Sunoco, Inc. (R & M) v. Toledo Edison Co.

[Cite as Sunoco, Inc. (R&M) v. Toledo Edison Co., 129 Ohio St.3d 397, 2011-Ohio-2720.]

SUNOCO, INC. (R&M), APPELLANT, v. TOLEDO EDISON COMPANY ET AL.,

APPELLEES.

[Cite as Sunoco, Inc. (R&M) v. Toledo Edison Co.,

129 Ohio St.3d 397, 2011-Ohio-2720.]

Public utilities — Special contracts and reasonable arrangements in electric-

service contracts — Most-favored-nation clauses — Commission

misconstrued the language of the clause — Order reversed.

(No. 2009-0880 — Submitted February 15, 2011 — Decided June 9, 2011.)

APPEAL from the Public Utilities Commission, No. 07-1255-EL-CSS.

__________________

MCGEE BROWN, J.

Introduction

{¶ 1} Sunoco, Inc. (R&M) owns and operates petroleum-refining

facilities in several states, including Oregon, Ohio. Sunoco purchases electric

service for its Oregon facility from the Toledo Edison Company, intervening

appellee.

{¶ 2} This case involves a contract between Sunoco and Toledo Edison

for the sale of electricity. The contract is a “special contract,” approved by

appellee Public Utilities Commission of Ohio (“PUCO” or “commission”)

pursuant to R.C. 4905.31, which permits “reasonable arrangement[s]” between

public utilities and their customers. Generally, such contracts include

arrangements that differ from the standard rate schedules and are often tailored to

a specific customer’s service.

{¶ 3} The case also concerns a contract between BP Oil Company and

Toledo Edison for the sale of electricity. BP owns and operates a competing

refinery located adjacent to Sunoco’s refinery. Both the Sunoco and BP contracts

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contain clauses generally called “most favored nation” clauses. These clauses –

titled “Comparable Facility Price Protection” – allow Sunoco and BP to utilize

any “arrangement, rates or charges” for their facilities that Toledo Edison has

given to the other.

{¶ 4} The sole issue in this case is whether Sunoco could invoke the

most-favored-nation clause to extend the duration of its contract with Toledo

Edison to match the duration of BP’s contract with Toledo Edison. If the clause

can be used to extend the contract, then Sunoco would pay the same rate that BP

paid for electric service from February 2008 until December 31, 2008. If the

contract is not extended, Sunoco would be obligated to pay Toledo Edison over

$13 million in higher electric bills.

{¶ 5} The commission found that the plain language of the most-

favored-nation clause did not allow Sunoco to extend the duration of its contract

to match the duration of BP’s contract. We find that the commission committed

several errors in construing the language of the most-favored-nation clause. As a

result, we reverse the decision of the commission and render judgment in favor of

Sunoco.

Facts

{¶ 6} Sunoco, Inc. (R&M) filed a complaint in 2007 against Toledo

Edison in the Public Utilities Commission of Ohio. In proceedings before the

commission, the parties filed joint stipulations of facts, which include the

following information.

{¶ 7} In 1996, Toledo Edison entered into an electric-service contract

with Sunoco. Also in 1996, Toledo Edison entered into a similar contract with

BP, hereinafter referred to as “the BP Agreement” or “the 1996 Agreement.”

The BP Agreement provided that it would remain in effect until June 2006.

{¶ 8} On May 17, 1999, Sunoco and Toledo Edison entered into an

electric-service agreement (the “Sunoco Agreement” or “the 1999 Agreement”),

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which replaced the 1996 Sunoco-Toledo Edison contract. The Sunoco Agreement

is a special contract authorized by the PUCO pursuant to R.C. 4905.31. Under the

terms of the special contract, Sunoco was entitled to pricing for electric service

that was below standard tariff rates. The Sunoco Agreement provided that it

would remain in effect through June 2006 – the same date as the BP Agreement.

{¶ 9} The Sunoco Agreement and the BP Agreement contained identical

most-favored-nation clauses. Generally, Sunoco and BP could utilize the clause

to obtain a benefit – in the form of an “arrangement, rates or charges” – that

Toledo Edison had given the other. In each of these agreements, the clause was

titled “Comparable Facility Price Protection.” No one disputes that Sunoco and

BP are comparable facilities as that term is defined in the most-favored-nation

clause.

{¶ 10} In late 1999, the General Assembly enacted legislation that

restructured Ohio’s electric-utility industry to allow retail customers to buy

electricity from someone other than their local electric company. See

Am.Sub.S.B. No. 3, 148 Ohio Laws, Part IV, 7962. Codified as R.C. Chapter

4928, the legislation was commonly known as “S.B. 3.” What followed was a

series of cases at the PUCO involving Toledo Edison and other electric utilities in

which the PUCO attempted to ease the transition from a regulated rate structure to

a market-rate structure. See the electric-transition-plan (“ETP”) case, In re

Application of Ohio Edison Co. (July 19, 2000), PUCO No. 09-1212-EL-ETP;

and the rate-stabilization-plan (“RSP”) case, In re Application of Ohio Edison Co.

(Oct. 28, 2003), PUCO No. 03-2144-EL-ATA, in which the PUCO allowed

Toledo Edison and its large customers to extend the terms of their pre-S.B. 3

service contracts.

{¶ 11} The first extension was proposed through a joint stipulation filed

by Toledo Edison and other parties to Toledo Edison’s ETP case. The electric-

transition-plan stipulation provided that each electric-service customer that had

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entered into a special contract with Toledo Edison would be given a one-time

opportunity to continue, cancel, or extend the terms of its special contracts,

provided that those customers gave Toledo Edison timely notice. As was required

by the electric-transition-plan stipulation and the commission’s order approving

that stipulation, Toledo Edison gave notice to each special-contract customer of

the option to extend the duration of its contract. Sunoco elected to extend the

terms of its 1999 Agreement with Toledo Edison. Likewise, BP elected to extend

the terms of its 1996 Agreement with Toledo Edison.1

{¶ 12} The next opportunity to extend occurred in Toledo Edison’s RSP

case. In that case, the commission again approved a joint stipulation filed by

Toledo Edison and other parties allowing Toledo Edison’s customers to extend

the term of any special contract “upon the request of the customer, or its agent,

received within 30 days of the Commission’s order in this case.” However,

unlike in the ETP case, the stipulation and the PUCO’s order in the RSP case did

not require Toledo Edison to notify its contract customers of the opportunity to

extend, and Toledo Edison did not directly communicate with Sunoco, BP, or any

other contract customer regarding this option. Nevertheless, within that 30-day

window, BP requested that Toledo Edison extend the 1996 BP Agreement, which

Toledo Edison agreed to do. Sunoco did not submit a request to Toledo Edison to

extend the Sunoco Agreement.

{¶ 13} A final stipulated contract extension was approved in Toledo

Edison’s rate-certainty-plan (“RCP”) case, In re Application of Ohio Edison Co.,

PUCO No. 05-1125-EL-ETA, a case that is still open. The stipulation in the RCP

case provided that the special contracts that were extended under the RSP case —

such as the BP Agreement — would continue in effect until December 31, 2008.

The stipulation further provided that special contracts extended under the ETP

1. The contract extensions were not for a specific date but depended instead upon the date that

Toledo Edison could no longer collect regulatory transition charges.

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case, but not extended under the RSP case – such as the Sunoco Agreement –

would continue in effect only until February 2008. Thus, Sunoco’s agreement

was scheduled to expire ten months before BP’s agreement.

{¶ 14} On or about May 16, 2007, Toledo Edison informed Sunoco that

the Sunoco Agreement would terminate in February 2008.

{¶ 15} On November 13, 2007, Sunoco sent a letter to Toledo Edison

stating that Sunoco “is exercising its right under the [Sunoco] Agreement to

utilize the BP Oil Company arrangement including, in particular, the term of that

arrangement which has been extended until December 31, 2008” and disputing

Toledo Edison’s right to terminate the Sunoco Agreement in February 2008.

Sunoco invoked the most-favored-nation clause in its 1999 Agreement with

Toledo Edison as evidence that the duration of Sunoco’s agreement must match

the duration of the BP Agreement.

{¶ 16} On November 16, 2007, Toledo Edison responded with a letter to

Sunoco stating that it has “a different interpretation of the impact of the provision

of the contract,” disputing that Sunoco had the right to extend the term of the

Sunoco Agreement until December 31, 2008.

{¶ 17} On December 6, 2007, Sunoco filed a complaint with the

commission against Toledo Edison under R.C. 4905.26. Sunoco challenged

Toledo Edison’s refusal to extend the duration of the Sunoco Agreement to

December 31, 2008. The complaint alleged that if the agreement was terminated

in February 2008, as Toledo Edison intended, Sunoco’s electric bills would be

“millions of dollars higher,” and Sunoco would “operate at a competitive

disadvantage to the adjacent BP facility.”

{¶ 18} On February 20, 2008, Sunoco agreed to pay into an escrow

account the difference between what Sunoco and Toledo Edison alleged should be

the cost of Sunoco’s electric service between its February 2008 billing date and

December 31, 2008.

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{¶ 19} On February 19, 2009, the commission issued its order denying

Sunoco’s complaint. The commission found that the most-favored-nation clause

was a price-protection provision that was limited in its application to rates and

charges for electrical service. Accordingly, the commission held that Sunoco had

not provided sufficient evidence to show that the most-favored-nation clause

allowed Sunoco to extend the duration of its contract to December 31, 2008, to

match the termination date of the BP agreement.

{¶ 20} Sunoco filed a timely application for rehearing. The commission

denied Sunoco’s application.

{¶ 21} Sunoco appealed to this court, raising four propositions of law.

For the reasons discussed below, we sustain propositions of law Nos. 1, 3, and 4

and reverse the commission’s order.

Standard of Review

{¶ 22} “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 where the record contains sufficient probative evidence to show

[that] the PUCO’s determination is not manifestly against the weight of the

evidence and is 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, quoting AT&T Communications of Ohio, Inc. v. Pub. Util. Comm. (2000), 88

Ohio St.3d 549, 555, 728 N.E.2d 371. “[T]he appellant bears the burden of

demonstrating that the commission’s decision is against the manifest weight of

the evidence or is clearly unsupported by the record.” Id.

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{¶ 23} Although “we have complete and independent power of review as

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

Comm. (1997), 78 Ohio St.3d 466, 469, 678 N.E.2d 922, we have explained that

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. (1979), 58 Ohio St.2d 108, 110, 12

O.O.3d 115, 388 N.E.2d 1370.

Analysis

A. Sunoco’s Proposition of Law No. 1

{¶ 24} In its first proposition of law, Sunoco contends that the

commission erred when it found that the plain language of the most-favored-

nation clause in the Sunoco Agreement did not allow Sunoco to extend the

duration of its contract to make it identical to the BP Agreement. We agree. The

commission’s interpretation of the most-favored-nation clause was unlawful and

unreasonable for the following reasons.

1. The PUCO erred in considering the title of the clause

{¶ 25} Sunoco first contends that the PUCO wrongfully relied on the

heading of the clause in interpreting the scope and intent of the clause. In its

order, the commission noted that the most-favored-nation clause is titled

“Comparable Facility Price Protection.” The commission then stated that “[t]he

first indication of the scope of the most favored nation clause is the title of the

clause itself, which plainly indicates that the clause is intended to provide price

protection between comparable facilities and is not intended to deal with the

termination date of the contract.” Sunoco maintains that the PUCO erred in this

regard because the 1999 Sunoco Agreement prohibits using clause headings to

interpret the scope and intent of any clause.

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{¶ 26} Sunoco is correct. Section 10.6 of the Sunoco Agreement, titled

“Clause Heading,” provides, “The clause headings appearing in this Agreement

have been inserted for the purpose of convenience and ready reference. They do

not purport to and shall not be deemed to define, limit or extend the scope or

intent of the clauses to which they pertain.” Thus, the commission erred in

relying on the clause heading.

{¶ 27} The PUCO and Toledo Edison both counter that Sunoco did not

preserve this issue for appeal by raising it in its application for rehearing at the

commission or in its notice of appeal to this court. See R.C. 4903.10 and

4903.13. We find that this issue is properly before us.

{¶ 28} Sunoco’s rehearing application and notice of appeal both contained

the following identical language: “The Order is unjust and unlawful in that it finds

that the ‘Comparable Facility Price Protection’ (hereinafter ‘MFN clause’) of the

1999 Agreement * * * only allowed Sunoco to invoke the provision to obtain a

price for power from Toledo Edison identical to that in the Agreement between

BP Oil Company * * * and Toledo Edison, and did not allow it to invoke the

MFN clause to extend the duration of the contract to make it identical to the BP

Agreement.” (Footnote omitted.) The commission found that the title of the

most-favored-nation clause “plainly indicates that the clause is intended to

provide price protection between comparable facilities and is not intended to deal

with the termination date of the contract.” Sunoco’s rehearing application and

notice of appeal specifically referred to the commission’s finding that the title

heading (“Comparable Facility Price Protection”) was intended only to provide

price protection between comparable facilities (“only allowed Sunoco to invoke

the provision to obtain a price for power from Toledo Edison identical to that in

the Agreement between BP Oil Company and Toledo Edison”). We conclude that

this language was sufficient to preserve this issue for our review. See Discount

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Cellular, Inc. v. Pub. Util. Comm., 112 Ohio St.3d 360, 2007-Ohio-53, 859

N.E.2d 957, ¶ 59.

2. The PUCO misconstrued the plain language

of the most-favored-nation clause

{¶ 29} Section 9.2, the most-favored-nation clause in the 1999 Sunoco

Agreement, provides:

{¶ 30} “If the Company provides an arrangement, rates or charges which

is or may be in effect at any time during the term of this Agreement, to a

Comparable Facility within its certified territory, then the Customer will have the

right to utilize that arrangement, rates or charges for its Facility. The Customer

must comply with all other terms and conditions of the arrangement including

firm and interruptible load characteristics/conditions.”

{¶ 31} The commission found that the plain language of this clause did

not allow Sunoco’s termination date in its 1999 Agreement with Toledo Edison to

match the termination date of BP’s 1996 Agreement with Toledo Edison.

Specifically, the commission rejected Sunoco’s “attempts to interpret the word

‘arrangement,’ as used in this provision, to infer a relationship with the duration

of the contract.” The commission reasoned that “within the context of the

comparable facility price provision, the duration or ‘term’ of the contract is

referred to separately from the ‘terms and conditions of the arrangement.’

Clearly, the language ‘during the term of this agreement,’ which is contained in

the most favored nation clause, makes that clause applicable to provisions of the

contract other than the duration of the contract. Thus, we can not [sic] find that

the most favored nation clause enables Sunoco to adopt the duration or ‘term’ of

BP’s contract.”

{¶ 32} Sunoco contends that the commission’s interpretation is not

supported by a plain reading of the most-favored-nation clause. We agree with

Sunoco and find that the commission’s interpretation – specifically its reading of

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the first sentence of the most-favored-nation clause – is not a reasonable

interpretation of the plain language of the clause.

{¶ 33} In construing the plain language of the clause, the commission

based its finding solely on the fact that the duration or “term of this Agreement” –

set forth in the first sentence of the most-favored-nation clause – is referred to

separately from the “terms and conditions of the arrangement” in the second

sentence of the clause. According to the commission, the phrase “during the term

of this Agreement” made the most-favored-nation clause applicable to all other

provisions of the contract except the contract’s duration. The commission’s

reasoning appears to be that because these phrases are separated in the most-

favored-nation clause and used in different contexts, Sunoco and Toledo Edison

intended the words “arrangement” and “term” (meaning duration) to have

different meanings. Presumably based on this reasoning, the commission

concluded that the duration of the contract was outside the scope of an

“arrangement.”

{¶ 34} This was error. The first sentence of the most-favored-nation

clause reads as follows: “If the Company provides an arrangement, rates or

charges which is or may be in effect at any time during the term of this

Agreement, to a Comparable Facility within its certified territory, then the

Customer will have the right to utilize that arrangement, rates or charges for its

Facility.” This language is limiting, but not in the manner the commission found.

The language of this provision, when construed in its proper context, merely

means that Sunoco can invoke the most-favored-nation clause only “during the

term of this Agreement.” Stated another way, the first sentence limits Toledo

Edison’s obligations under the most-favored-nation clause to the “term of this

Agreement,” meaning that Sunoco has no right to invoke the clause after the

agreement has expired. Because Sunoco invoked the clause before the contract

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expired, the “during the term of this Agreement” provision is not at issue in this

appeal.

3. The meaning of the word “arrangement”

{¶ 35} By focusing its attention on the phrases “during the term of this

Agreement” and “terms and conditions of the arrangement,” the commission

overlooked the dispositive question in this case: the meaning of the word

“arrangement.” Section 9.2 of the most-favored-nation clause provides that “the

Customer (here Sunoco) will have the right to utilize [any] arrangement, rates or

charges for its Facility” that Toledo Edison provides to BP. Thus, the crux of the

issue before us is whether the duration of the BP contract was an “arrangement”

provided by Toledo Edison that Sunoco could utilize for its facility.

{¶ 36} Sunoco asserts that the word “arrangement” in the most-favored-

nation clause allows Sunoco to utilize all terms and conditions of the BP

Agreement for its facility, including contract duration. Sunoco’s primary

argument is that the word “arrangement” means the “entire contract” or “entire

agreement.”2 We need not decide whether the parties intended that the word

“arrangement” be interpreted to mean “entire contract or agreement.” Rather, we

need determine only whether “arrangement,” as used in the most-favored-nation

clause, encompasses the duration of a competitor’s contract.

{¶ 37} When confronted with an issue of contract interpretation, our role

is to give effect to the intent of the parties. We will examine the contract as a

whole and presume that the intent of the parties is reflected in the language of the

contract. In addition, we will look to the plain and ordinary meaning of the

language used in the contract unless another meaning is clearly apparent from the

contents of the agreement. When the language of a written contract is clear, a

2. In its reply brief, Sunoco argues for the first time that the word “arrangement,” as set forth in

G.C. 614-17, the predecessor to R.C. 4905.31, means “contract.” See Lake Erie Power & Light

Co. v. Telling-Belle Vernon Co. (1937), 57 Ohio App. 467, 11 O.O. 234, 14 N.E.2d 947,

paragraph one of the syllabus. Sunoco is forbidden to raise new arguments in its reply brief. State

ex rel. Colvin v. Brunner, 120 Ohio St.3d 110, 2008-Ohio-5041, 896 N.E.2d 979, ¶ 61.

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court may look no further than the writing itself to find the intent of the parties.

“As a matter of law, a contract is unambiguous if it can be given a definite legal

meaning.” Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849,

797 N.E.2d 1256, ¶ 11.

{¶ 38} The most-favored-nation clause states that if Toledo Edison

“provides an arrangement, rates or charges which is or may be in effect at any

time during the term of this Agreement, to a Comparable Facility within its

certified territory, then the Customer will have the right to utilize that

arrangement, rates or charges for its Facility.” (Emphasis added.) The word

“arrangement” is not defined in the Sunoco Agreement. Common, undefined

words appearing in a contract “will be given their ordinary meaning unless

manifest absurdity results, or unless some other meaning is clearly evidenced

from the face or overall contents” of the agreement. Alexander v. Buckeye Pipe

Line Co. (1978), 53 Ohio St.2d 241, 7 O.O.3d 403, 374 N.E.2d 146, paragraph

two of the syllabus.

{¶ 39} We then must look to the ordinary meaning of the word

“arrangement.” While there are several dictionary definitions of “arrangement,”

even the narrower definitions fit within the context of the most-favored-nation

clause, such as “adjustment,” “mutual agreement,” and “understanding.”

Webster’s Third New International Dictionary (1986) 120 (definitions 6(a) and

(b)(1)). Each of these definitions would fit within the context of the clause and

would not result in “manifest absurdity.” By implication then, any adjustment,

agreement, or understanding that Toledo Edison provides to a comparable facility

within its certified territory is an arrangement that Sunoco has the right to utilize

for its facility.

{¶ 40} Moreover, although the words “arrangement, rates or charges” are

used together in the same phrase, it is apparent from the face of the clause that

“arrangement” means something other than “rates or charges.” Rates and charges

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are clearly price terms of the contract. Thus, it is reasonable to construe

“arrangement” to encompass other, nonprice terms of the contract. In sum, when

the word “arrangement” is interpreted according to its common usage and in

context, the most-favored-nation clause allows Sunoco to utilize all nonprice

terms of a competitor’s contract. Because contract duration is a nonprice term, an

“arrangement” would include the duration of the contract.

{¶ 41} This interpretation is consistent with the purpose of the most-

favored-nation clause. The parties agree that the purpose of the most-favored-

nation clause is to “level the playing field” between two competitors served by the

same electric utility so that neither Sunoco nor BP has a competitive advantage

over the other. Sunoco and BP would not be on equal footing if BP could obtain

discount pricing for the entire duration of its contract, but Sunoco – because it

was denied its right to match BP’s contract duration – could not obtain the same

discount for the same length of time.

4. Counterarguments to Sunoco’s Proposition of Law of No. 1

{¶ 42} Both Toledo Edison and the PUCO raise several

counterarguments. None have merit.

a. Toledo Edison’s Counterarguments

i. Interpreting “arrangement” to include duration does not

violate the doctrine of noscitur a sociis

{¶ 43} Toledo Edison argues that Sunoco’s interpretation of the word

“arrangement” in the most-favored-nation clause violates the maxim noscitur a

sociis, “it is known from its associates.” Ashland Chem. Co. v. Jones (2001), 92

Ohio St.3d 234, 236, 749 N.E.2d 744. Under the doctrine of noscitur a sociis, the

meaning of an unclear word may be derived from the meaning of accompanying

words. Id. at 236-237.

{¶ 44} Toledo Edison concedes that “arrangement” refers to nonprice

terms of the contract, but it maintains that such nonprice terms include only

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“similar non-price terms, such as the choice between interruptible and firm power

that was so important to Sunoco.” Yet Toledo Edison offers no compelling

argument why “arrangement” must be construed so narrowly. Had Toledo Edison

wanted the most-favored-nation clause to apply only to specific terms of the

contract such as the type of power supplied, using a broad term like

“arrangement” is an odd way to limit the reach of that clause. The word

“arrangement,” because of its breadth, would seemingly cover most, if not all,

nonprice terms and provisions of a competitor’s contract.

ii. Eveleth is not persuasive

{¶45} Toledo Edison asserts that several courts in other jurisdictions have

reviewed similar most-favored-nation clauses in electric-utility-supply contracts

and rejected the very arguments that Sunoco makes here. Toledo Edison states

that the commission had the benefit of several of these court decisions, but Toledo

Edison cites only one: Eveleth Taconite Co. v. Minnesota Power & Light Co.

(1974), 301 Minn. 20, 221 N.W.2d 157.3 Eveleth, however, is inapposite.

{¶ 46} First, Eveleth is distinguishable because the most-favored-nation

clause in that case does not contain the language of the clause in this case.

Specifically, the clause in Eveleth does not contain the word “arrangement.”

Thus, Eveleth’s interpretation of a similar most-favored-nation clause has no

bearing on determining the meaning of the clause at issue here.

{¶ 47} Second, Toledo Edison’s reliance on Eveleth is misplaced because

the court went beyond the four corners of the contract and relied on extrinsic

evidence of precontract negotiations between the customer and the utility to

determine the intent of the parties. See Eveleth, 301 Minn. at 27. In contrast,

extrinsic evidence cannot be considered in this case because the outcome turns

3. The commission cited Eveleth and reasoned that “within the context of the comparable facility

price provision, the duration or ‘term’ of the contract is referred to separately from the ‘terms and

conditions of the arrangement.’ ” See Eveleth, 301 Minn. at 27-28, 221 N.W.2d 157.

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solely on the plain language of the most-favored-nation clause. See Shifrin v.

Forest City Ents., Inc. (1992), 64 Ohio St.3d 635, 597 N.E.2d 499, syllabus.

iii. Baker Car & Truck Rental and Waterloo Furniture are distinguishable

{¶ 48} Toledo Edison also contends that courts in other jurisdictions

“consistently have found that contracts with most favored nation clauses end on

the termination date specified in the contract unless the contract itself contains

specific language authorizing an extension of the contract’s term.” Toledo Edison

refers the court to Baker Car & Truck Rental, Inc. v. Little Rock (1996), 325 Ark.

357, 925 S.W.2d 780, and Waterloo Furniture Components, Ltd. v. Haworth, Inc.

(C.A.7, 2006), 467 F.3d 641.

{¶ 49} Both Baker Car and Waterloo Furniture turned on the fact that

neither plaintiff had attempted to invoke the most-favored-nation clauses of its

contract until after the contract had already expired. See Baker Car, 325 Ark. at

359, 363; Waterloo Furniture, 467 F.3d at 645-646. In contrast to this case, there

is no dispute that Sunoco invoked the most-favored-nation clause before its 1999

contract with Toledo Edison had expired. As a result, we reject Toledo Edison’s

invitation to rely on these cases as persuasive authority.

b. The Commission’s Counterarguments

i. The PUCO’s fear of perpetual contracts is unwarranted

{¶ 50} The PUCO first counters that if Sunoco’s interpretation of the

most-favored-nation clause prevails, the consequences would be “unintended and

irrational.” Specifically, the PUCO claims that Sunoco would be able to extend

its contract with Toledo Edison indefinitely should Toledo Edison continue to

enter into special contracts with other oil refineries’ operating facilities

comparable to Sunoco’s facility. The PUCO’s argument is speculative and

without merit.

{¶ 51} There is no evidence in the record of any other special contracts

involving Toledo Edison and BP, or any other oil refinery for that matter. Indeed,

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the record is silent as to whether refineries beyond those operated by Sunoco and

BP even exist in Toledo Edison’s service territory. This case concerns only the

1999 Sunoco Agreement and Sunoco’s request to extend that agreement to match

the expiration date of the 1996 BP Agreement. Based on the stipulated facts of

this case, BP’s contract expired on December 31, 2008. Thus, the Sunoco

Agreement will be extended to December 31, 2008, and no further.

ii. Requirements set forth in the RSP case are not “terms and conditions

of the arrangement” under the most-favored-nation clause

{¶ 52} The most-favored-nation clause provides that for a customer to

utilize an “arrangement,” that customer “must comply with all other terms and

conditions of the arrangement including firm and interruptible load

characteristics/conditions.” The PUCO states that assuming that an

“arrangement” encompasses a contract extension, the arrangement allowing BP to

extend its contract to December 31, 2008, was made pursuant to the RSP case.

The PUCO notes that the stipulation in that case offered all of Toledo Edison’s

special-contract customers — including BP and Sunoco — a one-time opportunity

to extend their agreements, provided that they notify Toledo Edison of their

decision to extend their contracts within 30 days of the commission’s order

approving the stipulation. The PUCO maintains that Sunoco was offered the

same arrangement as BP; BP complied with the notification requirement, but

Sunoco did not. According to the PUCO, Sunoco cannot utilize the arrangement

offered to BP because Sunoco failed to comply with the terms and conditions of

the arrangement.

{¶ 53} What the PUCO overlooks here is that if Sunoco had accepted

Toledo Edison’s offer in the RSP case, there would be no need to resort to the

most-favored-nation clause as a means of extending its contract with Toledo

Edison. Acceptance of the offer, by itself, would have extended the Sunoco

Agreement through December 2008. The whole aim of the most-favored-nation

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clause is to allow its beneficiary to avail itself of a contractual arrangement based

merely on the fact that another Toledo Edison customer enjoys that arrangement.

That aim is defeated if “terms and conditions of the arrangement” includes a

prerequisite that precludes Sunoco from invoking the clause in the first place.

{¶ 54} In interpreting a contract, we are required, if possible, to give

effect to every provision of the contract. “ ‘[I]f one construction of a doubtful

condition written in a contract’ ” would render a clause meaningless and it is

possible that another construction would give that same clause meaning and

purpose, then the latter construction must prevail. Foster Wheeler Enviresponse,

Inc. v. Franklin Cty. Convention Facilities Auth. (1997), 78 Ohio St.3d 353, 362,

678 N.E.2d 519, quoting Farmers Natl. Bank v. Delaware Ins. Co. (1911), 83

Ohio St. 309, 94 N.E. 834, paragraph six of the syllabus. We find that the notice

requirement of the RSP stipulation is not a term or condition of an “arrangement.”

Simply stated, the PUCO’s construction here would render the phrase “all other

terms and conditions of the arrangement” a nullity and defeat the purpose of the

most-favored-nation clause.

5. Conclusion to Proposition of Law No. 1

{¶ 55} Sunoco’s first proposition of law is well taken. The most-favored-

nation clause is not strictly a price-protection provision. Instead, the clause

allows Sunoco to utilize any more favorable “arrangement, rates or charges” that

Toledo Edison offers to a competitor of Sunoco. Under the plain language of the

clause, the word “arrangement” encompasses all nonprice terms of a competitor’s

contract. Duration is a nonprice term of a contract and, consequently, is subject to

the clause. Moreover, this interpretation is consistent with the agreed purpose of

the clause, which is to ensure that neither Sunoco nor BP obtains a competitive

advantage over the other. Toledo Edison’s refusal to allow Sunoco to invoke the

clause to extend its contract to match BP’s contract placed Sunoco at a

competitive disadvantage. Therefore, we hold that the most-favored-nation clause

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allows Sunoco to extend the termination date of its 1999 Agreement to match the

termination date of the 1996 BP Agreement.

B. Sunoco’s Propositions of Law Nos. 3 and 4

{¶ 56} In proposition of law No. 3, Sunoco faults the commission for

relying on “equitable considerations” and other factors that were outside the plain

language of the contract in ruling against Sunoco in this case. In proposition of

law No. 4, Sunoco asserts that the commission erred when it found that Sunoco

was attempting to “collaterally attack” the commission’s decisions in the RSP and

RCP cases.

{¶ 57} Sunoco’s third and fourth propositions of law are well taken for the

following reasons.

1. The commission’s reliance on extrinsic evidence was unlawful

{¶ 58} First, Sunoco claims that the commission’s order is unlawful

because it found that Sunoco, as “a sophisticated energy consumer,” should have

extended its contract in the RSP case, just as BP did. Because the commission

found that the plain language of the most-favored-nation clause was dispositive in

resolving the issues before it, we find that it was unlawful for the commission to

rely on matters outside the written agreement of the parties. See Shifrin v. Forest

City Ents., Inc., 64 Ohio St.3d 635, 597 N.E.2d 499, syllabus.

{¶ 59} Second, even if extrinsic evidence could be considered in this case,

relying on this specific evidence was unreasonable and unlawful. Any discussion

about what Sunoco did or did not do in the S.B. 3 cases is irrelevant to

determining the intent of Sunoco and Toledo Edison in this case, because the

Sunoco Agreement was executed on May 17, 1999, before S.B. 3 was enacted.

When circumstances surrounding the agreement invest the language of the

contract with a special meaning, extrinsic evidence can be considered in an effort

to give effect to the parties’ intention. Shifrin, 64 Ohio St.3d 635, syllabus. But

here, the commission relied on circumstances occurring after the parties had

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formed their contract in 1999. This was error. The commission should not have

relied on the S.B. 3 cases as a basis for denying Sunoco’s complaint when there

was no evidence in the record that the parties had contemplated the effects of

electric deregulation when the contract was formed.

2. Sunoco did not collaterally attack the PUCO’s prior orders

{¶ 60} The commission also found that Sunoco’s complaint was a

“collateral[ ] attack [on the commission’s] decisions” in the RSP and RCP cases,

and that to allow this attack to occur “at this late date” could provide “Sunoco

with an unfair advantage over BP which apparently followed the cases and took

the risk to extend its contract at a time when today’s market rates were not known

to them.”

{¶ 61} The commission’s references to “collateral[] attacks” and “this late

date” misrepresent the record in this case. The Sunoco Agreement was set to

expire in February 2008. On November 13, 2007, Sunoco attempted to invoke the

most-favored-nation clause to extend its contract. When Toledo Edison rejected

Sunoco’s attempts to invoke the clause, Sunoco filed a complaint with the

commission on December 5, 2007, to enforce its rights under the contract.

Sunoco’s complaint before the commission was grounded solely on its rights

under the most-favored-nation clause of its contract with Toledo Edison. Sunoco

referred to the RSP and RCP cases in its complaint only as the means by which

BP was able to have its agreement with Toledo Edison extended. Rather than

attacking these cases, Sunoco relied on these cases to show how BP was able to

extend the duration of its contract. In sum, no evidence exists in the record to

support the finding that Sunoco sat on its rights in order to obtain an unfair

advantage over BP. See MCI Telecommunications Corp. v. Pub. Util. Comm.

(1987), 32 Ohio St.3d 306, 312, 513 N.E.2d 337 (PUCO order may be reversed

when the commission made “summary rulings and conclusions without

developing the supporting rationale or record”).

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{¶ 62} Moreover, even if Sunoco did gain an “unfair advantage over BP”

based on when it invoked the most-favored-nation clause, the commission erred in

rejecting Sunoco’s complaint on that basis. See Aultman Hosp. Assn. v.

Community Mut. Ins. Co. (1989), 46 Ohio St.3d 51, 54-55, 544 N.E.2d 920 (when

the terms of a contract are plain and unambiguous, a contract cannot be given a

meaning different from the one reflected by its plain language in order to provide

a more equitable result). Because the commission had previously found that the

contract was plain and unambiguous, the commission was bound to give effect to

the contract’s express terms and was prohibited from rewriting the contract to

remedy any unfairness to BP.

{¶ 63} Toledo Edison counters that the commission had the authority

under R.C. 4905.31 to determine that Sunoco was making an untimely “collateral

attack” on the decisions in the RSP and RCP cases that, if allowed, would

disadvantage BP in the current competitive electric market.

{¶ 64} There is no dispute that the commission has authority under R.C.

4905.31 to regulate, supervise, and modify special contracts. But how far the

commission’s authority under this statute extends need not be decided here,

because nowhere in the commission’s orders in this case did the commission

claim to be using its authority under R.C. 4905.31. R.C. 4903.09 requires the

PUCO in all cases to file “findings of fact and written opinions setting forth the

reasons prompting the decisions arrived at, based upon said findings of fact.” We

cannot find that the commission properly exercised its authority under R.C.

4905.31 when the commission never relied upon that statute in making its

decision in this case.

C. Sunoco’s Proposition of Law No. 2

{¶ 65} In its second proposition of law, Sunoco maintains that the

commission erred when it refused to consider the history of the contractual

relationship between Sunoco and Toledo Edison in interpreting the Sunoco

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January Term, 2011

Agreement. Sunoco also claims that the commission erred when it failed to

consider certain internal memoranda of David Blank, the manager of the Rate

Department for Toledo Edison’s parent corporation, FirstEnergy.

{¶ 66} The commission did not err in declining to consider this evidence.

As discussed in the preceding sections, extrinsic evidence cannot be considered to

give effect to the contracting parties’ intentions when the language of the contract

is clear and unambiguous. Shifrin, 64 Ohio St.3d 635, 597 N.E.2d 499, syllabus.

Conclusion

{¶ 67} We find Sunoco’s first, third, and fourth propositions of law are

well taken. Therefore, we reverse the order of the commission on those issues

and enter judgment in favor of Sunoco. Sunoco’s second proposition of law is

overruled.

Order reversed.

O’CONNOR, C.J., and PFEIFER and LUNDBERG STRATTON, JJ., concur.

O’DONNELL, LANZINGER, and CUPP, JJ., dissent.

__________________

LANZINGER, J., dissenting.

{¶ 68} BP Oil Company, a competitor of Sunoco, Inc. (R&M), took

advantage of a contract extension with Toledo Edison Company. Although

Sunoco had the same opportunity to do so, it did not seek an extension.

Nevertheless, the majority holds that the most-favored-nation clause within

Sunoco’s contract guarantees Sunoco the benefit of BP’s extended term. In part,

the majority justifies its holding as enforcing the intent of the parties. Although

Sunoco asserts that this result was intended, Toledo Edison vigorously disputes it

and contends that Sunoco is not entitled to extend the duration of its contract to

match BP’s because the contract duration is not included within the meaning of

“arrangement.” I agree and therefore dissent.

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{¶ 69} The contract between Sunoco and Toledo Edison is an electric-

service agreement (“ESA”) approved by the Public Utilities Commission of Ohio

(“PUCO” or “commission”) under R.C. 4905.31. This statute authorizes the

PUCO to supervise a special discounted arrangement between an electric utility

and one of its customers. “Every such schedule or reasonable arrangement shall

be under the supervision and regulation of the commission, and is subject to

change, alteration, or modification by the commission.” (Emphasis added.) R.C.

4905.31(E). As part of its regulatory authority, the commission approved a

stipulation that special contracts extended under the electric-transition-plan case

(In re Application of Ohio Edison Co. (July 19, 2000), PUCO No. 09-1212-EL-

ETP) but not extended under the rate-stabilization-plan case (In re Application of

Ohio Edison Co. (Oct. 28, 2003), PUCO No. 03-2144-EL-ATA) would continue

only until February 2008. In re Application of Ohio Edison Co., PUCO No. 05-

1125-EL-ETA. The commission held that the most-favored-nation clause did not

entitle Sunoco to the ten-month extension that BP had negotiated with Toledo

Edison.

{¶ 70} Sunoco bears a heavy burden in challenging PUCO orders by

showing “that the commission’s decision is against the manifest weight of the

evidence or is clearly unsupported by the record.” Monongahela Power Co. v.

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

citing AT&T Communications of Ohio, Inc. v. Pub. Util. Comm. (2000), 88 Ohio

St.3d 549, 555, 728 N.E.2d 371.

{¶ 71} The majority opinion contends that in determining the end date of

Sunoco’s ESA, the PUCO (1) improperly relied on the title of the most-favored-

nation clause,(2) misread the first sentence of the disputed clause, and (3) erred in

finding that the word “arrangement” does not include the duration of the contract.

Although the commission’s position differs from the majority’s view, the PUCO

orders are neither unsupported by evidence in the record nor against the manifest

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weight of the evidence. I would uphold them against the three points discussed

by the majority as well because of court holdings in other jurisdictions.

Reference to Heading of Contract Clause

{¶ 72} I would hold that Sunoco waived the argument that the

commission improperly relied on the title of the disputed clause by failing to

include this point in its application for rehearing and in its notice of appeal.

Nevertheless, even if Sunoco is held not to have waived the point, the

commission’s reference is supportable. Section 10.6 of Sunoco’s ESA explains

that clause headings are “for the purpose of convenience and ready reference” and

“shall not be deemed to define, limit or extend the scope or intent of the clauses to

which they pertain.”

{¶ 73} The commission in its order does refer at several places to the ESA

section titled “Comparable Facility Price Protection,” and the majority makes

much of the commission’s use of the phrase “ price protection provision.” But

both parties also use the words “most-favored-nation clause” in referring to and in

discussing the meaning of Section 9, although neither phrase is found within the

disputed section, which reads in full:

{¶ 74} “9.1 A Comparable Facility shall be defined as an operating oil

refinery and located within the certified service territory of the Toledo Edison

Company, as such service territory is defined on January 1, 1996.

{¶ 75} “9.2 If the Company provides an arrangement, rates or charges

which is or may be in effect at any time during the term of this Agreement, to a

Comparable Facility within its certified territory, then the Customer will have the

right to utilize that arrangement, rates or charges for its Facility. The Customer

must comply with all other terms and conditions of the arrangement including

firm and interruptible load characteristics/conditions.”

{¶ 76} The commission determined that this section did not specifically

discuss the duration of the contract. Nothing mentions the length of time that the

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contract is in effect. Section 9 of Sunoco’s ESA does refer to “an arrangement,

rates or charges,” which, if offered to a comparable facility, will be available to

the customer. Section 9.1 defines a comparable facility, and Section 9.2 offers a

“right to utilize” a similar arrangement, i.e., provides price protection between

comparable facilities during the term of the ESA. As the commission correctly

noted, neither paragraph of Section 9 deals with the termination date of the ESA.

The title "Comparable Facility Price Protection" for this clause simply describes

the language of this “most-favored-nation clause,” and the title does not limit or

extend its scope or intent.

Reading of First Sentence of Clause

{¶ 77} The second alleged error relates to the commission’s reading of the

first sentence of Section 9.2. “If the Company provides an arrangement, rates or

charges which is or may be in effect at any time during the term of this

Agreement, to a Comparable Facility within its certified territory, then the

Customer will have the right to utilize that arrangement, rates or charges for its

Facility.” Instead of seeing this sentence as guaranteeing a customer an

opportunity to obtain treatment similar to that of a comparable facility during the

ESA’s term, the majority states that it “merely means that Sunoco can invoke the

most-favored-nation clause only ‘during the term of this Agreement.’ Stated

another way, the first sentence limits Toledo Edison’s obligations under the most-

favored-nation clause to the ‘term of this Agreement,’ meaning that Sunoco has

no right to invoke the clause after the agreement has expired.” This seems to me

to rewrite the language.

{¶ 78} More importantly, the commission has been reasonable in

observing that the duration or “term” of the contract is referred to separately in

Sunoco’s ESA from the “terms and conditions of the arrangement.” The

distinction is also seen in the second sentence of Section 9.2, which gives the

customer a reciprocal obligation: “The Customer must comply with all other

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January Term, 2011

terms and conditions of the arrangement including firm and interruptible load

characteristics/conditions.” (Emphasis added.)

{¶ 79} Thus, if the company provides an “arrangement, rates or charges”

while the agreement is in effect, i.e., at any time during the term, to a comparable

facility (a competitor of the customer), the customer will then have the right to

utilize that arrangement, rates or charges for its own facility. There is no need to

reword the clause—an arrangement that benefits the competitor within the

meaning of this section gives the customer the opportunity to make the same

arrangement.

The Meaning of “Arrangement”

{¶ 80} The majority interprets the term “arrangement” through a

complicated method while ignoring a fundamental point. Although the word

“arrangement” is undefined within the contract, the term has a specific meaning

set forth in R.C. 4905.31. R.C. 4905.31, which governs an ESA, states that a

public utility is not prohibited from “filing a schedule or establishing or entering

into any reasonable arrangement with another public utility or with one or more

of its customers, consumers, or employees* * *providing for any of the

following:

{¶ 81} “(A) The division or distribution of its surplus profits;

{¶ 82} “(B) A sliding scale of charges, including variations in rates based

upon stipulated variations in cost as provided in the schedule or arrangement[;]

{¶ 83} “(C) A minimum charge for service to be rendered unless such

minimum charge is made or prohibited by the terms of the franchise, grant, or

ordinance under which such public utility is operated;

{¶ 84} “(D) A classification of service based upon the quantity used, the

time when used, the purpose for which used, the duration of use, and any other

reasonable consideration;

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SUPREME COURT OF OHIO

{¶ 85} “(E) Any other financial device that may be practicable or

advantageous to the parties interested.” (Emphasis added.)

{¶ 86} Significantly the term “arrangement” does not include duration of

the contract or the contract term. The statute establishes the obligation of the

utility to file the “schedule or arrangement” with the PUCO, and the section

concludes, “ Every such schedule or reasonable arrangement shall be under the

supervision and regulation of the commission, and is subject to change, alteration,

or modification by the commission.” (Emphasis added.) The ESA thus relates to

special pricing, and “arrangement” refers to the types of “financial devices” that

are listed in R.C. 4905.31.

Other Jurisdictions

{¶ 87} Courts “consistently have found that contracts with most favored

nation clauses end on the termination date specified in the contract unless the

contract itself contains specific language authorizing an extension of the contract's

term.” Majority opinion at ¶ 48. See Baker Car & Truck Rental, Inc. v. Little

Rock (1996), 325 Ark. 357, 362, 925 S.W.2d 780. See also Waterloo Furniture

Components, Ltd. v. Haworth, Inc. (C.A.7, 2006), 467 F.3d 641, 646 (a most-

favored-nation clause "only provides insight into the parties [sic] obligations

during the term of the contract. It does not extend the Agreement past its express

termination date"). The fact that the contracts in these cases were attempted to be

extended after their expiration, while Sunoco tried to extend the express

termination date before the ESA expired, is not significant—the point is that the

most-favored-nation clause does not function to extend the ESA’s duration unless

authority to do so exists within the contract.

{¶ 88} As an example of the type of extension authority expressed within

a contract, the most-favored-nation clause at issue in Saikhon, Inc. v. United Farm

Workers of Am., AFL-CIO (1980), 104 Cal.App.3d 1, 163 Cal.Rptr. 488, 489,

specifically authorized a contracting party to extend its contract to a "termination

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January Term, 2011

date" negotiated by the union with another produce company "during the term" of

the agreement. This type of language is noticeably absent from Sunoco’s ESA.

{¶ 89} The Minnesota Supreme Court held that a purchaser of electricity

could not, under the most-favored-nation clause, extend the duration of its

contract based upon the electric utility's contract with another customer. Eveleth

Taconite Co. v. Minnesota Power & Light Co. (1974), 301 Minn. 20, 221 N.W.2d

157. The court stated that the phrase "terms or conditions," as used in the most-

favored-nation clause, “was intended by the parties to mean the covenants and

provisions” of the agreement “other than its duration and that the word ‘term’ * *

* has a distinct meaning signifying the period of duration of the contract during

which more favorable terms and conditions could, upon the election of plaintiff,

be substituted into the agreement.” Id. at syllabus. Eveleth relied upon a

Colorado decision that also distinguished a contract's “term" or duration from the

contract’s “terms,” which are the “ ‘conditions, limitations and propositions which

comprise and govern the acts which the contracting parties agree expressly or

impliedly to do or not to do.’ ” Id. at 161, quoting Hurd v. Whitsett (1878), 4

Colo. 77, 84. As Eveleth explained, the use of two separate phrases in the most-

favored-nation clause, that is, “term” and “terms or conditions” in different parts

of the clause and in different contexts, was further evidence that the parties had

intended those words to have different meanings. Id. Although the majority

attempts to distinguish Eveleth on the ground that it uses the phrase “arrangement,

rates and changes” in place of “terms or conditions,” this is a distinction without a

difference. There is no authority within the ESA for Sunoco to extend its own

contract term simply because BP took advantage of an opportunity to lengthen its

ESA with Toledo Edison.

Conclusion

{¶ 90} I cannot agree with the majority opinion that a most-favored-nation

clause is a tool for extending a contract term beyond its termination date. Nothing

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SUPREME COURT OF OHIO

in Sunoco’s ESA gives it that authority. Section 8 language relates to the “term

and effective date” of the contract, while Section 9 includes the “arrangements,

rates and charges” that are to be offered to a competitor during a contract term.

Had Sunoco wished to obtain a longer ESA, it could have negotiated such an

agreement by including specific language authorizing a longer or extended term,

or it could have opted to extend its contract duration in the summer of 2004 as

authorized by the commission's RSP order. Because it did neither, the commission

did not err in denying Sunoco the relief it requested.

{¶ 91} I respectfully dissent and would hold that the PUCO acted

reasonably in determining that Sunoco’s contract ended in February, rather than

December, 2008. I would affirm the PUCO orders in all respects.

__________________

CUPP, J., dissenting.

{¶ 92} I remain unconvinced that the term “arrangement,” as used in the

Sunoco, Inc. (R & M) – Toledo Edison Company electric-service agreement,

includes within its meaning the duration of the contract such that Sunoco may

utilize the longer duration of the BP Oil Company – Toledo Edison contract to

extend the duration of its own special contract over the objection of Toledo

Edison.

{¶ 93} The language employed in the Sunoco-Toledo Edison special

contract uses the terminology “arrangement, rates or charges” to describe what

provisions in Toledo Edison special contracts with other customers Sunoco may

take advantage of.

{¶ 94} R.C. 4905.31, which permits such special contracts between public

utilities and their customers upon approval of the Public Utilities Commission of

Ohio (“PUCO”), includes an illustrative list of such “arrangement[s].” None of

them involve the duration of a special contract. Rather, it is clear that they

involve conditions of service, as well as rates and charges. Because the Sunoco-

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January Term, 2011

Toledo Edison contract already separately uses the terminology “rates and

charges,” it is reasonable to conclude that the plain meaning of the word

“arrangement,” as used in the special Sunoco-Toledo Edison contract, necessarily

means something akin to conditions of service and similar matters.

{¶ 95} Moreover, the PUCO, which must approve these special contracts,

has also construed the term “arrangement” to mean something other than duration

of the contract. Because of the oversight that the statute grants the PUCO over

these contracts, and because the PUCO must approve the special contracts before

they can become effective, it is evident that the PUCO has special expertise in this

matter. I would defer to the PUCO’s determination, in which it has used its

special expertise, that the term “arrangement” does not include the duration of the

special contract such that Sunoco may extend the length of its own contract with

Toledo Edison based upon the length of BP’s special contract with Toledo

Edison.

{¶ 96} Therefore, I respectfully dissent.

O’DONNELL, J., concurs in the foregoing opinion.

__________________

Boehm, Kurtz & Lowry and David F. Boehm, for appellant.

Michael DeWine, Attorney General, and John H. Jones, William L.

Wright, and Thomas W. McNamee, Assistant Attorneys General, for appellee

Public Utilities Commission of Ohio.

Calfee, Halter & Griswold, James F. Lang, and N. Trevor Alexander; and

Mark A. Hayden, for intervening appellee Toledo Edison Company.

______________________

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