Greater Cleveland Welfare Rights Organization, Inc. v. Public Utilities Commission

442 N.E.2d 1288, 2 Ohio St. 3d 62
CourtOhio Supreme Court
DecidedDecember 22, 1982
DocketNo. 82-288
StatusPublished
Cited by7 cases

This text of 442 N.E.2d 1288 (Greater Cleveland Welfare Rights Organization, Inc. v. Public Utilities Commission) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Greater Cleveland Welfare Rights Organization, Inc. v. Public Utilities Commission, 442 N.E.2d 1288, 2 Ohio St. 3d 62 (Ohio 1982).

Opinion

Krupansky, J.

Sections 114(a) and (b) of PURPA (Section 2624[a] and [b], Title 16, U.S. Code) provide:

“(a) Lower rates. — No provision of this chapter prohibits a State regulatory authority (with respect to an electric utility for which it has ratemaking authority) or a nonregulated electric utility from fixing, approving, or allowing to go into effect a rate for essential needs (as defined by the State regulatory authority or by the nonregulated electric utility, as the case may be) of residential electric consumers which is lower than a rate under the standard referred to in section 2621(d)(1) of this title.

“(b) Determination. — If any State regulated electric utility or nonregulated electric utility does not have a lower rate as described in subsection (a) of this section in effect two years after November 9, 1978, the State regulatory authority having ratemaking authority with respect to such State regulated electric utility or the nonregulated electric utility, as the case may be, shall determine, after an evidentiary hearing, whether such a rate should be implemented by such utility.”

In their first proposition of law appellants assert the commission failed to [65]*65comply with the provisions of PURPA in the following five respects: (1) the commission did not define and consider the “essential needs” of residential electric consumers in reaching its determination; (2) the commission did not consider lifeline rates based on cost of service, the standard referred to in Section 111(d)(1)1 of PURPA; (3) the commission only analyzed one of the many justifications for adopting lifeline rates, i.e., providing assistance to low and fixed income individuals; (4) the commission improperly compared lifeline rates to available assistance programs; and (5) the commission rejected social considerations as being irrelevant to their inquiry.

A careful reading of the relevant sections of PURPA reveals a lack of merit in all of appellants’ five contentions. As to appellants’ first assertion one need only note that Sections 114(a) and (b) of PURPA simply grant a state regulatory authority the power to adopt or approve a “rate for essential needs” which is lower than a “rate under the standard referred to in section-2621(d)(1)” (cost of service standard). Nowhere in PURPA is there any requirement the commission must define “essential needs.” Indeed, a working definition of “essential needs” is unnecessary unless a decision is made to adopt and implement lifeline rates. Therefore, the commission was correct in not undertaking the futile task of defining “essential needs” in the absence of a decision to adopt lifeline rates.

Appellants’ second contention may be dispensed with through an examination of Section 111(d)(1) of PURPA in conjunction with Section 114 of that Act. Section 111(d)(1) defines cost of service rates as those rates which reflect the actual cost of providing electric service to a certain class. Section 114(a), which authorizes the adoption of lifeline rates, provides that a state regulatory authority may approve a rate for essential needs “which is lower than a rate under the standard referred to in section 2621(d)(1)” (cost of service). Reading these two sections together it becomes obvious that lifeline rates, by definition, consist of rates which are lower than a cost of service rate, not rates which are based on or equivalent to cost of service rates, as appellants contend.

Appellants’ third objection relates to the fact that the commission confined its analysis to whether lifeline rates would provide assistance to low and fixed income individuals, thereby ignoring the other justifications normally advanced for the adoption of such rates. First it must be noted that even if the commission had determined lifeline rates would successfully fulfill some of the goals underlying the creation of lifeline rates, there is nothing in PURPA to suggest lifeline rates must be adopted if they are found to be ineffective in advancing.another goal. Second, it is clear the commission was [66]*66keenly aware of the various rationales for lifeline rates when it made its decision. Indeed, in its order and opinion the commission actually enumerated four of the most frequently advanced justifications for lifeline rates and concluded:

“Thus, while there are in fact varied reasons set forth in support of lifeline rates, the predominate belief held by witnesses testifying at this hearing was that the purpose of lifeline rates is to provide assistance to low and fixed income customers by reducing their electric bills. Thus, it is with this goal in mind that the Commission will evaluate the propriety of implementing lifeline rates.”

From the above passage it is apparent the commission did consider all of the justifications for lifeline rates and determined the major goal to be providing assistance to low and fixed income individuals. The commission’s decision to focus on this one aspect of lifeline rates was not erroneous.

Appellants’ fourth claim is that the commission acted improperly in comparing lifeline rates to existing assistance programs. It is clear from the opinion that the commission’s rejection of lifeline rates was not based on the present availability of adequate assistance programs, but rather, the rejection was based on the conclusion by the commission that lifeline rates would not fulfill the proposed goals and would result in the imposition of inequitable rates. Since the commission determined lifeline rates to be an inappropriate vehicle to aid low and fixed income customers, it seems apparent the rates would not have been adopted even in the absence of existing direct assistance programs. Consequently, the commission’s parenthetical reference to the availability of other assistance programs in this area does not constitute error.

Appellants’ final assertion under their first proposition of law is that the commission “erred in its absolutist rejection of Social Considerations as a relevant factor in setting utility rates.” Appellants’ contention apparently emanates from the following excerpt contained in the opinion of the commission:

“The evidence indicates that practically all residential consumers would receive lower bills under lifeline rates. However, in order to make up the revenue deficiency resulting from lifeline rates, high-use residential electric customers must subsidize the lower-use customers. Thus, in an effort to assist low-income customers, those who have greater consumption must subsidize the majority of the residential class. Further, lifeline rates do not even adequately accomplish the intended goal, as a portion of low-income or elderly consumers who happen to have high consumption would not only fail to receive any benefit but would in fact be harmed by even higher electric bills. Nor does the Commission believe it would be equitable to make up the revenue deficiency outside of the residential class of customers. Thus, lifeline rates are an inefficient way to accomplish the intended goal. Even if this were not so, the Commission does not believe that rates should be structured [67]*67with such social considerations in mind. The redistribution of income is simply not a ratemaking function.”

We do not feel the above-quoted passage demonstrates any “absolutist rejection of Social Considerations” by the commission. Rather, as stated previously, it simply reflects the commission’s determination that lifeline rates are an ineffective means to attain the intended goals.

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Bluebook (online)
442 N.E.2d 1288, 2 Ohio St. 3d 62, Counsel Stack Legal Research, https://law.counselstack.com/opinion/greater-cleveland-welfare-rights-organization-inc-v-public-utilities-ohio-1982.