiction to consider 

arguments not included in a notice of appeal.” Ohio Partners, 115 Ohio St.3d 
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208, 2007-Ohio-4790, 874 N.E.2d 764, ¶ 16. Accordingly, OPAE’s third 

proposition of law is dismissed. 

D. Proposition of law No. 4 

{¶ 26} In its fourth proposition of law, OPAE asserts that the commission 

violated R.C. 4929.08(A) and 4903.09 because the record does not support a 

conclusion that modification of the 2008 Exemption Order was in the public 

interest. According to OPAE, elimination of the standard choice offer thwarts the 

public interest because its availability is consistent with state energy policy under 

R.C. 4929.02. 

{¶ 27} OPAE, however, is requesting that we reweigh the evidence 

regarding whether modification was in the public interest, which is outside the 

scope of our function on appeal. Elyria Foundry Co. v. Pub. Util. Comm., 114 

Ohio St.3d 305, 2007-Ohio-4164, 871 N.E.2d 1176, ¶ 39. To support its 

argument, OPAE cites the testimony of its own witness, who concluded that 

elimination of the standard choice offer will take away a competitive option (an 

auction) and result in higher prices for those customers, which is contrary to state 

energy policy promoting diversity of supply options and reasonable prices. 

Dominion and the Marketers, on the other hand, presented evidence indicating 

that Dominion’s presence in the commodity-sales market was hindering 

competition and therefore contrary to state policy. For example, a Dominion 

witness testified that discontinuing the standard choice offer would directly 

increase the entrance of customers into the commodity-sales market because the 

commission would be encouraging customers and retailers to enter into direct 

sales relationships, and customers will then have the incentive to carefully review 

the options available to them and determine which option is best for them. 

Similarly, a witness for the Marketers testified that in a competitive market, 

suppliers will be constantly searching for efficient ways to supply natural gas and 
January Term, 2015 

13

that competition will not be based solely on price, but also on the development of 

new products and services. 

{¶ 28} After hearing this testimony, the commission determined that the 

requested modification furthered state energy policy by providing for an 

expeditious transition to the provision of natural-gas services in a manner that 

achieves effective competition and transactions between willing buyers and 

willing sellers and by encouraging innovation, both in how services are provided 

and in the variety of available products. Additionally, the commission determined 

that customers will be protected during this transition. Whether the commission’s 

findings will ultimately be correct is an open question, but “[t]his court has 

consistently refused to substitute its judgment for that of the commission on 

evidentiary matters.” Monongahela Power Co., 104 Ohio St.3d 571, 2004-Ohio6896, 820 N.E.2d 921, ¶ 29. 

{¶ 29} Additionally, this is a case in which we should defer to the 

commission’s findings. The General Assembly determined that the commission 

must consider state energy policy in deciding whether a proposed modification is 

in the public interest under R.C. 4929.08(A). See R.C. 4929.02(B). Whether 

Dominion’s requested modification is consistent with policy objectives—such as 

whether discontinuation of the standard choice offer will encourage innovation, 

R.C. 4929.02(A)(4), or help achieve effective competition and transactions 

between willing buyers and willing sellers, R.C. 4929.02(A)(7)—are issues best 

suited for the regulatory agency assigned to implement state policy. Thus, given 

the commission’s duty and authority to enforce these competition-encouraging 

statutes and policies, we accord due deference to the agency’s ability to determine 

how best to further a competitive natural-gas market. See Ohio Consumers’ 

Counsel v. Pub. Util. Comm., 125 Ohio St.3d 57, 2010-Ohio-134, 926 N.E.2d 

261, ¶ 40 (“The General Assembly left it to the commission to determine how 

best to carry out the state’s policy goals in R.C. 4929.02(A)(4) and 4905.70”); 
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14

Payphone Assn. v. Public Util. Comm., 109 Ohio St.3d 453, 2006-Ohio-2988, 849 

N.E.2d 4, ¶ 25 (“As the agency with the expertise and statutory mandate to 

implement the statute, the [Public Utilities Commission] is entitled to deference”). 

E. Proposition of law No. 5 

{¶ 30} In its final proposition of law, OPAE asserts that the commission 

acted unreasonably and unlawfully by treating “a contested case as a settled case” 

when the “stipulation does not address the contested issues in the case.” 

According to OPAE, the stipulation was “irrelevant” because it did not address all 

of the contested issues. In addition, OPAE claims that the stipulation was not a 

“product of serious bargaining,” because it was not signed by any party 

representing nonresidential customers. 

{¶ 31} For the following reasons, we reject this proposition of law. First, 

the commission did not treat this as a “settled case.” The record shows that some 

parties entered into a stipulation, and although OPAE was invited to participate in 

the negotiations that led to the stipulation, it decided not to. The case 

subsequently went to a full hearing with OPAE as the only party opposing the 

joint motion. OPAE has not identified any procedural right or opportunity that it 

was denied during the hearing. In the order that is on appeal, the commission first 

addressed OPAE’s opposition arguments to the modification. After rejecting 

OPAE’s arguments, the commission then moved to its analysis of whether to 

adopt the stipulation. Contrary to the impression given in OPAE’s brief, the 

commission’s order does not suggest that the stipulation resolves all the contested 

issues in the case. 

{¶ 32} Second, the stipulation was not irrelevant. The issues resolved in 

the stipulation may not be significant to OPAE, but they were important issues to 

the parties that signed the stipulation. The fact that the stipulation did not resolve 

all of OPAE’s opposition arguments does not mean that the commission’s 

approval of the stipulation was unlawful. 
January Term, 2015 

15

{¶ 33} Finally, as to OPAE’s claim that the commission erred in holding 

that the stipulation was the “product of serious bargaining,” OPAE did not raise 

this specific argument in its notice of appeal. We therefore lack jurisdiction to 

consider it now. Ohio Partners, 115 Ohio St.3d 208, 2007-Ohio-4790, 874 

N.E.2d 764, ¶ 16. 

IV. Conclusion 

{¶ 34} For the foregoing reasons, we affirm the commission’s order. In 

doing so, we rely on the commission’s stated willingness to reestablish the 

standard choice offer if it later determines that Dominion’s exit from the merchant 

function is unjust or unreasonable for any customer class. We also rely on the 

commission’s rationale that discontinuation of the standard choice offer for this 

small subset of customers will allow the commission to study the effects of the 

company’s exit from the merchant function, while still protecting customers. We 

expect the commission to continue to monitor the effects of Dominion’s exit from 

the merchant function for nonresidential customers and carefully analyze the data. 

Our decision today approves only the limited proposal here, based on the record 

before us. Any effort by Dominion to implement the next step in its planned exit 

from the merchant function—or any effort by a different utility company to alter 

its commodity-sales obligations—will require independent justification based on 

the merits of that future proposal. 

Orders affirmed. 

O’CONNOR, C.J., and O’DONNELL, LANZINGER, KENNEDY, and FRENCH,

JJ., concur. 

PFEIFER, J., dissents. 

_________________

PFEIFER, J., dissenting. 

{¶ 35} This court today defers to the Orwellian conclusion of the Public 

Utilities Commission of Ohio (“PUCO”) that only by removing competition can 
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Ohio have a fully competitive marketplace for the sale of natural gas. The 

approximately 20 percent of choice-eligible commercial customers of intervening 

appellee East Ohio Gas Company, d.b.a. Dominion East Ohio (“Dominion”) that 

used standard choice offer (“SCO”) service to purchase their natural gas—a 

service tied to prices derived from the New York Mercantile Exchange and thus 

tied to the true market price of the commodity—will be instead forced into a 

relationship with a retail dealer. Gas marketers get a customer without having to 

persuade the customer that the marketer is the right choice for the particular user. 

That is not competition; that is coercion. 

{¶ 36} PUCO issued the order in this case under the authority of R.C. 

4929.08(A), which provides that PUCO “upon its own motion or upon the motion 

of any person adversely affected by [an] exemption * * * may abrogate or modify 

any order granting such an exemption” under certain conditions. The conditions 

cited by PUCO in this case are those contained in R.C. 4929.08(A)(1), which 

allows modification of the order when “[t]he commission determines that the 

findings upon which the order was based are no longer valid and that the 

abrogation or modification is in the public interest.” In this case, I would find that 

neither condition set forth in R.C. 4929.08(A)(1) is applicable. 

{¶ 37} As for the first condition, PUCO found that the exemption 

contained findings that were no longer valid, determining that “phase two no 

longer provides any potential for further exploration of the benefits of marketbased pricing for natural gas services” and was “hindering the development of a 

fully competitive marketplace.” Pub. Util. Comm. No. 12-1842-GA-EXM, at 8 

(Jan. 9, 2013). This was at a point when over 80 percent of Dominion’s 

nonresidential customers had chosen a competitive retail natural-gas supplier or to 

participate in a government-aggregation program. But it is apparent from the 

original order that phase two was never expected to complete the exit of 

Dominion from the merchant function. PUCO anticipated that further action 
January Term, 2015 

17

would be necessary, and it let Dominion know that that action would require a 

separate application: 

Dominion must seek, through a separate application in the 

future, Commission approval before moving from the SCO 

commodity service market to a market in which choice-eligible 

customers will be required to enter into a direct retail relationship 

with a supplier or governmental aggregator to receive commodity 

service, i.e., full-choice commodity service market. 

In re Application of the E. Ohio Gas Co. for Approval of a Gen. Exemption of 

Certain Natural Gas Commodity Sales Servs., Pub. Util. Comm. No. 07-1224-

GA-EXM, at 15 (June 18, 2008). 

{¶ 38} It was accepted as fact that phase two was not going to finish the 

job and that a third phase would be necessary. That phase two would plateau was 

baked into the cake. There has been no change in the validity of PUCO’s 

findings: it was clear in the order that phase two would fall short. 

{¶ 39} Further, the modification of the order is not in the public interest. 

It is in the interest of Dominion and marketers. The SCO is comparatively 

popular. It is an option for entities that do not want to make a decision on a 

natural-gas provider, those who do not want to enter into a contract, and those 

who trust the market price rather than a marketer’s price. The SCO price stands 

as a benchmark for fairness for customers who have entered arrangements with 

marketers. It lessens concern among customers that marketers will form a pricefixing cabal, since the SCO price is tied to what the market is for natural gas. It 

builds trust in the entire system. Plus, as a practical matter, SCO service has 

proved to be cheaper than other service. 
SUPREME COURT OF OHIO

18

{¶ 40} The modification of the order makes commercial users guinea pigs 

for Dominion’s eventual withdrawal from the merchant function for residential 

customers. Knowing the difficulty it will face in achieving a mandatory 

requirement that residential customers engage with a marketer, this modification 

is an attempt by Dominion and marketers to get to that requirement incrementally. 

No doubt, natural-gas marketers will be on their best behavior until the mother 

lode of residential customers becomes available for forced relationships. After 

that, the inertia of customers who are reluctant to make a choice—or to wade 

through the blizzard of postcard solicitations of natural-gas marketers—will be 

considered a good thing by the entity lucky enough to have gained their business. 

_________________ 

Colleen L. Mooney and David C. Rinebolt, for appellant. 

Michael DeWine, Attorney General, William L. Wright, Section Chief, 

and Steven L. Beeler, Assistant Attorney General, for appellee, Public Utilities 

Commission of Ohio. 

Whitt Sturtevant, L.L.P., Mark A. Whitt, Andrew J. Campbell, and 

Gregory L. Williams, for intervening appellee the East Ohio Gas Company. 

Vorys, Sater, Seymour & Pease, L.L.P., M. Howard Petricoff, Stephen M. 

Howard, and Michael J. Settineri, for intervening appellees the Ohio Gas 

Marketers Group and the Retail Energy Supply Association. 

Bruce J. Weston, Larry S. Sauer, and Joseph P. Serio, for amicus curiae 

Ohio Consumers’ Counsel. 

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