Ohio Supreme Court Upholds PUCO Decision On Customer Charges For Older Coal Plants

The Supreme Court of Ohio has upheld a Public Utilities Commission of Ohio decision involving customer charges tied to the operation of two older coal fired power plants.

The case centered on a claim that consumers overpaid $74.5 million for the operation of two coal fired plants partially owned by Ohio Power Company, also known as AEP Ohio. The plants, operated through the Ohio Valley Electric Corporation, lost money on electricity generation in 2018 and 2019.

In a unanimous opinion, the Supreme Court affirmed PUCO’s audit findings for the purchase power agreement rider. That rider allowed AEP Ohio to be reimbursed for its share of operating expenses connected to the Ohio Valley Electric Corporation.

Writing for the Court, Justice Patrick F. Fischer said the main issue was PUCO’s approval of a “must run strategy” at the two 1950s era plants. Under that strategy, the plants continued operating even when the cost of generating electricity was higher than the market price utilities were paying for power.

Those challenging the rider argued the strategy was not prudent and that OVEC operators, not consumers, should have absorbed the costs.

The Court said PUCO was presented with conflicting evidence about whether the strategy was prudent. Justice Fischer wrote that some evidence showed not using the must run strategy could have been costly to customers.

The Court found PUCO’s decision was not unlawful or unreasonable and did not amount to reversible error.

Chief Justice Sharon L. Kennedy and Justices R. Patrick DeWine, Jennifer Brunner, Daniel R. Hawkins, and Megan E. Shanahan joined Fischer’s opinion. Ninth District Court of Appeals Judge Jennifer Hensal, sitting for Justice Joseph T. Deters, also joined the opinion.