Office of Consumers' Counsel v. Public Utilities Commission

493 N.E.2d 1334, 24 Ohio St. 3d 149, 24 Ohio B. 368, 1986 Ohio LEXIS 661

• Court: Ohio Supreme Court
• Decided: June 25, 1986
• Docket: No. 85-794
• Status: Published

Opinions

Per Curiam.

In this appeal, the Office of Consumers’ Counsel contests the recovery through the EFC of deferred development costs associated with the phase-down of Quarto Mine No. 7. While Consumers’ Counsel would exclude deferred development costs associated with phased-down mines, the commission’s approved methodology is based on actual contract costs which in this case include both operative and phased-down mines.

In its notice of appeal to this court, appellant asserts that: “The Commission erred when it approved a change in the methodology used by the Ohio Edison Company (Company) to calculate the pass-through to ratepayers of the costs of developing the Quarto Mines in that the new methodology allows the Company to recover costs through- the Electric Fuel Component (EFC) mechanism which aire not acquisition costs of fuel pursuant to Ohio Revised Code Section 4905.01(F). * * *” (Emphasis added.) Appellant apparently ignores the fact that in the instant case, no “change” in methodology was approved; rather, the commission merely mandated the continuation of the methodology approved in an eárlier proceeding.

At semi-annual hearings to review the fuel component of public utility rate schedules pursuant to R.C. 4905.301, R.C. 4909.191(C) requires the utility to demonstrate that its acquisition and delivery cost were “fair, just, and reasonable.” “Acquisition cost” means “the cost to an electric light company of acquiring fuel for generation of electricity. * * *” R.C. 4905.01(F). In Consumers’ Counsel v. Pub. Util. Comm. (1983), 6 Ohio St. 3d 469, this court generally approved the commission’s practice of permitting recovery of deferred development costs through the EFC. By the terms of the contract between Quarto and CAPCO, the member companies are expressly obligated to pay development costs associated with the mines. No contractual distinction is drawn between active and phased-down mines, nor is the obligation dependent upon production from any particular mine.

Appellant urges that “[deferred development costs associated with an idle coal mine are not properly categorized as fuel acquisition costs within the meaning of Ohio Revised Code Section 4905.01(F)(2).”² However, that section does not apply to the instant case; it applies only to the determination of “a reasonable price for coal from a coal supply owned or controlled in whole or in part by the company * * *.”³

Nor does this court’s decision in Consumers’ Counsel v. Pub. Util. Comm. (1981), 67 Ohio St. 2d 153 [21 O.O.3d 96], support appellant’s argument. There, this court determined that because an investment in terminated nuclear units never provided any service whatsoever, the cost of construction of those units was not properly recoverable under R.C. 4909.15(A)(4). In contradistinction, the case at bar relates to the actual contract cost of procuring fuel. In the instant analysis, then, it is simply irrelevant whether the cost of the terminated mine would have been recoverable under R.C. 4909.15(A)(4).

In sum, we find that appellant has failed to establish that the commission’s decision to permit Ohio Edison to recover certain deferred development costs through the EFC is manifestly against the weight of the evidence or so clearly unsupported by the record as to show misapprehension, mistake, or a willful disregard of duty. Consumers’ Counsel v. Pub. Util. Comm., supra (6 Ohio St. 3d 469, 472); Consumers’ Counsel v. Pub. Util. Comm. (1983), 4 Ohio St. 3d 35, 36-37.

Accordingly, we affirm the order of the commission.

Order affirmed.

Parrino, Holmes, C. Brown, Douglas and Wright, JJ., concur. Celebrezze, C.J., and Locher, J., dissent. Parrino, J., of the Eighth Appellate District, sitting for Sweeney, J.

2 R.C. 4905.01(F) states, in pertinent part, that:

“* * * In determining a reasonable price for coal from a coal supply owned or controlled in whole or in part by the company, the public utilities commission shall consider the use of:

“(2) Ineffective operating techniques. Such term does not embrace any associated cost including, but not limited to, delivery cost, the cost of handling the fuel after its delivery to such facility, the cost of such processing, readying, or refinement of the fuel as may be necessary in order to use the fuel to generate electricity, or the cost of disposing of any residue of such fuel after it has been so used. * * *”

3 See In re Regulation of EFC of Ohio Edison Co., case No. 81-305-EL-EFC (Subfile A) (July 30, 1982), in which the commission determined that the CAPCO companies do not have the requisite control over the Quarto mining operation for R.C. 4905.01(F) to apply. The question of ownership or control of Quarto was never an issue in the instant appeal.