Ohio Partners for Affordable Energy v. Public Utilities Commission

115 Ohio St. 3d 208
CourtOhio Supreme Court
DecidedSeptember 20, 2007
DocketNo. 2006-1633
StatusPublished
Cited by15 cases

This text of 115 Ohio St. 3d 208 (Ohio Partners for Affordable Energy 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
Ohio Partners for Affordable Energy v. Public Utilities Commission, 115 Ohio St. 3d 208 (Ohio 2007).

Opinion

O’Donnell, J.

Background

{¶ 1} This is an appeal as of right filed by Ohio Partners for Affordable Energy (“OPAE”), an advocacy group that seeks affordable energy policies for low- and moderate-income Ohioans, from an order of the Public Utilities Commission of Ohio (“commission” or “PUCO”).

{¶ 2} This case involves the East Ohio Gas Company, d.b.a. Dominion East Ohio Gas (“Dominion”), its efforts to change the way it purchases natural gas, and the way the PUCO reviews that action. Dominion asked the PUCO to grant an exemption from the gas cost recovery review process so that Dominion could use third-party suppliers to buy the gas Dominion provides its customers, permitting Dominion to focus solely on distributing gas to consumers. A large number of customers on Dominion’s distribution system currently receive their natural gas from existing third-party suppliers. This effort addresses customers still receiving the commodity from Dominion.

{¶ 3} Dominion filed its application on April 8, 2005, proposing to restructure its obligation to secure gas and to expand retail choice options for its customers in two phases. Natural gas companies make their rate of return on the distribution of natural gas, not on the buying and selling of the commodity. The regulatory system is designed to pass the cost of the natural gas to consumers. Pursuant to R.C. 4905.302, rates charged by natural gas companies can adjust to ensure that the company recovers only the price it reasonably paid to acquire the natural gas it distributes to its customers.

{¶ 4} Phase 1 of Dominion’s application proposed an interim wholesale model by which Dominion would continue to provide commodity service for a pilot period using an auction process to obtain its wholesale gas supplies. Dominion [209]*209would remain the supplier and would retain provider-of-last-resort (“POLR”) responsibilities in case any of Dominion’s competitors default on the obligation to provide gas to customers.

{¶ 5} Phase 2 of the plan remains undeveloped, but Dominion’s stated goal is to transfer any remaining customers served by Dominion’s standard service offer to competitive suppliers at the end of Phase 2. Dominion will then place the customer in a direct business relationship with the supplier instead of with Dominion, which will retain only minimal POLR responsibility.

{¶ 6} The PUCO sought public comments on Phase 1 of Dominion’s proposal. After reviewing the comments, the PUCO determined that Dominion’s request amounted to a request for an exemption from the gas purchasing review process specified in R.C. 4905.302. In order to look at the request in greater detail, the PUCO elected to treat Dominion’s tariff change application as an application for an exemption under R.C. 4929.04, which sets forth the conditions for exemption of natural gas companies from certain rate provisions. The granting of an exemption from these regulatory requirements under R.C. 4929.04(A) requires notice of the request, public comments, and a hearing. Under this provision, the PUCO can exempt a natural gas company’s commodity sales service or other ancillary service from a myriad of regulations, including R.C. 4905.302, which addresses how natural gas companies adjust their rates.

{¶ 7} The PUCO limited its review to Phase 1 of Dominion’s application. The parties to the proceeding, including OPAE, filed testimony, and the PUCO held an evidentiary hearing on December 6 and 7, 2005. On the second day of the hearing, Dominion entered into a stipulation with the Ohio Oil and Gas Association and the participating gas supplier groups. The stipulation modified the proposed auction process by reallocating the charge for choice-related customer education costs from consumers to suppliers.

{¶ 8} The commission determined that the record supported granting Dominion an exemption from R.C. 4905.302. In re Application of E. Ohio Gas Co. for Approval of Plan to Restructure Its Commodity Serv. Function (May 26, 2006), PUCO No. 05-474-GA-ATA. The PUCO decision established a bid process to determine the retail price adjustment. The adjustment is to be added to the New York Mercantile Exchange price of natural gas to produce the standard service offer price. The PUCO established a range of $2.196/Mcf to $2.504/Mcf1 as a reasonable result for the adjustment from the auction.

{¶ 9} On August 29, 2006, Dominion held the auction to determine the standard service offer as approved by the PUCO. The auction resulted in a retail price [210]*210adjustment of price of $1.44/Mcf — well below the commission’s expectation. The commission approved the $1.44/Mcf adjustment to be added to the market price of natural gas to make up the standard service offer and authorized Dominion to contract with successful bidders.

Standard of Review

{¶ 10} “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.” Constellation NewEnergy, Inc. v. Pub. Util. Comm., 104 Ohio St.3d 530, 2004-Ohio-6767, 820 N.E.2d 885, ¶ 50. The 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 commission’s decision was not manifestly against the weight of the evidence and was not so clearly unsupported by the record as to show misapprehension, mistake, or willful disregard of duty. Monongahela Power Co. v. Pub. Util. Comm., 104 Ohio St.3d 571, 2004-Ohio-6896, 820 N.E.2d 921, ¶ 29, citing AT&T Communications of Ohio, Inc. v. Pub. Util. Comm. (2000), 88 Ohio St.3d 549, 555, 728 N.E.2d 371. The appellant bears the burden of demonstrating that the PUCO’s decision is against the manifest weight of the evidence or is clearly unsupported by the record. Id. The court will also not reverse a commission order absent an appellant showing that it is harmed or prejudiced by the order. Myers v. Pub. Util. Comm. (1992), 64 Ohio St.3d 299, 302, 595 N.E.2d 873.

{¶ 11} Although we have “complete and independent power of review as to all questions of law” in appeals from the PUCO, Ohio Edison Co. v. Pub. Util. Comm. (1997), 78 Ohio St.3d 466, 469, 678 N.E.2d 922, we may rely on the expertise of a state agency in interpreting a law when “highly specialized issues” are involved and “where agency expertise would, therefore, be of assistance in discerning the presumed intent of our General Assembly.” Office of Consumers’ Counsel v. Pub. Util. Comm. (1979), 58 Ohio St.2d 108, 110, 12 O.O.3d 115, 388 N.E.2d 1370.

Proposition of Law No. 1

{¶ 12} In the first proposition of law, OPAE alleges that the granting of the application was unlawful due to errors in the format of Dominion’s application, and it attacks the adequacy of the process based on deviations from administrative rules in the underlying proceeding.

{¶ 13} Dominion filed its application with the PUCO as a tariff revision to change the method it used to purchase natural gas for its distribution customers. A tariff revision does not trigger the mandatory review process that a request for an exemption requires.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
115 Ohio St. 3d 208, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ohio-partners-for-affordable-energy-v-public-utilities-commission-ohio-2007.