investment in cancelled nuclear plants not chargeable to ratepayers
How later courts described this case
- investment in cancelled nuclear plants not chargeable to ratepayers
Written by the judges who cited it.
The opinion
Locher, J.,
dissenting. R.C. 4905.26 provides, in part: “* * * upon the initiative or complaint of the public utilities commission, that any rate * * * is in any respect * * * in violation of law * * *, the commission shall fix a time for hearing * * *.” The majority correctly observes that this provision permits a collateral attack on the commission’s order. Under our holding in Consumers’ Counsel v. Pub. Util. Comm. (1981), 67 Ohio St. 2d 153 [21 O.O. 3d 96], the rate authorized by the PUCO in this case is in violation of the law to the extent that the commission included as expenses an amortized portion of Toledo Edison’s investment in the nuclear facilities. Therefore, it was not necessary under R.C. 4905.26 for OCC to appeal the June 3,1981, order of the commission on rehearing in order to eliminate those costs from the rates charged to Toledo Edison customers.
If the commission had merely reduced the total rate accordingly, I would have no quarrel with the result. Instead, the commission replaced the amortization allowance with expenses which it had previously refused to consider in calculating the rate. This permits the utility to “swap and shop.” That is, the utility can appease its customers by understating its rate request during the rate case while including a potentially questionable item. Meanwhile, the utility can set aside other expense items which it can substitute should the questionable expense fail during a later R.C. 4905.26 proceeding.
Regrettably, this substitution approach to R.C. 4905.26 undermines the basic structure of utility proceedings. Rate cases are detailed undertakings. They require the utility, the commission and the public to scrutinize a test year, including a date certain, in order to arrive at a reasonable rate for the customers and a reasonable rate of return for the utility. R.C. 4909.15. That is why R.C. 4905.26 permits only collateral attack on those rates which are “bad” rates, not substitution of those rates which could have been “good” rates had the utility asked for them.
I would, therefore, remand this cause to the PUCO and order the commission to reduce the total rate by the amount of the amortization of the nuclear facility costs.