In re Complaint of Reynoldsburg

[Cite as In re Complaint of Reynoldsburg, 134 Ohio St.3d 29, 2012-Ohio-5270.]

IN RE COMPLAINT OF CITY OF REYNOLDSBURG, APPELLANT; COLUMBUS

SOUTHERN POWER COMPANY, INTERVENING APPELLEE; PUBLIC UTILITIES

COMMISSION OF OHIO, APPELLEE.

[Cite as In re Complaint of Reynoldsburg,

134 Ohio St.3d 29, 2012-Ohio-5270.]

Public utilities—Municipal home rule—Ohio Constitution, Article XVIII, Section

3—Electric company’s tariff prevails over ordinance requiring company

to pay costs of relocating electric lines underground.

(No. 2011-1274—Submitted September 12, 2012—Decided November 15, 2012.)

APPEAL from the Public Utilities Commission of Ohio, No. 08-0846-EL-CSS.

__________________

O’DONNELL, J.

SUMMARY

{¶ 1} The city of Reynoldsburg is a municipal corporation governed by a

charter. Intervening appellee, Columbus Southern Power Company (“CSP”), is a

public utility under R.C. 4905.02 and provides electric power to Reynoldsburg

and its residents.

{¶ 2} The issue in this case is whether Reynoldsburg or CSP bears the cost

to relocate overhead power lines underground. Specifically, Reynoldsburg seeks

a ruling that its right-of-way ordinance requiring all overhead power lines to be

relocated underground takes precedence over CSP’s commission-approved tariff

in this particular aspect. Reynoldsburg City Code 907.06(A)(4) requires any

public utility to relocate its facilities located within the city’s public rights of way

underground at the “sole cost” of the public utility if the city’s public-service

director determines that the relocation is reasonable and part of a local

improvement project. In contrast, Section 17 of CSP’s tariff provides that

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municipalities shall pay the costs whenever they require CSP to relocate overhead

electrical distribution lines underground.

{¶ 3} Reynoldsburg filed a complaint with the Public Utilities

Commission (“PUCO”) pursuant to R.C. 4905.26, contending that its ordinance

superseded CSP’s tariff and that the tariff was unjust, unreasonable, and unlawful.

The commission found in favor of CSP.

{¶ 4} Reynoldsburg appealed that decision to this court, raising six

propositions of law. After review, we affirm the commission’s orders.

BACKGROUND

{¶ 5} In 1992, the commission approved a tariff as part of CSP’s last

general rate case. Section 17 of CSP’s tariff provides that municipalities and

other public authorities must pay the cost of requiring CSP to relocate overhead

electric distribution lines underground. See In re Application of Columbus S.

Power Co. for Authority to Amend Its Filed Tariffs to Increase Rates & Charges

for Elec. Serv., Pub. Util. Comm. No. 91-418-EL-AIR, 1992 WL 205335 (May

12, 1992).

{¶ 6} On April 24, 2000, the Reynoldsburg City Council passed an

ordinance granting a five-year nonexclusive franchise to CSP to construct,

maintain, and operate lines for distribution and transmission of electricity in, over,

under, and through the streets, avenues, alleys, and public places of the city. The

franchise agreement expired on April 24, 2005, but CSP continued to operate its

facilities in the city’s rights of way.

{¶ 7} In the early 2000s, Reynoldsburg began a comprehensive project to

revitalize its commercial corridors. The project was known as the Reynoldsburg

Major Commercial Corridors Revitalization Project or “Main Street Project.” The

city’s project plans included the building of an underground utility duct and the

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relocation of overhead utility lines into the underground duct. The first phase of

the Main Street Project began in 2003. Phase II of the project began in 2005.

{¶ 8} In October 2004, the city applied for a community-development

grant from Franklin County in conjunction with Phase II of the project. The

application represented that the existing overhead electric lines in the right of way

would be removed and placed underground.

{¶ 9} On May 9, 2005, two weeks after the expiration of CSP’s right-of-

way franchise, the Reynoldsburg City Council passed an ordinance “To Enact a

Comprehensive Right of Way Management Policy.” Reynoldsburg City Code

907.06(A)(4), enacted by the ordinance, authorized the city’s public-service

director to designate portions of the city’s right of way as being suitable for

underground utility facilities and to require any utility that had facilities located

within the city’s public rights of way to relocate those facilities underground at

the utility’s “sole cost.” Reynoldsburg City Code, Section 907.06(A)(4).

{¶ 10} On July 8, 2005, Reynoldsburg Public Service Director Sharon L.

Reichard notified CSP by letter that the city intended to begin construction of

Phase II of the Main Street Project. Reichard, citing her authority under the right-

of-way ordinance, ordered CSP to relocate its “facilities within the public right of

way of the Project into the underground duct bank.” According to that letter, the

city designated that the portion of the public right of way within the construction

project would “accommodate only utility facilities located underground.” Relying

on its approved tariff, CSP refused to pay the relocation costs and informed

Reynoldsburg that the city bore responsibility for the cost of burying the overhead

lines.

{¶ 11} On November 1, 2005, Reynoldsburg entered into a letter

agreement with CSP in order not to delay the Main Street Project. Pursuant to the

agreement, Reynoldsburg agreed to conditionally pay the estimated cost for CSP

to move the lines underground—in an amount not to exceed $1,185,535—and

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CSP agreed to relocate its facilities. The parties further agreed that the dispute

over the ultimate liability for the costs would be resolved in an appropriate forum.

{¶ 12} In July 2006, Reynoldsburg filed a complaint for a declaratory

judgment in the Franklin County Court of Common Pleas. Case No. 06-CVH-07-

8792. Reynoldsburg sought a declaration that CSP had a legal obligation to

relocate its overhead lines at its sole cost and that Reynoldsburg was entitled to

reimbursement of its costs in accordance with the parties’ agreement. CSP moved

to dismiss for lack of subject-matter jurisdiction, contending that the Public

Utilities Commission had exclusive jurisdiction over the matter. The trial court

denied CSP’s motion. See State ex rel. Columbus S. Power Co. v. Fais, 117 Ohio

St.3d 340, 2008-Ohio-849, 884 N.E.2d 1, ¶ 11-12.

{¶ 13} CSP then sought a writ of prohibition in this court to prevent the

trial court from proceeding on the declaratory-judgment action. We granted a

writ of prohibition, finding that the common pleas court lacked jurisdiction and

that the commission had exclusive, original jurisdiction over the matter.

{¶ 14} In July 2008, Reynoldsburg filed a complaint with the commission

pursuant to R.C. 4905.26, alleging that CSP’s tariff was unjust, unreasonable,

discriminatory, and/or unlawful. Specifically, the city alleged that (1) the tariff

did not apply to Reynoldsburg, (2) the city’s right-of-way ordinance superseded

the tariff, and (3) the tariff violated the Ohio Constitution, Article XVIII, Sections

3 and 4.

{¶ 15} On April 5, 2011, the commission issued its order denying

Reynoldsburg’s complaint. The commission found that (1) CSP’s tariff applied to

Reynoldsburg under the facts of the case, (2) under the tariff, the city is

responsible for the entire cost of relocating the electric lines, and (3) the tariff is

just and reasonable in that it helps to ensure that CSP and its ratepayers do not

incur the expense of relocating facilities underground upon the request of a

municipality and is consistent with the principle that the cost-causer be the cost-

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payer. The commission did not render any ruling with respect to Reynoldsburg’s

constitutional claims.

{¶ 16} Reynoldsburg timely filed an application for rehearing, which the

commission denied.

{¶ 17} Reynoldsburg now appeals to this court.

STANDARD OF REVIEW

{¶ 18} “R.C. 4903.13 provides that a PUCO order shall be reversed,

vacated, or modified by this court only when, upon consideration of the record,

the court finds the order to be unlawful or unreasonable.” Constellation

NewEnergy, Inc. v. Pub. Util. Comm., 104 Ohio St.3d 530, 2004-Ohio-6767, 820

N.E.2d 885, ¶ 50. We will not reverse or modify a PUCO decision as to questions

of fact if the record contains sufficient probative evidence to show that the

commission’s decision was not manifestly against the weight of the evidence and

was not so clearly unsupported by the record as to show misapprehension,

mistake, or willful disregard of duty. Monongahela Power Co. v. Pub. Util.

Comm., 104 Ohio St.3d 571, 2004-Ohio-6896, 820 N.E.2d 921, ¶ 29. The

appellant bears the burden of demonstrating that the PUCO’s decision is against

the manifest weight of the evidence or is clearly unsupported by the record. Id.

{¶ 19} Although this court has “complete and independent power of

review as to all questions of law” in appeals from the PUCO, Ohio Edison Co. v.

Pub. Util. Comm., 78 Ohio St.3d 466, 469, 678 N.E.2d 922 (1997), we may rely

on the expertise of a state agency in interpreting a law where “highly specialized

issues” are involved and “where agency expertise would, therefore, be of

assistance in discerning the presumed intent of our General Assembly.”

Consumers’ Counsel v. Pub. Util. Comm., 58 Ohio St.2d 108, 110, 388 N.E.2d

1370 (1979).

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DISCUSSION

{¶ 20} Reynoldsburg challenges CSP’s tariff on the grounds that it is

unjust, unreasonable, and unlawful. Section 17 of the tariff provides that if a

municipality requires overhead distribution lines to be relocated underground, the

municipality is required to pay CSP’s costs to bury the lines. Reynoldsburg

contends that this cost provision usurps the city’s authority to regulate its public

right of way, because it believes that its right-of-way ordinance—which requires

the utility to pay the cost to move overhead electric lines underground—controls

over the cost provision of the tariff.

Home Rule

{¶ 21} The Ohio Constitution, Article XVIII, Section 3, commonly known

as the Home Rule Amendment, authorizes municipalities “to exercise all powers

of local self-government and to adopt and enforce within their limits such local

police, sanitary and other similar regulations, as are not in conflict with general

laws.” In Ohio Assn. of Private Detective Agencies, Inc. v. N. Olmsted, 65 Ohio

St.3d 242, 244, 602 N.E.2d 1147 (1992), we explained that the words “as are not

in conflict with general laws” modify the words “local police, sanitary and other

similar regulations” but do not modify the words “powers of local self-

government.”

{¶ 22} Reynoldsburg claims that CSP’s tariff violates the Home Rule

Amendment because it infringes on the city’s “powers of local self-government,”

as opposed to its police powers, and it urges that municipal powers of local self-

government include the power to regulate the public ways. Reynoldsburg further

asserts that its right-of-way ordinance relates solely to matters of local self-

government because it regulates only the use and occupancy of the public ways,

and it contends that CSP’s tariff therefore cannot prevail over its ordinance

because “only regulations enacted under a municipality’s police power can be

scrutinized for conflicting with ‘general law.’ ”

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{¶ 23} Alternatively, Reynoldsburg argues that the right-of-way ordinance

should prevail over the tariff because it is a valid exercise of the city’s local police

powers.

{¶ 24} This court has applied a three-step process for home-rule analysis.

The first step is to determine whether the ordinance involves an exercise of local

self-government or an exercise of local police power. If the ordinance relates

solely to self-government, the analysis ends because the Constitution authorizes a

municipality to exercise all powers of local self-government within its

jurisdiction. The second step, which becomes necessary only if the local

ordinance is an exercise of the police power, requires a review of the state statute

to determine whether it is a general law under the court’s four-part test announced

in Canton v. State, 95 Ohio St.3d 149, 2002-Ohio-2005, 766 N.E.2d 963,

syllabus. If the statute qualifies as a general law under this test, the final step is

undertaken to determine if the ordinance is in conflict with the statute. Am. Fin.

Servs. Assn. v. Cleveland, 112 Ohio St.3d 170, 2006-Ohio-6043, 858 N.E.2d 776,

¶ 23-24; Marich v. Bob Bennett Constr. Co., 116 Ohio St.3d 553, 2008-Ohio-92,

880 N.E.2d 906, ¶ 9, 16.

Local Self-Government or Local Police Power

{¶ 25} “An ordinance created under the power of local self-government

must relate ‘solely to the government and administration of the internal affairs of

the municipality.’ ” Id. at ¶ 11, quoting Beachwood v. Cuyahoga Cty. Bd. of

Elections, 167 Ohio St. 369, 148 N.E.2d 921 (1958), paragraph one of the

syllabus. Conversely, “the police power allows municipalities to enact

regulations only to protect the public health, safety, or morals, or general welfare

of the public.” Id., citing Downing v. Cook, 69 Ohio St.2d 149, 150, 431 N.E.2d

995 (1982).

{¶ 26} Reynoldsburg’s right-of-way ordinance is set forth in Chapter 907

of the Reynoldsburg City Code. Section 907.06(A)(4) gives the city’s public-

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service director discretion to order utilities—solely at their expense—to “remove”

or “rearrange” utility facilities located in the right of way. As part of the

director’s determination to remove or rearrange facilities and “to the extent

permitted by Ohio law,” the director also has the authority—again, solely at the

expense of the utility—to determine that “designated portions of its Rights-of-

Way should accommodate only underground facilities * * *, provided that such

determination is reasonable and a part of an overall improvement or beautification

plan or project.”

{¶ 27} Reynoldsburg asserts that its ordinance relates solely to matters of

local self-government because “[by] its terms,” it regulates the use and occupancy

of the city’s public ways and “[n]early one hundred years of Ohio case law holds

that municipal regulation of public ways is a power of local self-government.” It

argues that because the ordinance regulates only the public right of way—a matter

of local self-government—the home-rule analysis ends because CSP’s tariff

cannot infringe upon the city’s powers of local self-government. However, the

premise of its argument is not supported in this record.

{¶ 28} Reynoldsburg claims that the terms of the ordinance support its

contention that the ordinance relates solely to matters of local self-government.

Yet it failed to develop its contention beyond its assertion. We therefore reject

this argument. See, e.g., In re Application of Columbus S. Power Co., 129 Ohio

St.3d 271, 2011-Ohio-2638, 951 N.E.2d 751, ¶ 14 (failure to “cite a single legal

authority” or “present an argument that a legal authority applies on these facts and

was violated * * * alone is grounds to reject [a] claim”); Utility Serv. Partners,

Inc. v. Pub. Util. Comm., 124 Ohio St.3d 284, 2009-Ohio-6764, 921 N.E.2d 1038,

¶ 39 (“unsupported legal conclusions” do not establish error).

{¶ 29} Moreover, the language of the ordinance undercuts the city’s claim.

The preamble of the ordinance states that “it is necessary to comprehensively

regulate access to, and structures and facilities in, the Rights-of-Way.” But other

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portions of the preamble show that the city’s intent in regulating the right of way,

at least in part, was to promote “the public health, safety and welfare”—words

more commonly associated with an exercise of the police power. See Downing,

69 Ohio St.2d at 150, 431 N.E.2d 995 (police powers are those that have a real

and substantial relation to the public health, safety, morals, or general welfare);

Froelich v. Cleveland, 99 Ohio St. 376, 386, 124 N.E. 212 (1919) (police powers

are those that concern “peace, health, morals and safety”). Furthermore, the

ordinance also reflects that the city’s purpose in passing it was to regulate

vehicular and pedestrian traffic for the protection of pedestrians and drivers. See

section 3 of the ordinance (“this ordinance is deemed to be an emergency for the

immediate preservation of the public peace, health and safety in that control of the

public right of way that is traversed by pedestrian and vehicular traffic * * *

requires control and regulation to maintain the public peace, health and safety”).

And as we held in Marich, 116 Ohio St.3d 553, 2008-Ohio-92, 880 N.E.2d 906, at

¶ 14, “[i]t is now clear that the regulation of traffic is an exercise of police power

that relates to public health and safety as well as the general welfare of the

public.”

{¶ 30} In addition, evidence offered by the city supports the conclusion

that the ordinance was enacted as an exercise of the police power, and not of local

self-government. Robert McPherson, who served as Reynoldsburg’s mayor

during the Main Street Project, testified about the project.

{¶ 31} First, he identified “public safety” as “one of the primary reasons

[the city] undertook the revitalization project in the first place.” Second, he

related numerous problems the city had experienced before the enactment of the

right-of-way ordinance, including “[tr]affic congestion, parking availability, speed

of traffic along the major arteries, lack of sidewalks or decrepit sidewalks, [and]

* * * lack of design standards for commercial arteries.” According to McPherson,

the city viewed these problems as a “serious safety concern” because of “potential

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injuries to motorists,” as well as an “increasing safety hazard to pedestrians on

Main Street.” Third, his testimony reflects that officials believed that these safety

hazards were caused by the “proliferation of overhead utility lines, wires, and

signage [that] was a distraction to drivers along Main Street.” In his view,

“putting the utility lines underground had the effect of removing a lot of that

distraction so drivers could focus on the road,” which “made the Right of Way

safer for pedestrians as well.” And finally, he stated that the “safety of the Right

of Way for the traveling public, which would include aesthetics insofar as all the

visual clutter could also be a distraction to motorists, was a paramount concern”

in requiring that the power lines be relocated underground.

Billings, Froelich, Perrysburg, and Vernon

{¶ 32} The city cites four cases for the general proposition that “municipal

regulation of public ways is a power of local self-government.” One of the cases,

Froelich v. Cleveland, 99 Ohio St. 376, 124 N.E. 212, was questioned in Marich,

116 Ohio St.3d 553, 2008-Ohio-92, 880 N.E.2d 906, ¶ 13-14 (noting that the

court was divided in Froelich and did not clearly define the municipal police

power). And Vernon v. Warner Amex Cable Communications, 25 Ohio St.3d 117,

495 N.E.2d 374 (1986),1 actually stands for the proposition that regulation of a

cable television company’s distribution network is an exercise of the

municipality’s local police power, not its power of local self-government. The

passage from Vernon quoted in the brief filed by Reynoldsburg is incomplete.

The quote should read: “The foregoing precedents leave no doubt that the

regulation of the use of publicly owned or controlled property is an inherent

exercise of a municipality’s powers of local self-government, which necessarily

include the municipality’s police powers.” (Emphasis added.) Id. at 120. The

1. Warner Cable was not a “public utility” under any statutory definition. The city’s ordinance

designated Warner as a “public utility,” and this court upheld that action as a valid exercise of the

home-rule and local police powers. Id. at 121.

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city omitted the italicized language. With this language included, the import of

the statement in Vernon is clear: municipal regulation of the public ways can be

an exercise of local self-government or an exercise of the local police power.

Vernon undermines Reynoldsburg’s claim that municipal regulation of public

ways is solely an exercise of local self-government.

{¶ 33} As to the remaining cases, Billings v. Cleveland Ry. Co., 92 Ohio

St. 478, 111 N.E. 155 (1915), and Perrysburg v. Ridgway, 108 Ohio St. 245, 140

N.E. 595 (1923), it is unclear how they advance the city’s position. Neither CSP

nor the commission disputes that Reynoldsburg has the authority to regulate its

rights of way, including the authority to order CSP to relocate overhead power

lines in the right of way underground. The dispute here is over whether the city

can impose on CSP the costs of burying the overhead lines. The facts of this case

bear this out. During Phase I of the Main Street Project and before the city

enacted the right-of-way ordinance, Reynoldsburg requested that CSP relocate its

overhead distribution lines in the public right of way underground. CSP relocated

the lines, and Reynoldsburg paid the relocation costs. During Phase II of the

project, Reynoldsburg invoked its newly enacted ordinance to require CSP to

relocate overhead lines into the underground duct bank. Once again, CSP did not

dispute the city’s right to have the overhead power lines placed underground;

rather, CSP challenged only the city’s authority to order CSP to pay the cost of

relocation. Therefore, these cases are irrelevant to resolving this issue.

Extraterritorial Effect of Ordinance

{¶ 34} Citing Kettering v. State Emp. Relations Bd., 26 Ohio St.3d 50, 54,

496 N.E.2d 983 (1986), Reynoldsburg contends that whether an ordinance falls

into the area of local self-government is “determined by examining ‘if the

regulation of the subject matter affects the general public of the state as a whole

more than it does local inhabitants.’ ” (Emphasis added by Reynoldsburg.) The

city answers that question by stating that the ordinance does not have a “sufficient

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extraterritorial effect * * * to push the regulation out of the realm of powers of

local self-government and into the realm of police powers.” Reynoldsburg’s

partial quotation from Kettering gives a misleading impression of what the case

stands for and distorts the holding of that case. The Kettering court was

explaining the statewide-concern doctrine. Id. at 53-55. The entire statement is as

follows:

{¶ 35} “ ‘Thus, even if there is a matter of local concern involved, if the

regulation of the subject matter affects the general public of the state as a whole

more than it does the local inhabitants the matter passes from what was a matter

for local government to a matter of general state interest.’ ” (Emphasis deleted in

part.) Id. at 54, quoting Cleveland Elec. Illum. Co. v. Painesville, 15 Ohio St.2d

125, 129, 239 N.E.2d 75 (1968).

{¶ 36} Contrary to Reynoldsburg’s assertion, this statement is not a test to

determine whether the regulation is a matter of local concern in the first instance.

The city quoted only part of the statement, omitting the italicized portion of the

quotation. When the entire statement is read, the meaning becomes clear: even if

the regulation is a matter of local concern, the state may still invalidate the

regulation if it has a greater effect on those living outside the local municipality.

See State ex rel. Evans v. Moore, 69 Ohio St.2d 88, 89-90, 431 N.E.2d 311 (1982)

(“It is a fundamental principle of Ohio law that, pursuant to the ‘statewide

concern’ doctrine, a municipality may not, in the regulation of local matters,

infringe on matters of general and statewide concern”); Cleveland Elec. Illum. Co.

v. Painesville, 15 Ohio St.2d at 129, 239 N.E.2d 75; State ex rel. Gordon v.

Rhodes, 156 Ohio St. 81, 90, 100 N.E.2d 225 (1951). See also Dublin v. State,

118 Ohio Misc.2d 18, 47-48, 769 N.E.2d 436 (2002).

{¶ 37} In the end, Reynoldsburg’s claim that the ordinance is an exercise

of its powers of local self-government fails. The city has offered nothing to

support its claim. Moreover, the record amply demonstrates that Reynoldsburg’s

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ordinance was enacted as an exercise of the municipality’s police powers, not as

an exercise of local self-government. Therefore, the city’s ordinance can be

invalidated if it conflicts with the general laws of this state.

General-Law Test

{¶ 38} The next step is to determine whether the statute at issue is a

general law. We use a four-part test to determine whether a statute is a general

law: “To constitute a general law for purposes of home-rule analysis, a statute

must (1) be part of a statewide and comprehensive legislative enactment, (2)

apply to all parts of the state alike and operate uniformly throughout the state, (3)

set forth police, sanitary, or similar regulations, rather than purport only to grant

or limit legislative power of a municipal corporation to set forth police, sanitary,

or similar regulations, and (4) prescribe a rule of conduct upon citizens

generally.” Canton v. State, 95 Ohio St.3d 149, 2002-Ohio-2005, 766 N.E.2d

963, syllabus.

{¶ 39} As a preliminary matter, Reynoldsburg argues that under the

Canton test, CSP’s tariff is not a general law, because the tariff was not passed by

the General Assembly. While this is true, tariffs do not exist in a vacuum and

cannot be divorced from the statutes that authorize them, and they should be

viewed in the context of the commission’s ratemaking authority set forth in R.C.

Title 49.

{¶ 40} The General Assembly has given the commission statutory

authority to review and approve tariffs. “Public utility tariffs are books or

compilations of printed materials filed by public utilities with, and approved by,

the commission that contain schedules of rates and charges, rules and regulations,

and standards for service.” Migden-Ostrander v. Pub. Util. Comm., 102 Ohio

St.3d 451, 2004-Ohio-3924, 812 N.E.2d 955, ¶ 8, fn. 5. R.C. 4905.22 provides:

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All charges made or demanded for any service rendered, or to be

rendered, shall be just, reasonable, and not more than the charges

allowed by law or by order of the public utilities commission, and

no unjust or unreasonable charge shall be made or demanded for,

or in connection with, any service, or in excess of that allowed by

law or by order of the commission.

Under R.C. 4905.30, all public utilities “shall print and file with the public

utilities commission schedules showing all rates * * * and charges for service of

every kind furnished by it.” And R.C. 4905.32 states: “No public utility shall

charge, demand, exact, receive, or collect a different rate * * * or charge for any

service rendered, or to be rendered, than that applicable to such service as

specified in its schedule filed with the public utilities commission which is in

effect at that time.”

{¶ 41} In Hull v. Columbia Gas of Ohio, 110 Ohio St.3d 96, 2006-Ohio-

3666, 850 N.E.2d 1190, we held that “ ‘it is readily apparent that the General

Assembly has provided for commission oversight of filed tariffs, including the

right to adjudicate complaints involving customer rates and services.’ ” (Emphasis

added.) Id. at ¶ 20, quoting Kazmaier Supermarket, Inc. v. Toledo Edison Co., 61

Ohio St.3d 147, 151, 573 N.E.2d 655 (1991). The principle underlying Ohio’s

regulatory scheme is that utility rates are to be set by the commission upon

hearings and evidence, and only those rates found to be fair and reasonable after

such hearings may be lawfully charged. These approved rates are then set down

in tariff schedules and filed with the commission. See Cleveland Elec. Illum. Co.

v. Pub. Util. Comm., 46 Ohio St.2d 105, 114, 346 N.E.2d 778 (1976). That is,

once approved, a tariff has the same binding effect as a law. See Erie RR. Co. v.

Steinberg, 94 Ohio St. 189, 113 N.E. 814 (1916), syllabus; Anthony Carlin Co. v.

Hines, 107 Ohio St. 328, 140 N.E. 99 (1923), paragraph one of the syllabus;

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Carter v. Am. Tel. & Tel. Co., 365 F.2d 486, 496 (5th Cir.1966). Accordingly, we

will conduct the general-law analysis in view of the pertinent statutes.

Statewide and Comprehensive Legislative Enactment

{¶ 42} The first element of the general-law test requires a determination of

whether the statutes at issue are a part of a statewide and comprehensive

legislative enactment. There is no question that tariff schedules and the statutes

that authorize tariffs are part of a comprehensive statewide enactment concerning

the regulation of public utility rates, charges, and services.

{¶ 43} In Kazmaier Supermarket, we stated:

The General Assembly has created a broad and

comprehensive statutory scheme for regulating the business

activities of public utilities. R.C. Title 49 sets forth a detailed

statutory framework for the regulation of utility service and the

fixation of rates charged by public utilities to their customers. As

part of that scheme, the legislature created the Public Utilities

Commission and empowered it with broad authority to administer

and enforce the provisions of Title 49. The commission may fix,

amend, alter or suspend rates charged by public utilities to their

customers. R.C. 4909.15 and 4909.16. Every public utility in

Ohio is required to file, for commission review and approval, tariff

schedules that detail rates, charges and classifications for every

service offered. R.C. 4905.30. And a utility must charge rates that

are in accordance with tariffs approved by, and on file with, the

commission. R.C. 4905.22.

61 Ohio St.3d at 150, 573 N.E.2d 655. Given this statewide and comprehensive

scheme, the first element of the Canton test is met.

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Uniform Application

{¶ 44} The second element of the Canton test provides that in order to be

considered a general law, a statute must apply to all parts of the state and operate

uniformly throughout. Reynoldsburg argues that this prong is not met, because

the tariff applies only to CSP’s service territory.

{¶ 45} The fact that tariffs may vary from territory to territory does not

undermine the uniform operation and statewide application of the tariff statutes or

the tariff itself. See, e.g., Marich, 116 Ohio St.3d 553, 2008-Ohio-92, 880 N.E.2d

906, at ¶ 21. The tariff statutes create a process for approving and enforcing

tariffs that applies uniformly throughout the state. As previously noted, utility

rates and charges are fixed by the commission and set down in tariff schedules, to

which the utility is bound to adhere. Likewise, the utility’s customers cannot pay

a rate or a charge for service that differs from that set forth in the utility’s tariff

filing. See R.C. 4905.22, 4905.30, and 4905.32; Cleveland Elec. Illum. Co. v.

Pub. Util. Comm., 46 Ohio St.2d at 116, 346 N.E.2d 778 (“the only proper rate is

that set out in the approved rate schedule on file with the commission and open to

public inspection, and * * * this schedule can be changed only by order of the

commission”).

{¶ 46} Thus, while utility rates and charges may differ based on the

utility’s service territory, the fact remains that the statutes authorizing tariffs do

not limit “regulation to certain parts of the state”; nor do they “provide different

rules for different areas”; they broadly apply to “to all parts of the state.” Marich,

at ¶ 21. Thus, this element is satisfied.

Police, Sanitary, or Similar Regulations

{¶ 47} The third part of the test mandates that statutes set forth police,

sanitary, or similar regulations instead of merely granting or limiting a

municipality’s power to create such regulations. The statutes creating the Public

Utilities Commission of Ohio and conferring authority upon it to regulate and to

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set rates for the services rendered and commodities furnished by public utilities

are an exercise of the police power by the General Assembly. Cleveland Tel. Co.

v. Cleveland, 98 Ohio St. 358, 121 N.E. 701 (1918), syllabus. See also State ex

rel. Klapp v. Dayton Power & Light Co., 10 Ohio St.2d 14, 225 N.E.2d 230

(1967), paragraph two of the syllabus; State ex rel. Brainard v. McConnaughey,

137 Ohio St. 431, 436, 30 N.E.2d 699 (1940).

{¶ 48} CSP’s tariff “specifies an at-cost price to be charged to any

municipality requiring that [CSP] use its labor and skill to relocate existing

overhead general distribution lines underground.” State ex rel. Columbus S.

Power Co. v. Fais, 117 Ohio St.3d 340, 2008-Ohio-849, 884 N.E.2d 1, ¶ 22. The

costs for relocating overhead electrical lines underground may be “included in the

rates and charges for services broadly defined” in R.C. 4905.22 and 4905.26. Id.

at ¶ 20. Moreover, although the tariff prevents the city from imposing facility-

relocation costs on CSP, neither the tariff nor the tariff statutes grant or limit the

municipality’s legislative police power to enact separate regulations to control and

use the public right of way. Accordingly, this element is satisfied.

Prescribes a Rule of Conduct upon Citizens Generally

{¶ 49} The final prong is that the statute prescribe a rule of conduct upon

citizens generally. The conduct rule created by the tariff statutes is clear: no

public utility may charge a rate for a service or commodity furnished by it unless

that rate is approved by the commission and set down in tariff schedules filed with

the commission. Likewise, the utility’s customers are bound to pay the rate that is

set forth in the utility’s tariff filing. In short, the rule applies to all citizens of this

state and does not exempt any part of the public from its purview. See Marich,

116 Ohio St.3d 553, 2008-Ohio-92, 880 N.E.2d 906, at ¶ 28. The statutes

authorizing tariffs have extensive scope and are an integral part of the state’s

public-utility laws. See, e.g., Mendenhall v. Akron, 117 Ohio St.3d 33, 2008-

Ohio-270, 881 N.E.2d 255, ¶ 24. Therefore, this element is satisfied.

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Conflict Between the State Law and the Ordinance.

{¶ 50} The last part of the test calls for a determination of whether a

conflict exists between state law and the local ordinance. This test requires

consideration of “whether the ordinance permits or licenses that which the statute

forbids and prohibits, and vice versa.” Struthers v. Sokol, 108 Ohio St. 263, 140

N.E.2d 519 (1923), paragraph two of the syllabus. Since the instant concern is

with only the cost provisions of the tariff and the ordinance, we examine only

those provisions. Section 17 of CSP’s tariff requires municipalities and other

public authorities to pay the cost of requiring CSP to relocate overhead electric

utility lines underground; and Reynoldsburg City Code 907.06(A)(4) requires

public utilities to pay the cost to bury overhead power lines. Thus, a conflict

exists between the tariff and the ordinance.

Home-Rule Conclusion

{¶ 51} Reynoldsburg’s right-of-way ordinance is an exercise of the

municipality’s police power, and the cost provision of the ordinance conflicts with

CSP’s commission-approved tariff, a general law. Thus, the cost provision of the

tariff is constitutional and prevails over the conflicting ordinance.

Common-Law Claim

{¶ 52} Reynoldsburg has also asserted a common-law claim under its first

proposition of law, contending that the commission’s order should be reversed

because it is contrary to the longstanding common-law rule requiring utilities to

bear the entire cost of relocating utility lines from the public right of way.

{¶ 53} In accordance with common law, utilities have been required to

relocate power lines from the right of way at their own expense whenever

requested to do so by state or local authorities. See Norfolk Redevelopment &

Hous. Auth. v. Chesapeake & Potomac Tel. Co. of Virginia, 464 U.S. 30, 35, 104

S.Ct. 304, 78 L.Ed.2d 29 (1983); New Orleans Gaslight Co. v. Drainage Comm.

of New Orleans, 197 U.S. 453, 460-462, 25 S.Ct. 471, 49 L.Ed. 831 (1905);

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Columbus Gaslight & Coke Co. v. Columbus, 50 Ohio St. 65, 33 N.E. 292 (1893);

Ganz v. Ohio Postal Tel. Cable Co., 140 F. 692 (6th Cir.1905); Perrysburg v.

Toledo Edison Co., 171 Ohio App.3d 174, 2007-Ohio-1327, 870 N.E.2d 189 (6th

Dist.) (applying the common-law rule when a public utility had asserted an

unlawful taking for forced relocation of utility facilities at the utility’s expense);

AT&T Corp. v. Toledo, 351 F.Supp.2d 744 (N.D.Ohio 2005) (same).

{¶ 54} We lack jurisdiction to address this claim. Reynoldsburg failed to

preserve this issue in its application for rehearing before the commission. R.C.

4903.10 provides that an application for rehearing “shall be in writing and shall

set forth specifically the ground or grounds on which the applicant considers the

order to be unreasonable or unlawful. No party shall in any court urge or rely on

any ground for reversal, vacation, or modification not so set forth in the

application.” We have held that setting forth specific grounds for rehearing is a

jurisdictional prerequisite for our review. Consumers’ Counsel v. Pub. Util.

Comm., 70 Ohio St.3d 244, 247, 638 N.E.2d 550 (1994) (citing cases). See also

Discount Cellular, Inc. v. Pub. Util. Comm., 112 Ohio St.3d 360, 2007-Ohio-53,

859 N.E.2d 957, ¶ 59 (when an appellant’s grounds for rehearing fail to

specifically allege in what respect the PUCO’s order was unreasonable or

unlawful, the requirements of R.C. 4903.10 have not been met).

{¶ 55} In addition, Reynoldsburg failed to set forth this claimed error in its

notice of appeal. R.C. 4903.13 (establishing that the procedure for seeking

reversal of a PUCO order is through a notice of appeal “setting forth the order

appealed from and the errors complained of”); Cincinnati Gas & Elec. Co. v. Pub.

Util. Comm., 103 Ohio St.3d 398, 2004-Ohio-5466, 816 N.E.2d 238, ¶ 21.

Statutory Claims

{¶ 56} Reynoldsburg’s next claims that it has statutory authority to enact

its right-of-way ordinance. Reynoldsburg cites R.C. 4939.01 et seq., 723.01

(recognizing municipal authority to regulate public ways), and 4905.65

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(recognizing municipal authority to regulate use of public ways by public

utilities), and it claims that these statutes bolster its home-rule authority over the

public rights of way.

{¶ 57} We rejected the same argument in Marich, holding that a

municipality needs no statutory grant of authority to control the streets within its

jurisdiction, because it already possesses that power as one of its home-rule

powers. This power comes from the Ohio Constitution, not the General

Assembly. Marich, 116 Ohio St.3d 553, 2008-Ohio-92, 880 N.E.2d 906, at ¶ 8.

{¶ 58} Even were we to accept this argument, Reynoldsburg has not

demonstrated how CSP’s tariff contravenes this statutory authority. As noted

previously, neither CSP nor the commission disputes that Reynoldsburg has

authority to regulate its rights of way, including ordering CSP to bury overhead

power lines located therein. The city offers no express argument or evidence as to

how the cost provision of CSP’s tariff circumvents the city’s authority to regulate

the public right of way. In short, Reynoldsburg has not demonstrated prejudice,

as it must in order to obtain a reversal of a commission order. Indus. Energy

Consumers v. Pub. Util. Comm., 63 Ohio St.3d 551, 553, 589 N.E.2d 1289

(1992).

Burden of Proof

{¶ 59} In support of its third proposition of law, Reynoldsburg argues that

the commission erred when it found that the city “bore the entire burden of proof

with respect to the Complaint case.” Reynoldsburg, citing Ohio Bell Tel. Co. v.

Pub. Util. Comm., 49 Ohio St.3d 123, 126, 551 N.E.2d 145 (1990), states that as

the complainant, it had the initial “burden of establishing a prima facie complaint

case” showing that the tariff was unjust, unreasonable, and unlawful. According

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to the city, pursuant to Ohio Bell,2 once the complainant meets its initial burden—

which Reynoldsburg claims it did in this case—the burden shifted to CSP to

refute the evidence presented by the complainant. The city claims that the

commission’s improper shifting of the burden of proof “reversed the presumption

of validity for legislative enactments” to which its ordinance was entitled.

{¶ 60} We lack jurisdiction to consider this argument because

Reynoldsburg did not raise this issue in its application for rehearing filed with the

commission. See R.C. 4903.10 (requiring appellant to specify error in application

for rehearing). Reynoldsburg made only one “burden of proof” claim on

rehearing. Citing Ohio Bell, the city alleged that it was “not Reynoldsburg’s

burden to demonstrate to the Commission that CSP could have placed its facilities

in private easements; the burden to prove that defense is on CSP.” The arguments

set forth in the city’s brief, however, are not found anywhere in its application for

rehearing.

{¶ 61} “[W]hen an appellant’s grounds for rehearing fail to specifically

allege in what respect the PUCO’s order was unreasonable or unlawful, the

requirements of R.C. 4903.10 have not been met.” Discount Cellular, 112 Ohio

St.3d 360, 2007-Ohio-53, 859 N.E.2d 957, ¶ 59 (citing cases). Moreover, we

have strictly construed the specificity test set forth in R.C. 4903.10. Id. See also

Cincinnati v. Pub. Util. Comm., 151 Ohio St. 353, 378, 86 N.E.2d 10 (1949) (by

using the language set forth in the predecessor of R.C. 4903.10, “the General

Assembly indicated clearly its intention to deny the right to raise a question on

appeal where the appellant’s application for rehearing used a shotgun instead of a

rifle to hit that question”).

2. Reynoldsburg’s page citation to Ohio Bell is to the fact section of the court’s opinion, rather

than to the court’s holding in the case. Because the city failed to preserve this issue for appeal, we

do not address whether the city has properly construed Ohio Bell’s holding.

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{¶ 62} The city also failed to raise its “burden of proof” claim in its notice

of appeal, which also precludes us from considering this argument. Ohio

Partners for Affordable Energy v. Pub. Util. Comm., 115 Ohio St.3d 208, 2007-

Ohio-4790, 874 N.E.2d 764, ¶ 14-18.

Intervention

{¶ 63} The commission approved CSP’s tariff as part of a prior rate case

decided in 1992. See In re Application of Columbus S. Power Co. for Auth. to

Amend Its Filed Tariffs to Increase Rates & Charges for Elec. Serv., Pub. Util.

Comm. No. 91-418-EL-AIR (May 12, 1992). In proposition of law four, the city

challenges the commission’s “finding” that “ ‘Reynoldsburg could have sought

intervention to participate in that [prior rate] proceeding and provided comments

relative’ ” to the cost provision of CSP’s tariff, quoting the commission order.

According to Reynoldsburg, the result of the commission’s “finding” is that “any

party who fails to intervene in a rate case is found to have waived its right to bring

a subsequent complaint case before the Commission on any subject that is

contained in the tariff approved during the [prior] rate case proceeding.”

{¶ 64} Reynoldsburg apparently believes that the commission found

that—by not intervening in the 1992 rate case—the city had forfeited its right to

challenge CSP’s tariff by way of a complaint proceeding filed pursuant to R.C.

4905.26. It is not clear to us how Reynoldsburg reaches that conclusion in light

of the fact that it was able to prosecute its complaint case in full before the

commission, including presenting evidence and filing posthearing briefs.

{¶ 65} In any event, we have recognized that R.C. 4905.26 can be used as

a means of collateral attack on a prior commission proceeding. W. Res. Transit v.

Pub. Util. Comm., 39 Ohio St.2d 16, 313 N.E.2d 811 (1974); Consumers’ Counsel

v. Pub. Util. Comm., 1 Ohio St.3d 22, 24, 437 N.E.2d 586 (1982). Nothing in the

record before us suggests that the commission failed to follow the law set down in

these cases.

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Allegation of Commission Error in Applying the Tariff

{¶ 66} In proposition of law five, Reynoldsburg maintains that the

commission erred in finding that the tariff applies to the specific facts of this case.

The city claims that Section 17 of the tariff does not apply to the city’s decision to

require utilities to place overhead power lines underground. The city notes that

the tariff language specifies that CSP “shall not be required to construct general

distribution lines underground unless the cost of such special construction * * *

shall be paid for by that municipality.” According to Reynoldsburg, it never

“required” CSP to construct power lines underground. The city asserts that CSP

had a choice: (1) it could continue to operate in the right of way and place its

electric lines underground or (2) it could forgo operating in the right of way and

place its lines in private easements. Reynoldsburg argues that because CSP chose

the former, it was subject to the city’s ordinance.

{¶ 67} The record here contains ample evidence to support the

commission’s decision. First, the parties’ agreed statement of facts states that

Phase II of the Main Street Project “required that all utilities in the City’s Main

Street right-of-way be placed underground.” (Emphasis added.) Reynoldsburg

even constructed an underground duct bank—at its own expense and at a cost of

over $816,000—for the relocation of facilities in the right of way. In fact, city

officials referred to the underground right of way as the “AEP duct bank.”

{¶ 68} Second, Reynoldsburg’s Public Service Director Reichard testified

that both Phase I and Phase II of the Main Street Project required the relocation of

overhead electric lines underground. According to Reichard, the city council and

the city administration decided as part of the overall Main Street Project that

utilities would have to relocate lines underground. Reynoldsburg’s mayor

corroborated Reichard’s testimony when he testified that relocating utility lines

into the underground duct bank was part of a larger plan to revitalize and upgrade

Main Street.

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{¶ 69} Third, in October 2004, Reynoldsburg applied for a grant from the

Franklin County Community Development Block Grant & HOME Program to

fund Phase II of the Main Street Project. In its grant application, the city

represented that “the existing overhead utilities will be removed and replaced

underground.” The application also identified as “a major problem” the “massive

conflicting overhead wires which must be underground in order for the City to

proceed with its comprehensive streetscape program in the same area.” And

finally, the city stated that “[w]ith the undertaking of this project, thru the

financial assistance of CDBG funding, the massive overhead wires will be

underground into a concrete duct bank.”

{¶ 70} Fourth, Reichard sent a letter to CSP on July 8, 2008, indicating

that Reynoldsburg would soon begin construction of Phase II of the Main Street

Project. Reichard’s letter further stated that the city had “designated that the

portion of the public right of way within the Project shall accommodate only

utility facilities located underground.” (Emphasis added.) The letter then gave

CSP “notice” that CSP would “be required to relocate their respective facilities

within the public right of way of the Project into the underground duct bank.”

(Emphasis added.) Reichard’s letter did not mention that CSP had the option of

relocating power lines to private easements.

{¶ 71} Reynoldsburg counters that the commission erred when it found

that (1) there was not sufficient time for CSP to obtain private easements and (2)

CSP’s only option was to relocate its lines into the underground duct bank. The

city argues that the commission misread Reichard’s July 8 letter when it found

that the letter set forth only a “limited 90-day time frame” for relocating the lines.

{¶ 72} The commission did misconstrue Reichard’s reference to a 90-day

time frame. Reichard’s letter stated that CSP had 60 days from when it received

written notice that the construction of the duct bank was completed to relocate the

lines. The letter estimated that the underground duct would be completed on or

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January Term, 2012

about October 15, 2005. Therefore, CSP had approximately five months to bury

the lines, instead of 90 days as the commission found. Even so, the commission’s

error does not warrant reversal, because the city has not demonstrated prejudice.

Indus. Energy Consumers v. Pub. Util. Comm., 63 Ohio St.3d at 553, 589 N.E.2d

1289.

{¶ 73} First, although Reynoldsburg cited evidence that CSP does use

private easements for the placement of certain facilities, the city has offered no

evidence that CSP had the option to do so in this case. The evidence in this case

demonstrates that the city “required” CSP to relocate electric lines in the right of

way underground. The city offers no evidence, however, that it presented CSP

with an option of using private easements for relocation. In fact, the city paid

over $816,000 to construct an underground duct bank—referred to as the AEP

duct bank by city officials—for CSP to place power lines into. This raises the

question why Reynoldsburg would spend this much money if it intended to give

CSP the option of relocating lines onto private easements. Moreover, the city

says nothing about how allowing CSP to relocate lines to private easements would

diminish the safety and aesthetic benefits of burying electric power lines that were

so integral to the Main Street Project.

{¶ 74} Second, even if this option had been available to CSP, the city has

not shown that it was possible to relocate lines to private easements, even under

the five-month time frame presented in Reichard’s letter. Nothing before the

court reflects whether any private property along the routes of the proposed

relocation would be able to accommodate CSP’s facilities or whether the owners

of that property would even consider allowing CSP to place facilities onto their

property.

{¶ 75} As a final matter, Reynoldsburg counters that CSP offered no

evidence that it did not have sufficient time to relocate lines to private easements.

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But the city raised this issue at the commission, not CSP. As the complainant

before the commission, the city had that burden.

{¶ 76} We conclude that sufficient evidence existed to support the

commission’s finding that the city required CSP to relocate the existing overhead

power lines underground.

Commission’s Interpretation of Tariff Language

{¶ 77} Reynoldsburg asserts in its final proposition of law that the

commission misconstrued and improperly applied the language of the tariff. The

city maintains that the operative language of the tariff required the commission to

determine the relative contributions of Reynoldsburg and CSP to the total cost of

relocation.

{¶ 78} The language of the tariff at issue here provides:

The company shall not be required to construct general

distribution lines underground unless the cost of such special

construction for general distribution lines and/or the cost of any

change of existing overhead general distribution lines to

underground which is required or specified by a municipality or

other public authority (to the extent that such cost exceeds the cost

of construction of the Company’s standard facilities) shall be paid

for by that municipality or public authority. The “cost of any

change” as used herein, shall be the cost to the Company of such

change. The “cost of special construction” as used herein, shall be

the actual cost to the Company in excess of the cost of standard

construction.

{¶ 79} Reynoldsburg notes that the tariff contemplates two types of

construction: (1) “special construction for general distribution lines” and (2) a

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January Term, 2012

“change of existing overhead general distribution lines to underground.” The

parties agree that “standard facilities” refers to above-ground lines and “special

construction for general distribution lines” involves constructing electric service

lines underground in an area where no power lines had previously been

constructed.

{¶ 80} Reynoldsburg states that the parenthetical—“(to the extent that

such cost exceeds the cost of construction of the Company’s standard

facilities)”—uses the phrase “such cost” without identifying which costs are

implicated. The city argues that this, coupled with the placement of the

parenthetical after the second of the two types of construction, means that the

parenthetical applies to both new construction and relocation. Thus, in

Reynoldsburg’s view, the city is responsible only for the cost of relocating the

lines in excess of what it would have cost CSP to move the lines from one above-

ground location to another.

{¶ 81} Reynoldsburg, however, fails to take into account the remainder of

the paragraph. The first sentence following the parenthetical phrase states that the

“ ‘cost of any change’ * * * shall be the cost to the Company of such change.”

That is, the “cost of any change of existing overhead general distribution lines to

underground” in the first sentence is defined in the second sentence as “the cost to

the Company of such change.” (Emphasis added.) And the last sentence of the

paragraph provides that the “ ‘cost of special construction’ * * * shall be the

actual cost to the Company in excess of the cost of standard construction.” In

short, these two sentences cure any ambiguity created by the placement of the

parenthetical. Therefore, the commission correctly found that the city is required

to pay CSP’s entire costs for relocating the power lines underground.

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CONCLUSION

{¶ 82} Because none of Reynoldsburg’s propositions of law is well taken,

we affirm the orders of the commission.

Orders affirmed.

O’CONNOR, C.J., and LUNDBERG STRATTON, LANZINGER, CUPP, and

MCGEE BROWN, JJ., concur.

PFEIFER, J., concurs in judgment only.

__________________

Taft, Stettinius & Hollister, Mark S. Yurick, and Jason H. Beehler; and

James E. Hood, Reynoldsburg City Attorney, for appellant.

Michael DeWine, Attorney General, William L. Wright, Section Chief,

and Thomas G. Lindgren and Devin D. Parram, Assistant Attorneys General, for

appellee.

Matthew J. Satterwhite, Marilyn McConnell, and Steven T. Nourse; and

Porter, Wright, Morris & Arthur and Kathleen M. Trafford, for intervening

appellee.

Elizabeth H. Watts and Amy B. Spiller, urging affirmance for amicus

curiae Duke Energy Ohio, Inc.

Thompson Hine, L.L.P., Scott A. Campbell, Kurt P. Helfrich, and Michael

L. Dillard, urging affirmance for amicus curiae Ohio Rural Electric Cooperatives,

Inc.

______________________

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