Ohio Supreme Court/Public Utilities ruling

The Ohio Supreme Court unanimously ruled Tuesday that the Public Utilities Commission of Ohio acted "reasonably and lawfully" in restructuring gas distribution rates for customers of Duke Energy and Dominion East Ohio. ( Text of Decision )

"Prior to 2008," the Court's summary said, "the rate formulas approved by the PUCO for Duke and Dominion East Ohio required the utilities to recover a relatively small percentage of their distribution costs through a flat monthly charge assessed on each customer, and to recover the remainder of their distribution costs via a surcharge on each cubic foot of gas used by a customer during the billing period. In 2008 orders, the PUCO authorized Duke and Dominion East Ohio to adopt a new 'Straight Fixed Variable' (SFV) rate design for recovery of their distribution costs. Under the SFV rate structure, the utility companies were authorized to significantly increase the flat monthly distribution fee charged to each customer, and significantly decrease the distribution-related surcharge on each cubic foot of gas used." The Commission's rate changes were challenged on several points, asserting that it acted "unreasonably and/or unlawfully" in approving new rate structures. The Court found that the "burden of showing that the commission's orders in these cases are unlawful or unreasonable, or that the rate-making process itself was unlawfully carried out., was not able to be substantiated.

Citing City of Columbus v. Ohio Pub. Util. Commission (1984), the Court held that "where a statute does not prescribe a particular formula, the PUCO is vested with broad discretion. The General Assembly left it to the commission to determine how best to carry out the state's policy goals in R.C. 4929.02(A)(4) and 4905.70."