Industrial Energy Consumers v. Pub. Util. Comm., 90-1576

• Decision Date: 05 February 1992
• Docket Number: No. 90-1576,90-1576
• Citation: 62 Ohio St.3d 440,584 N.E.2d 653
• Parties: , Util. L. Rep. P 26,249 INDUSTRIAL ENERGY CONSUMERS, Appellant, v. PUBLIC UTILITIES COMMISSION OF OHIO, Appellee.
• Court: Ohio Supreme Court

Page 440

62 Ohio St.3d 440

584 N.E.2d 653, Util. L. Rep. P 26,249

INDUSTRIAL ENERGY CONSUMERS, Appellant, v. PUBLIC UTILITIES COMMISSION OF OHIO, Appellee.

No. 90-1576.

Supreme Court of Ohio.

Submitted June 5, 1991.

Decided Feb. 5, 1992.

Bell & Bentine Co., L.P.A., Langdon D. Bell, Barth E. Royer and Judith B. Sanders, for appellant.

Lee I. Fisher, Attorney General, James B. Gainer, Duane W. Luckey and Anne L. Hammerstein, for appellee.

Kerry Bruce, for intervening appellee, City of Toledo.

William A. Spratley, Consumers' Counsel, Joseph P. Serio and Evelyn R. Robinson-McGriff, for intervening appellee, Office of Consumers' Counsel.

PER CURIAM.

Appellant, Industrial Energy Consumers, first argues that the general service rate cases and the commission's self-initiated investigation into the special contract rates are separate proceedings which cannot be combined. Appellant claims that, because R.C. 4909.15(A)(1) and (D) refer to ratemaking in the context of the "service for which rates are to be fixed and determined" and "the service rendered," the general service rates in the rate proceeding must be based only on the cost to serve general service customers, that applying the excess revenues to satisfy the cost of serving general service customers would make the general service rates dependent on factors unrelated to cost, and that the excess revenues identified in the commission's investigation may only be used to reduce the special contract rates from which they were derived. Appellant claims that this rate reduction must be accomplished via the R.C. 4909.15 ratemaking formula. Accordingly, appellant asserts that the commission exceeded its statutory authority by combining the two proceedings and using the excess revenues generated by one rate to decrease the general service revenue requirement related to another rate. The commission argues that R.C. 4909.15 permits it to combine the proceedings and to set rates based upon total company revenues in order to assure that the rates set for the general service customers do not provide the company with a rate of return on its entire operations greater than the 10.55 percent that the commission has authorized. R.C. 4909.15(D) states in part:

"When the public utilities commission is of the opinion, after hearing and after making the determinations under divisions (A) and (B) of this section [i.e., after computing the company's revenue requirement by the statutory formula], that any rate * * * [or] charge * * * will be * * * unreasonable * * *, the commission shall:

" * * *

"(2) With due regard to all such other matters as are proper, according to the facts in each case,

" * * * "(b) * * * [F]ix and determine the just and reasonable rate * * * to be * * * charged * * * for the performance or rendition of the service that will provide the public utility the allowable gross annual revenues under division (B) of this section, and order such just and reasonable rate * * * to be substituted for the existing one. * * * " (Emphasis added.)

With regard to Columbia's five applications for an increase in general service rates, the commission found that Columbia's proposed general service rates for the five regions combined would produce a return (13.77 percent) that would exceed the 10.55 percent rate of return that the commission found reasonable in these cases. Accordingly, it fixed rates pursuant to R.C. 4909.15(D) that would afford the company the opportunity to earn a 10.55 percent rate of return. In doing so, it regarded the special contract revenues as "other matters" affecting the general service rates and revenue requirement. We agree that the statute permitted this...