Court Opinion

ID: 6788827
Source: CourtListenerOpinion
Date Created: 2022-07-21 01:07:36.188643+00
Date Added: 2024-06-11T16:03:00.505220
License: Public Domain

Lanzinger, J.,
concurring in part and dissenting in part.
{¶ 39} Although I concur in its other holdings, I respectfully dissent from the majority’s holding that the Public Utilities Commission’s (“PUCO’s”) order violates R.C. 4928.14(B). I believe that Constellation NewEnergy, Inc. v. Pub. Util. Comm., 104 Ohio St.3d 530, 2004-Ohio-6767, 820 N.E.2d 885, requires an affirmance of the PUCO’s rate-stabilization-plan approval.
{¶ 40} This court has consistently deferred to the commission’s judgment in matters that require the commission to apply its special expertise and discretion with regard to factual matters. Cincinnati Bell Tel. Co. v. Pub. Util. Comm. (2001), 92 Ohio St.3d 177, 180, 749 N.E.2d 262; AT & T Communications of Ohio, Inc. v. Pub. Util. Comm. (1990), 51 Ohio St.3d 150, 154, 555 N.E.2d 288; Cleveland Elec. Illum. Co. v. Pub. Util. Comm. (1976), 46 Ohio St.2d 105, 108, 75 O.O.2d 172, 346 N.E.2d 778. “Due deference should be given to statutory interpretations by an agency that has accumulated substantial expertise and to which the General Assembly has delegated enforcement responsibility.” Weiss v. Pub. Util. Comm. (2000), 90 Ohio St.3d 15, 17-18, 734 N.E.2d 775, citing Collinsworth v. W. Elec. Co. (1992), 63 Ohio St.3d 268, 272, 586 N.E.2d 1071.
*341{¶ 41} The majority has failed to follow this deferential standard in determining that the commission exceeded its statutory authority by approving the rate-stabilization plan. According to the majority, the commission-approved rate-stabilization plan does not comport with R.C. 4928.14(B) because no reasonable means for customer participation is ensured. The conclusion, however, departs from the precedent of Constellation, which the majority minimizes on the grounds that it involved consumers who stipulated away their right to a competitive-bid pricing plan.
{¶ 42} Yet in Constellation, we did more than simply consider a stipulation. In that case, the PUCO had approved a rate-stabilization plan for Dayton Power & Light Company (“DP & L”) similar to that proposed here by FirstEnergy, and DP & L’s competitor, Constellation NewEnergy, Inc., mounted the same type of legal challenge in that case as do the appellants in this case. Constellation argued that DP & L’s rate-stabilization plan “unlawfully circumvents Section 4928.14(B), Revised Code, by adopting an alternative to the statutorily mandated competitive bid-out before the rules on competitive bid-out were adopted.” Constellation, 104 Ohio St.3d 530, 2004-Ohio-6767, 820 N.E.2d 885, at ¶44. In other words, just as the Ohio Consumers’ Counsel (“OCC”) argues, Constellation had argued that the PUCO had no authority to approve a market-based standard-service offer without entering a competitive-bid process under R.C. 4928.14(B).
{¶ 43} In Constellation, this court was convinced that the stipulation setting forth DP & L’s plan complied with R.C. 4928.14(B). 104 Ohio St.3d 530, 2004-Ohio-6767, 820 N.E.2d 885, at ¶ 46-49. We also determined that DP & L’s plan satisfied the competitive-bidding requirements of the statute because (1) the stipulation “ ‘provides for ongoing Commission review of market-based rates, through a competitive bidding process, if necessary,’ ” (2) the stipulation “ ‘provides that, if market-based rates do not reasonably reflect the rates established by the Stipulation, then the Commission may terminate the RSP [rate-stabilization plan] and trigger a competitive bidding process,’ ” and (3) “ ‘the Voluntary Enrollment Procedure provides DP & L customers the opportunity to choose any certified competitive retail supplier, thus providing customers with an option to select a marketer and a reasonable method to participate.’ ” Constellation, 104 Ohio St.3d 530, 2004-Ohio-6767, 820 N.E.2d 885, ¶ 48, quoting the PUCO decision. Applying the appropriate standard of review, we held that the PUCO’s approval of DP & L’s plan was reasonable and lawful. Id. at ¶ 52-53.
{¶ 44} In short, we have previously affirmed a PUCO decision approving a rate-stabilization plan similar to the one the PUCO approved in this case. In fact, the PUCO’s planned ongoing review of FirstEnergy’s rate is actually better than its review in Constellation, for FirstEnergy’s rate was already tested in a competitive bid and was found to be the lowest. Just as in Constellation, the *342commission reserved the ability to terminate the rate-stabilization plan if it appears that it no longer provides customers with market-based rates.
{¶ 45} The PUCO, in its June 9, 2004 order, summarized its rationale and addressed pertinent statutes in approving FirstEnergy’s proposed rate-stabilization plan: “The Commission finds that the procedure set forth in the RSP [rate-stabilization plan], as modified by the Commission, does provide consumers with market-based rates. Based upon the pricing information provided by various parties to this proceeding, we find that the Applicants’ 4.6 cents/kWh price for generation during 2006 through 2008 is a reasonable reflection of what market prices may be during that period. Additionally, the Commission has substantially limited the cost adjustments for generation service to those relating to taxes and for distribution service to those set forth in the existing ETP [electric-transition plan] settlement. More importantly, however, adequate safeguards are in place to allow the Commission to monitor the prices and confirm that, over time, those prices remain market-based and that consumers have adequate options for choosing among generation suppliers. Through this order, the Commission is directing that FirstEnergy undertake a CBP [competitive-bidding process] to ensure that customers receive the benefits of CBP rates should they be lower than rates established through a RSP. The RSP that we propose complies with the requirements of Section 4928.14, Revised Code. Section 4928.14, Revised Code, provides the Commission with flexibility in approving processes for determining market-based rates for the standard service offer. We find that, for FirstEnergy, the methodology for establishing a MBSSO [market-based standard-service offer] set forth in this order is reasonable. We also find that, by establishing the MBSSO with price monitoring, the RSP provides a reasonable alternative to a more traditional CBP, provides for a reasonable means of customer participation, and fulfills the requirements of Section 4928.14(B), Revised Code.” In re Applications of Ohio Edison Co., the Cleveland Elec. Illuminating Co. & the Toledo Edison Co. for Authority to Continue & Modify Certain Regulatory Accounting Practices & Procedures, for Tariff Approval & to Establish Rates & Other Charges Including Regulatory Transition Charges Following the Market Dev. Period, case No. 03-2144-EL-ATA, 2004 WL 1493955 (June 9, 2004) 45 (“June 9, 2004 Commission Opinion”).
{¶ 46} With Constellation as clear precedent, it is baffling how the majority can find unlawful the PUCO’s order approving FirstEnergy’s rate-stabilization plan. No one specifically complains that the plan is deficient for lack of a reasonable means for customer participation pursuant to R.C. 4928.14(B). Yet without anyone arguing that the rate-stabilization plan fails to meet requirements for reasonable means for customer participation, the majority finds this to be so.
*343{¶ 47} The majority says that “the record here contains nothing to persuade us that a reasonable means for customer participation has been developed as required by R.C. 4928.14(B)” and continues by stating that “[t]he absence of a stipulation signed by customer groups factually distinguishes this case from Constellation.” Apparently, it believes that “a reasonable means for customer participation [was] developed” in Constellation because the rate was developed through negotiation among representatives of broad customer groups. The last sentence in R.C. 4928.14(B), however, is a prospective requirement: “The commission may determine at any time that a competitive bidding process is not required, if other means to accomplish generally the same option for customers is readily available in the market and a reasonable means for customer participation is developed.” (Emphasis added.) As it explained in its order, the commission did find both requirements satisfied.
{¶ 48} Contrary to the majority’s implication, the existence of a stipulation in Constellation and the absence of a stipulation signed by customer groups from each class in this case does not mean that one provided “a reasonable means for customer participation,” as required by R.C. 4928.14(B), while the other did not. In Constellation, the commission found, and we agreed, that the stipulation included a “ ‘Voluntary Enrollment Procedure [that] provides DP & L customers the opportunity to choose any certified competitive retail supplier, thus providing customers with an option to select a marketer and a reasonable method to participate.’ ” Constellation, 104 Ohio St.3d 530, 2004-Ohio-6767, 820 N.E.2d 885, ¶ 48, quoting the PUCO’s decision in that case.
{¶ 49} Likewise, in this case, the commission-modified rate-stabilization plan extends shopping credits and enhances them to encourage customers to select energy generation supplied by a competitive retail electric service. In addition, the commission further provides customers reasonable methods to participate by ordering (1) “[t]hat FirstEnergy undertake a CBP [competitive-bidding process] consistent with this order and schedule a meeting with [its] staff and other interested parties to this proceeding to establish further requirements of the CBP” and (2) “[t]hat interested parties to this proceeding * * * meet to determine the best approach for billing shopping customers for retail transmission, net congestion, and ancillary services once the MDP [market-development period] has ended.” The requirement that reasonable means for customer participation be developed does not depend on whether a broad-based customer stipulation exists.
{¶ 50} Finally, in acting on FirstEnergy’s application, the PUCO did not act arbitrarily to eliminate an offer determined through competitive bids. In its decision, the PUCO reviewed an affidavit and the testimony of four witnesses regarding projected wholesale and retail prices for electric generation for 2006 *344through 2008 and then made specific findings with respect to both R.C. 4928.14(A), June 9, 2004 Commission Opinion at 44^45, and R.C. 4928.14(B), id. at 52 (finding No. 27). In summary, the PUCO acted as the General Assembly authorized it to do and in a way we had previously approved in Constellation.
{¶ 51} As was indicated by Chief Justice Moyer in writing for the court in Constellation:
{¶ 52} “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. Under this statutory standard, this court will not reverse or modify a PUCO decision as to questions of fact when the record contains sufficient probative evidence to show that the PUCO’s determination is not manifestly against the weight of the evidence and is not so clearly unsupported by the record that it shows misapprehension, mistake, or willful disregard of duty. AT & T Communications of Ohio, Inc. v. Pub. Util. Comm. (2000), 88 Ohio St.3d 549, 555, 728 N.E.2d 371. This court has consistently refused to substitute its judgment for that of the commission on evidentiary matters. See, e.g., AK Steel Corp. v. Pub. Util. Comm. (2002), 95 Ohio St.3d 81, 765 N.E.2d 862.” Constellation, 104 Ohio St.3d 530, 2004-Ohio-6767, 820 N.E.2d 885, ¶ 50.
{¶ 53} In my view, appellants have failed to show that the record lacks probative evidence so as to show misapprehension, mistake, or willful disregard of duty on the part of the commission or that the commission’s determinations were against the manifest weight of the evidence. Appellants have failed to convince me that we should substitute our judgment for that of the commission’s on its approval of the rate-stabilization plan.
{¶ 54} Because I conclude that the PUCO’s decisions with respect to FirstEnergy’s rate-stabilization plan were reasonable and lawful, I would affirm them entirely.
O’Connor, J., concurs in the foregoing opinion.
APPENDIX
{¶ 55} The Ohio Consumers’ Counsel asserts the following propositions of law: (1) “Beginning January 1, 2006, an electric distribution utility is required to provide customers a market-based standard service offer under R.C. 4928.14(A) and an option to purchase electric service the price of which is determined through a competitive bid under R.C. 4928.14(B); the PUCO has no authority to approve plans that do not comport with the requirements for market-based standard service offers set forth at R.C. 4928.14(A) and offers determined through competitive bids set forth at R.C. 4928.14(B)”; (2) “The PUCO acted unlawfully in approving a so-called ‘Rate Stabilization Charge’ (‘RSC’) in violation *345of R.C. 4928.38 and 4928.40, which require that the recovery of the Generation Transition Charge (‘GTC’) from customers ends on December 31, 2005; given that the amount of the RSC is the same as the GTC for each FirstEnergy operating company, the RSC allows unlawfully for the continuation of the recovery of GTC after December 31, 2005. The RSC is also anti-competitive in violation of R.C. 4928.17. In addition, the PUCO acted unlawfully in approving the RSC in that there is no basis in Ohio law for such a charge. The PUCO also approved the so-called RSCs as to what costs the charge was designed to recover and without evidence to justify the amount of the charge. The lack of evidentiary basis for the RSC violated R.C. 4903.09, which requires that, in contested cases, the PUCO’s opinions be based upon findings of fact established on the record of an evidentiary hearing”; (3) “The PUCO erred when it approved discriminatory treatment among the same class of residential customers by requiring some customers to pay the entire unlawful RSC while allowing other customers to avoid certain percentages of the unlawful RSC based upon the date at which the customers shopped and the entity with which they shopped. Nothing in R.C. Chapter 4928 permits such undue discrimination; in addition, such discrimination is unlawful pursuant to R.C. 4905.32, which requires that the same charge be extended to all persons under like circumstances for like services; R.C. 4905.33, which requires that no utility charge any person more or less than another person for like service; and R.C. 4905.35, which prohibits discrimination in the provision of public utility service. There was also no evidence of record to justify the discriminatory provisions for the avoidance of certain percentages of the unlawful RSC”; (4) “The PUCO acted unlawfully and unreasonably by granting FirstEnergy a financial separation waiver in violation of FirstEnergy’s corporate separation obligations set forth in R.C. 4928.17(A)”; and (5) “The PUCO acted unlawfully and unreasonably when it authorized FirstEnergy to renege on the terms of the April 17, 2000 Stipulation and Recommendation executed in The Application of FirstEnergy Corp. on Behalf of Ohio Edison Company, The Cleveland Electric Illuminating Company and The Toledo Edison Company for Approval of their Transition Plans and for Authorization to Collect Transition Revenues, PUCO Case No. 99-1212-EL-ETP, which the PUCO approved in its July 19, 2000 Opinion and Order, by permitting FirstEnergy to collect interest on shopping credit deferrals.”
{¶ 56} The governmental aggregators assert the following propositions of law: (1) “The Commission may not approve a market-based standard service offer that deviates from the requirements specified in R.C. 4928.14(A) and the Commission’s rules”; (2) “The Commission may not permit the substitution of a standard service offer in place of rates obtained by the competitive bid process specified in R.C. 4928.14”; (3) “The Commission may not approve, without proper legislative authority, a Rate Stabilization Plan that deviates from the provisions of R.C. *346Chapter 4928”; (4) “The Commission may not permit an electric distribution utility to collect generation fees from customers that are paying generation fees to a competitive supplier”; and (5) “The Commission may not approve the retroactive imposition of interest charges on rates that are capped by both R.C. 4928.34(A)(6) and a Commission-approved electric transition plan.”
Janine L. Migden-Ostrander, Ohio Consumers’ Counsel, and Kimberly W. Bojko and Jeffrey L. Small, Assistant Consumers’ Counsel, for appellant Ohio Consumers’ Counsel.
Barbara E. Herring, Toledo Law Director, Kerry Bruce, and Leslie A. Kovacik, for appellant city of Toledo.
Julia R. Bates, Lucas County Prosecuting Attorney, and Lance M. Keiffer, for appellant Lucas County Board of Commissioners.
Peter D. Gwyn, Perrysburg Law Director, for appellant city of Perrysburg.
Brian J. Ballenger, Northwood Law Director, for appellant city of Northwood.
Paul S. Goldberg, Oregon Law Director, and Phillip D. Wurster, for appellant city of Oregon.
Sheilah H. McAdams, Maumee Law Director, for appellant city of Maumee.
James E. Moan, Sylvania Law Director, for appellant city of Sylvania.
Paul Skaff, Assistant Holland Village Solicitor, for appellant village of Holland.
Jim Petro, Attorney General, Duane W. Luckey, Senior Deputy Attorney General, and William L. Wright and Thomas W. McNamee, Assistant Attorneys General, for appellee Public Utilities Commission of Ohio.
Jones Day, Paul T. Ruxin, and Helen L. Liebman; and Kathy J. Kolich and James W. Burk, for intervening appellee FirstEnergy Corporation.
McNees Wallace & Nurick L.L.C., Samuel C. Randazzo, Lisa G. McAlister, and Daniel J. Neilsen, for intervening appellee Industrial Energy Users-Ohio.
Henry W. Eckhart, urging reversal for amicus curiae, Representative Dennis Kucinich, Tenth Congressional District of Ohio.