Martin Marietta Magnesia Specialties, L.L.C. v. Public Utilities Commission

2011 Ohio 4189, 129 Ohio St. 3d 485
CourtOhio Supreme Court
DecidedAugust 25, 2011
Docket2009-1064, 2009-1065, 2009-1067, 2009-1071, and 2009-1072
StatusPublished
Cited by33 cases

This text of 2011 Ohio 4189 (Martin Marietta Magnesia Specialties, L.L.C. 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
Martin Marietta Magnesia Specialties, L.L.C. v. Public Utilities Commission, 2011 Ohio 4189, 129 Ohio St. 3d 485 (Ohio 2011).

Opinion

O’Donnell, J.

I. Introduction

{¶ 1} Martin Marietta Magnesia Specialties, L.L.C., the Calphalon Corporation, Kraft Foods Global, Inc., Worthington Industries, and Brush Wellman, Inc., each appeal from a decision of the Public Utilities Commission of Ohio (“PUCO”) that established February 2008 as the termination date for special contracts they entered into with the Toledo Edison Company for the sale of electricity. These special contracts had been approved by the PUCO pursuant to R.C. 4905.31, *486 which permits “reasonable arrangements” between public utilities and their customers. Generally, such contracts include arrangements that differ from the standard rate schedules and are often tailored to a specific customer’s service.

2} The parties to these appeals have asked us to determine the termination date of appellants’ special contracts with Toledo Edison. Appellants contend that Toledo Edison agreed in 2001 that the contracts would not terminate until Toledo Edison stopped collecting regulatory-transition charges from its customers. Appellants further contend that their contracts did not expire until December 31, 2008, the date when Toledo Edison stopped collecting regulatory-transition charges.

{¶ 3} In contrast, intervening appellee Toledo Edison and the PUCO maintain that the special contracts expired in February 2008, as provided by the commission’s orders in electric-deregulation cases involving Toledo Edison.

{¶ 4} The PUCO found that based on the language of the special contracts and its orders in the earlier electric-deregulation cases, the contracts terminated in February 2008. The commission erred in this determination, and we accordingly reverse its order and enter judgment in favor of appellants.

II. Facts

{¶ 5} In 2008, appellants filed complaints pursuant to R.C. 4905.26 against Toledo Edison with the Public Utilities Commission of Ohio. See PUCO case No. 08-893-EL-CSS (Martin Marietta); PUCO case No. 08-145-EL-CSS (Calphalon); PUCO case No. 8-146-EL-CSS (Kraft); PUCO case No. 08-67-EL-CSS (Worthington); and PUCO case No. 08-254-EL-CSS (Brush Wellman). In proceedings before the commission, the attorney examiner consolidated the five complaints, and the parties then filed joint stipulations of fact.

{¶ 6} Between 1990 and 1997, Toledo Edison entered into an electric-service contract with each appellant, and those contracts became valid after approval by the commission pursuant to R.C. 4905.31. According to the terms of these contracts, appellants received discount pricing for electric service below the standard tariff rates charged by Toledo Edison to other large industrial customers.

{¶ 7} On October 5, 1999, the General Assembly enacted Am.Sub.S.B. No. 3, codified as R.C. Chapter 4928, which restructured Ohio’s electric-utility industry to allow retail customers to buy electric service from providers other than local electric-service providers. Am.Sub.S.B. No. 3, 148 Ohio Laws, Part IV, 7962 (“S.B. 3”). Following passage of that legislation, in a series of cases involving Toledo Edison and other electric utilities, the PUCO attempted to ease the transition from a regulated rate structure to a market rate structure. See Toledo Edison’s electric-transition-plan case, case No. 99-1212-EL-ETP; rate-stabiliza *487 tion-plan case, case No. 03-2144-EL-ATA; and rate-certainty-plan case, case No. 05-1125-EL-ATA (collectively, “the S.B. 3 cases”).

{¶ 8} Through a series of agreed stipulations and commission orders in the S.B. 3 cases, special-contract customers were able to extend the duration of their contracts with Toledo Edison.

{¶ 9} In the first S.B. 3 case, Toledo Edison’s electric-transition-plan case, special-contract customers were given a one-time opportunity to extend their special contracts, provided that those customers agreed to the offer by December 31, 2001. None of the appellants was a party to the electric-transition-plan case, but each received notice of the offer to extend its special contracts from Toledo Edison pursuant to the electric-transition-plan stipulation and the commission’s order approving that stipulation. Each accepted the offer to extend the terms of its contract with Toledo Edison until the date that Toledo Edison stopped collecting its regulatory-transition charges.

{¶ 10} Thereafter, each appellant amended its agreement with Toledo Edison, referred to as “the 2001 Amendments.” Each agreement contained the following language: “This Agreement, as amended, shall terminate with the bill rendered for the electric usage through the date which RTC ceases for the [Toledo Edison] Company.” The contracts defined “RTC” as regulatory-transition charges.

{¶ 11} The next opportunity to extend these contracts occurred in the second S.B. 3 case, Toledo Edison’s rate-stabilization-plan case. In that case, the commission again approved a joint stipulation filed by Toledo Edison and other parties allowing Toledo Edison’s customers to extend the term of any special contract beyond the extension approved in the electric-transition-plan case. However, unlike the electric-transition-plan case, neither the rate-stabilization-plan stipulation nor the commission’s order required Toledo Edison to notify its special-contract customers of the opportunity to extend, and Toledo Edison did not directly communicate with appellants or any other special-contract customer regarding this option. None of Toledo Edison’s special-contract customers, including appellants, was a party to the rate-stabilization-plan case. Despite this, nine of Toledo Edison’s 46 special-contract customers requested Toledo Edison to extend the terms of their special contracts, and Toledo Edison agreed. None of the appellants in this case, however, submitted a similar request to Toledo Edison to extend the term of its contract.

{¶ 12} Another stipulated contract extension was approved in the third S.B. 3 case, Toledo Edison’s rate-certainty-plan case. This stipulation provided that those special contracts that were extended under the rate-stabilization-plan ease would continue in effect until December 31, 2008. The stipulation further provided that special contracts extended under the electric-transition-plan case but not under the rate-stabilization-plan case — such as appellants’ contracts— *488 would continue in effect until February 2008. The stipulation stated that the February 2008 termination date for such contracts was “consistent with the [electric-transition-plan’s] method of calculation of the contract end dates.”

{¶ 13} The commission’s order in the rate-certainty-plan case also authorized Toledo Edison to continue to recover regulatory-transition charges through December 31, 2008. Accordingly, Toledo Edison continued to recover regulatory-transition charges after February 2008, through December 31, 2008. Notably, appellants were not parties to the rate-certainty-plan case and were not notified that an end date for special contracts would be established in that case.

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2011 Ohio 4189, 129 Ohio St. 3d 485, Counsel Stack Legal Research, https://law.counselstack.com/opinion/martin-marietta-magnesia-specialties-llc-v-public-utilities-commission-ohio-2011.