Ohio Mfrs. Ass'n v. Public Utilities Commission, 75-971

• Decision Date: 12 May 1976
• Docket Number: No. 75-971,75-971
• Citation: 346 N.E.2d 770,46 Ohio St.2d 214
• Parties: , 75 O.O.2d 245 The OHIO MANUFACTURERS' ASSOCIATION, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio et al., Appellees.
• Court: Ohio Supreme Court

Page 214

46 Ohio St.2d 214

346 N.E.2d 770, 75 O.O.2d 245

The OHIO MANUFACTURERS' ASSOCIATION, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio et al., Appellees.

No. 75-971.

Supreme Court of Ohio.

May 12, 1976.

Syllabus by the Court

In the absence of express statutory authority, the Public Utilities Commission is without power to authorize a public utility to levy monetary penalties against its consumers.

This cause arises out of proceedings before the Public Utilities Commission (commission) commenced in 1971 to study the shortage of natural gas. See Ohio Manufacturers' Assn. v. Pub. Util. Comm. (1976), 45 Ohio St.2d 86, 341 N.E.2d 585.

The Dayton Power & Light Company (Dayton Power,) an appellee herein, is a public utility which distributes natural gas to certain Ohio consumers. Dayton Power's principal supplier of natural gas is the Columbia Gas Transmission Corporation (Columbia) which is subject to regulation by the Federal Power Commission (FPC). Pursuant to Columbia's curtailment plan, approved by the FPC, Dayton Power is subject to monetary penalties of $10 per Mcf (1,000 cubic feet) for gas taken from Columbia in excess of its authorized volumes under Columbia's curtailment plan. As a result of curtailment by Columbia, Dayton Power was not able to supply the gas requirements of all its consumers and therefore requested the commission to approve an interim plan for management of available gas supplies (interim curtailment plan).

The interim curtailment plan contains a penalty provision which is designed to deter consumers from exceeding their gas allocations.

The Ohio Manufacturers' Association (OMA), appellant herein, intervened on behalf of all manufacturing concerns served by Dayton Power and argued, inter alia, that the commission lacks authority to confer upon a public utility the power to impose monetary penalties upon tis customers. The OMA argued further that the plan's scheme of redistributing excess penalties as a rebate amoung all nondomestic customers violated the laws of Ohio prohibiting rate discrimination and rebates.

By its interim order of June 20, 1975, the commission rejected OMA's arguments and allowed Dayton Power to implement its proposed curtailment plan, including the monetary penalties and the rebate of excess penalties. An application for rehearing was denied, and OMA appealed to this court, raising two questions of law: (1) Does the commission possess the statutory authority to allow a public utility to levy monetary penalties against its customers? and (2) if so, may the commission allow a public utility to collect excess penalties from one group of customers and to redistribute such excess as a rebate among a larger class of customers?

Vorys, Sater, Seymour & Pease and Sheldon A. Taft, Columbus, for appellant.

William J. Brown, Atty. Gen., Charles S. Rawlings and Mr. Cheryl K. Hachman, Columbus, for appellee Public Utilities Commission.

J. R. Newlin, W. E. Herron and S. F. Koziar, Dayton, for appellee Dayton Power & Light Co.

WILLIAM B. BROWN, Justice.

The determinative question presented is whether the Public Utilities Commission may authorize a public utility to levy a monetary penalty against its consumers.

The commission's position is stated in the following portion of an order which denied a rehearing to Dayton Flexible Products Division of Baxter Laboratories in the instant matter:

'* * * While that statute (R.C. 4909.16 ¹) does not specifically state that the commission shall have the authority to levy penalties for consumption overruns or to delegate that authority, it seems repugnant to the spirit and purpose of that provision to allow the commission to declare an emergency and yet not be able to take whatever reasonable measures it deems necessary in order to alleviate that emergency. Applicant does not argue that enforcement provisions are not reasonably necessary to make the plan effective. * * * It merely asserts that penalties, per se, are unlawful and unreasonable. * * * It is important to note that the end sought here is the conservation of gas, a reasonable governmental purpose; the commission is of the opinion that penalty imposition will serve that end. Contrary to what some of the intervening parties contended, there is no intent to provide some form of civil or criminal punishment similar in nature to that provided by Sections 4905.54-56, 4909.41-99 Revised Code. A plan without adequate enforcement provisions would be meaningless.'

The basic function of the commission is to 'supervise and regulate public utilities and railroads.' R.C. 4905.04. 'The jurisdiction, supervision, powers, and duties, of the Public Utilities Commission extend to every public utility and railroad * * *.' R.C. 4905.05, R.C. 4905.54 through 4905.57 impose monetary penalties ('forfeitures') against 'every public utility or railroad' which violates a commission edict, and authorize the Attorney General to enforce such penalties.

Although the foregoing regulatory powers are broad, the General Assembly has granted no such power to the commission for the regulation of consumers.

Despite the fact that the commission possesses no power or authority except that conferred and vested in it by statute ² and no statute authorizes the commission to delegate to a public utility the power to penalize a consumer, appellees urge this court to affirm the subject order.

We must...