Cincinnati must pay Duke Energy's relocation costs for streetcar project, rules Ohio court

A Hamilton County Common Pleas judge ruled on Tuesday that the City of Cincinnati must pay the costs for moving Duke energy's lines when building the infrastructure for the streetcar, according to an article in the Cincinnati Business Courier. In his decision granting summary judgment to Duke Energy, Judge Stich found that in order for Duke to be responsible for the costs of moving the lines the project would need to "bear a substantial relation to the public health, safety, morals or general welfare." The judge found that the streetcar project served the proprietary function of economic development and did not meet these requirements, which would have forced Duke to absorb the costs.

The Business Courier reports that Stich relied on precedent from a 1955 Ohio Supreme Court case, Speeth v. Carney, which held that transit systems owned by the government, such as the streetcar, serve a proprietary function and not a government one. Judge Stich wrote, "If the government is obligated to pay utility relocation costs resulting from construction of a proprietary public utility, and if a public transit system is a proprietary utility, then the City is obligated to pay Duke's relocation expenses resulting from construction of the streetcar."

The Judge also rejected the City's argument that expired franchise agreements with Duke Energy's predecessors made Duke responsible for relocation costs, holding that if the parties had wished to continue with franchise agreements to govern their relationship they could have entered new ones or extended existing ones when they expired. Additionally, the Judge found that the expired agreements did not contain language about relocation costs and thus wouldn't have impacted the case.

The City plans to appeal the decision. Former City Solicitor John Curp supported the City's position in a later interview with the Business Courier, stating that the Speeth case was "an anachronism to a bygone era where private companies ran public transportation," and that, "No one mistakes public transportation as a proprietary, money-making venture." Curp cautioned that continued reliance on the case could be problematic for many government endeavors, stating, "Nearly every government project is justified as an economic development project. If applied more broadly, this decision could add significant costs to local government infrastructure projects."

The Business Courier reports that the additional costs for the project will be $15 million, which the City already has in an escrow account set aside for this issue.

For more information about the case, see the case history from the Clerk's office, here.