Court Opinion

ID: 6784226
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:59:45.596289+00
Date Added: 2024-06-11T16:02:55.176798
License: Public Domain

Lundberg Stratton, J.,
concurring in part and dissenting in part. I concur with the majority opinion, except I dissent to Part II, which is entitled “Unbundled Transmission Rate.” I believe that the majority’s approval of CG&E’s *89unbundling plan is unreasonable with regard.to Rate Schedule TS customers, which includes AK Steel. For example, AK Steel presented evidence that CG&E’s unbundled rate plan unréasonably assigns costs to Rate Schedule TS customers. Specifically, AK Steel showed that although Rate Schedule TS customers use only $15,746 worth of distribution equipment, $473,979 was attributed to their overhead distribution costs. In addition, the commission assigned over $2,000,000 in property taxes to distribution property associated with the Rate Schedule TS customers, yet the actual distribution property used by that class consisted of meters worth only $15,746. Finally, the commission assigned a billing expense of $485,569 to the Rate Schedule TS customers to serve thirty-four customers, yet assigned only $370,077 to the Secondary Distribution/Small class customers to support billing thirty-one thousand customers. The commission did not dispute these numbers.
As the majority points out, the commission admits that it did not achieve perfection. Even the commission conceded “certain allocations of costs * * * appear to be incongruous” but found that to determine a more appropriate allocation of the costs would violate R.C. 4928.34(A)(6), which required unbundling the rate that was in effect the day before the effective date of deregulation. The commission further defended its position by maintaining that it provided equal treatment within the class and that further cost shifts among the classes would cause it to exceed the cap set by R.C. 4928.34(A)(6).
Admittedly, R.C. 4928.34(A)(6) required the unbundling plan to be based on the 1992 cost-of-service study from commission case No. 92-1464-EL-AIR because those were the rates in existence the day before the effective date of deregulation. However, the commission was also under an obligation to fix reasonable rates. R.C. 4909.15. The numbers on their very face, as extreme as they are, defeat any claim of reasonableness.
The commission argued that AK Steel’s assertion that the unbundled rate was vastly overinflated when compared to actual costs was flawed because it was falsely premised on the assumption that rates must be equal to costs. Although there is no requirement that a rate must be equal to the cost of a service, it is evident that costs are the major component of a rate. See R.C. 4909.151 and 4928.34. Reading R.C. 4928.34(A)(6) in pañ materia with R.C. 4909.15, I would hold that if an unbundling plan results in an unbundled rate that is exponentially and unjustifiably more than the underlying cost of the service, the unbundled rates are unreasonable and the commission must make a reasonable reallocation. To hold otherwise would create an unreasonable result. Courts should avoid interpretations that yield unreasonable results. State ex rel. Besser v. Ohio State Univ. (2000), 87 Ohio St.3d 535, 721 N.E.2d 1044.
Boehm, Kurtz & Lowry and David F. Boehm, for appellant.
Betty D. Montgomery, Attorney General, Duane W. Luckey, Steven T. Nourse and Thomas W. McNamee, Assistant Attorneys General, for appellee Public Utilities Commission of Ohio.
James B. Gainer and Paul A. Colbert, for intervening appellee Cincinnati Gas & Electric Company.
Robert S. Tongren, Ohio Consumers’ Counsel, and Ann M. Hotz, Assistant Consumers’ Counsel, for intervening appellee Ohio Consumers’ Counsel.
I would find that CG&E’s unbundling plan resulted in unreasonable rates for the Rate Schedule TS customers. I would remand the issue to the commission to re-examine its figures and reallocate the rates in a fair and reasonable manner. Accordingly, I concur in part and dissent in part.
Pfeifer, J., concurs in the foregoing opinion.