The opinion
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as In
re Establishing the Solar Generation Fund Rider, Slip Opinion No. 2022-Ohio-4348.]
NOTICE
This slip opinion is subject to formal revision before it is published in an
advance sheet of the Ohio Official Reports. Readers are requested to
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
South Front Street, Columbus, Ohio 43215, of any typographical or other
formal errors in the opinion, in order that corrections may be made before
the opinion is published.
SLIP OPINION NO. 2022-OHIO-4348
IN THE MATTER OF ESTABLISHING THE SOLAR GENERATION FUND RIDER
PURSUANT TO R.C. 3706.46;
OHIO MANUFACTURERS’ ASSOCIATION ENERGY GROUP, APPELLANT; PUBLIC
UTILITIES COMMISSION, APPELLEE; OHIO POWER COMPANY, INTERVENING
APPELLEE.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as In re Establishing the Solar Generation Fund Rider, Slip
Opinion No. 2022-Ohio-4348.]
Public utilities—R.C. 3706.46—Public Utilities Commission’s order authorizing
solar-generation-fund rider affirmed in part and reversed in part and cause
remanded for clarification.
(No. 2021-1374—Submitted July 12, 2022—Decided December 7, 2022.)
APPEAL from the Public Utilities Commission, No. 21-447-EL-UNC.
____________________
SUPREME COURT OF OHIO
O’CONNOR, C.J.
{¶ 1} This appeal arises from an order of the Public Utilities Commission
that authorized a recovery mechanism referred to as the solar-generation-fund rider
(“Rider SGF”). Ohio electric-distribution utilities charge Rider SGF each month
to their retail customers, but they do not retain the money recovered through it.
Instead, they pass the money through to the solar generation fund, which is then
used to subsidize the operations of qualifying solar-resource generators in Ohio.
{¶ 2} The Ohio Manufacturers’ Association Energy Group (“OMAEG”),
filed this appeal raising various challenges to the amount and structure of Rider
SGF.
{¶ 3} For the reasons discussed below, we affirm in part and reverse in part
the commission’s order and remand the cause to the commission for clarification
on one issue.
I. FACTS AND PROCEDURAL BACKGROUND
A. 2019 Am.Sub.H.B. No. 6 and 2021 Am.Sub.H.B. No. 128
{¶ 4} In October 2019, Am.Sub.H.B. No. 6 (“H.B. 6”) went into effect.
Among other things, the bill authorized payments to subsidize the operations of
certain in-state nuclear-energy- and renewable-energy-resource facilities. H.B. 6
established a “nuclear generation fund” that would allow for total disbursements of
$150 million annually to qualifying nuclear generators and a “renewable generation
fund” that would allow for annual disbursements of $20 million to “qualifying
renewable resource” facilities. Former R.C. 3706.46, 2019 Am.Sub.H.B. No. 6.
To generate revenue for both funds, the bill required each Ohio electric-distribution
utility to collect a monthly charge from all customers. Id.
{¶ 5} In June 2021, the General Assembly enacted Am.Sub.H.B. No. 128
(“H.B. 128”), which repealed certain portions of H.B. 6, including those related to
the creation of the nuclear generation fund, but left in place the renewable
generation fund, which was renamed the “solar generation fund.” H.B. 128 retained
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January Term, 2022
from H.B. 6 the requirement that disbursements from the solar generation fund
would be capped at $20 million annually. R.C. 3706.46. It also retained the
requirement that revenue for the solar generation fund would be generated through
a monthly retail charge to customers that would be billed and collected by the Ohio
electric-distribution utilities. Id.
{¶ 6} The commission has discretion to determine “the method by which
the revenue is allocated or assigned to each electric distribution utility for billing
and collection,” with certain limits that are not relevant here. R.C. 3706.46(A)(2).
And the commission is authorized to determine “the level and structure of any
charge to be billed and collected by each electric distribution utility,” but there are
specific limits on the monthly amounts that residential and certain nonresidential
customers may be charged. R.C. 3706.46(B).
B. The commission’s proceedings
{¶ 7} In April 2021, the commission opened a case for the purpose of
establishing a new recovery mechanism under R.C. 3706.46 that would be used to
meet the annual revenue requirement for the solar generation fund. The
commission staff filed comments and recommendations regarding the proposed
Rider SGF. Several parties filed comments for and against the commission staff’s
recommendations.
{¶ 8} On July 14, 2021, the commission issued an order establishing Rider
SGF as the recovery mechanism that would be used to provide revenue for the solar
generation fund. OMAEG filed an application for rehearing, which the commission
denied.
{¶ 9} OMAEG appealed to this court. The commission has filed a brief in
defense of its order. The Ohio Power Company has intervened as an appellee to
oppose reversal.
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II. STANDARD OF REVIEW
{¶ 10} “R.C. 4903.13 provides that a [Public Utilities Commission] 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 commission
decision as to questions of fact when the record contains sufficient probative
evidence to show that the commission’s decision 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.
The 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.
{¶ 11} Although this court has “complete and independent power of review
as to all questions of law” in appeals from the Public Utilities Commission, 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 when “highly
specialized issues” are involved and when “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).
III. DISCUSSION
{¶ 12} OMAEG raises five propositions of law. As will be discussed, we
remand this matter to the commission for clarification of the issue addressed in
OMAEG’s fourth proposition of law, but the remaining propositions lack merit.
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January Term, 2022
A. Proposition of law No. I: Whether the commission erred by establishing an
annual revenue requirement of $20 million for Rider SGF
{¶ 13} In its first proposition of law, OMAEG argues that the commission
erred when it established a fixed annual revenue requirement of $20 million for
Rider SGF. The provision at issue here is R.C. 3706.46(A)(1), which provides:
Beginning for all bills rendered on or after January 1, 2021,
by an electric distribution utility in this state, such electric
distribution utility shall collect from all of its retail electric
customers in this state, each month, a charge which, in the aggregate,
is sufficient to produce a revenue requirement of twenty million
dollars annually for total disbursements required under section
3706.55 of the Revised Code from the solar generation fund.
{¶ 14} OMAEG asserts that in enacting R.C. 3706.46(A)(1), the General
Assembly tied the annual revenue requirement to R.C. 3706.55, which remits
money from the solar generation fund to qualifying-solar-resource operators based
on their generation output.1 Under OMAEG’s reading of R.C. 3706.46(A)(1), the
amount collected from customers each year through the Rider SGF cannot exceed
what is needed to pay the disbursements earned each year by solar-resource
operators under R.C. 3706.55, up to a maximum amount of $20 million.
{¶ 15} The commission and Ohio Power argue that R.C. 3706.46(A)(1)
clearly establishes a fixed annual revenue requirement of $20 million and does not
condition the collection of funds through Rider SGF on the generation output of the
1. R.C. 3706.55 requires the Ohio Air Quality Development Authority to direct the state treasurer
to remit monies from the solar generation fund to qualifying-solar-resource operators in an amount
that is based on the number of solar energy credits earned for each megawatt hour the resource
produced and reported to the authority under R.C. 3706.45.
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SUPREME COURT OF OHIO
solar resources. For the reasons explained below, we agree with the commission
and Ohio Power and therefore reject OMAEG’s first proposition of law.
1. The plain language of R.C. 3706.46(A)(1) establishes a fixed annual
revenue requirement of $20 million
{¶ 16} As with any question involving statutory construction, our analysis
must begin with the language of the statute. In re Application of Duke Energy Ohio,
Inc., 150 Ohio St.3d 437, 2017-Ohio-5536, 82 N.E.3d 1148, ¶ 19. R.C.
3706.46(A)(1) requires the commission to establish a recovery mechanism that “is
sufficient to produce a revenue requirement of twenty million dollars annually for
total disbursements required under section 3706.55 of the Revised Code from the
solar generation fund.”
{¶ 17} As noted, OMAEG argues that R.C. 3706.46(A)(1) does not
automatically fix the annual revenue requirement at $20 million. OMAEG
maintains that when the word “sufficient” in R.C. 3706.46(A)(1) is read in
conjunction with the phrase “for total disbursements required under section
3706.55 of the Revised Code,” it is clear that the revenue required is the amount
necessary to fund the disbursements committed to be paid out of the solar
generation fund, up to $20 million.
{¶ 18} OMAEG invokes the statute’s use of the word “sufficient” but never
discusses the words that immediately follow it. OMAEG ignores the words “to
produce a revenue requirement of twenty million dollars annually.” Thus, when all
the words in the statute are read in context, R.C. 3706.46(A)(1) plainly requires the
recovery mechanism to be set at an amount that is “sufficient to produce a revenue
requirement of twenty million dollars annually.”
{¶ 19} OMAEG likewise reads out of context the phrase “for total
disbursements required under section 3706.55 of the Revised Code” in R.C.
3706.46(A)(1). Contrary to OMAEG’s assertion, this phrase is not a reference to
how much money must go into the fund each year. Instead, when read in
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January Term, 2022
conjunction with the phrase “sufficient to produce a revenue requirement of twenty
million dollars annually,” the phrase “for total disbursements” refers to the fact that
annual expenditures from the fund are limited to $20 million.
{¶ 20} Stated differently, OMAEG interprets R.C. 3706.46(A)(1) as though
it included the italicized words in the following sentence:
[A]n electric distribution utility in this state * * * shall collect * * *
a charge which * * * is sufficient to produce a revenue requirement
of up to twenty million dollars annually for total disbursements
required under section 3706.55 of the Revised Code from the solar
generation fund.
But the General Assembly did not write R.C. 3706.46(A)(1) that way. And in
construing a statute, a court may not add or delete words. State ex rel. Cincinnati
Bell Tel. Co. v. Pub. Util. Comm., 105 Ohio St.3d 177, 2005-Ohio-1150, 824
N.E.2d 68, ¶ 32.
2. The commission did not violate R.C. 4903.09
{¶ 21} OMAEG additionally argues under its first proposition of law that
the commission’s decision to set the annual revenue requirement at $20 million
lacked any citation to the record, in violation of R.C. 4903.09. Under R.C. 4903.09,
an order of the commission in a contested case must provide, in sufficient detail,
the facts in the record upon which the order is based and the reasoning behind the
commission’s conclusion. MCI Telecommunications Corp. v. Pub. Util. Comm.,
32 Ohio St.3d 306, 312, 513 N.E.2d 337 (1987). According to OMAEG, the
commission erred in failing to cite evidence that demonstrates (1) the number of
qualifying solar resources in Ohio that have applied to receive disbursements from
the solar generation fund, (2) the generation output of those qualifying resources,
(3) the number of solar energy credits earned by each qualifying solar resource, and
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SUPREME COURT OF OHIO
(4) a calculation of the amount of revenue needed to pay the disbursements from
the fund for the solar energy credits that were earned. OMAEG maintains that
without these findings of fact, the commission was unable to establish an annual
revenue requirement that complies with R.C. 3706.46(A)(1).
{¶ 22} But it was not necessary for the commission to cite evidence
supporting its decision, because, as we hold above, R.C. 3706.46(A)(1) itself
establishes the fixed annual revenue requirement. The question is one of law, not
fact. OMAEG’s argument to the contrary hinges on its claim that R.C.
3706.46(A)(1) does not establish a fixed annual revenue requirement of $20
million. Having rejected that argument, we also reject OMAEG’s argument that
the commission violated R.C. 4903.09.
B. Proposition of law No. II: Whether the commission violated R.C. 3706.46(B)
when it established Rider SGF on a per-account basis
{¶ 23} OMAEG argues under its second proposition of law that the
commission erred by establishing Rider SGF on a per-account basis because the
plain language of R.C. 3706.46(B) unequivocally directs the commission to
implement the charge on a per-customer basis. To generate revenue for the solar
generation fund, R.C. 3706.46(B) requires the commission to implement the “per-
customer monthly charge” that each electric-distribution utility is to bill and collect
from its residential and nonresidential customers. According to OMAEG, this
means that electric-distribution utilities must treat a customer with multiple billing
accounts as a single customer and charge Rider SGF only once per month, instead
of charging the rider for each account a customer maintains.
1. The commission’s interpretation of “per customer”
{¶ 24} The commission rejected OMAEG’s argument that it was required
to implement Rider SGF on a per-customer basis. The commission determined that
the word “customer” in R.C. 3706.46(B) is clear and unambiguous. Therefore, the
commission determined that “Rider SGF will be collected in the same manner that
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January Term, 2022
all other riders are collected by [electric-distribution utilities]–in connection with
each billing account established in accordance with the applicable contract or
tariff.” Pub. Util. Comm. No. 21-447-EL-UNC, 2021 WL 3036724, ¶ 16 (July 14,
2021). As a result, the commission concluded that “nonresidential customers shall
not be permitted to aggregate or group their billing accounts in order to avoid
paying Rider SGF amounts.” Id.
{¶ 25} The commission based its decision on Ohio Adm.Code 4901:1-10-
01(I), which defines “customer” as “any person who has an agreement, by contract
and/or tariff with an electric utility * * * to receive service.” The commission cited
a prior decision, In re Establishing the Nonbypassable Recovery Mechanism for
Net Legacy Generation Resource Costs Pursuant to R.C. 4928.148, Pub. Util.
Comm. No. 19-1808-EL-UNC, ¶ 27 (Nov. 21, 2019), and rehearing entry, 2020
WL 12813040, ¶ 12 (Jan. 15, 2020), in which it had applied this definition in
rejecting the same argument by OMAEG in relation to a different rider. The
commission determined in that case that based on the definition in Ohio Adm.Code
4901:1-10-01(I), “customer” status depends on the contract or tariff relationship
between an electric-distribution utility and the party that receives electric services,
and that relationship attaches responsibility for payment to an account or accounts.
Consistent with this definition and the historic utility practices used to collect on
charges in connection with each billing account in accordance with the applicable
tariff or contract, the commission determined that “customer” is synonymous with
“account.”
2. OMAEG has not shown that the commission erred in establishing Rider
SGF on a per-account basis
{¶ 26} OMAEG’s primary argument on this issue is that the commission
“cannot lawfully construe the meaning of ‘per-customer’ to mean ‘per-billing
account.’ ” According to OMAEG, because no ambiguity exists in the phrase “per-
customer monthly charge” in R.C. 3706.46(B), the only reasonable interpretation
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SUPREME COURT OF OHIO
is that Rider SGF must be charged once per month to each electric-distribution-
utility customer, regardless of how many accounts the customer has. OMAEG has
failed to demonstrate error.
{¶ 27} It is well established that in construing statutes, when a word has a
technical definition that is different from its dictionary definition, it must be
construed according to the former. Hoffman v. State Med. Bd. of Ohio, 113 Ohio
St.3d 376, 2007-Ohio-2201, 865 N.E.2d 1259, ¶ 26, citing Youngstown Sheet Tube
Co. v. Lindley, 56 Ohio St.2d 303, 309, 383 N.E.2d 903 (1978); see also R.C. 1.42
(“Words and phrases that have acquired a technical or particular meaning, whether
by legislative definition or otherwise, shall be construed accordingly”).
{¶ 28} We presume commission orders to be reasonable, and OMAEG, as
the appellant, must overcome that presumption. In re Application of Columbus S.
Power Co., 129 Ohio St.3d 271, 2011-Ohio-2638, 951 N.E.2d 751, ¶ 17. OMAEG,
however, completely ignores the commission’s legal rationale for finding that Rider
SGF should be applied on a per-account basis. In its main brief, OMAEG does not
even mention, let alone offer an argument against, the definition of “customer” in
Ohio Adm.Code 4901:1-10-01(I), which formed the legal basis for the
commission’s determination.
{¶ 29} A rule adopted by an administrative agency is valid and enforceable
unless it is unreasonable or in conflict with the statutory enactment covering the
same subject matter. Wymsylo v. Bartec, Inc., 132 Ohio St.3d 167, 2012-Ohio-
2187, 970 N.E.2d 898, ¶ 39. Yet OMAEG has failed to challenge the commission’s
application of the Administrative Code’s definition of “customer.” This defeats
OMAEG’s argument that the commission violated R.C. 3706.46(B) in applying
Rider SGF on a per-account basis. See Lycourt-Donovan v. Columbia Gas of Ohio,
Inc., 152 Ohio St.3d 73, 2017-Ohio-7566, 93 N.E.3d 902, ¶ 51; In re Fuel
Adjustment Clauses of Columbus S. Power Co. & Ohio Power Co., 140 Ohio St.3d
352, 2014-Ohio-3764, 18 N.E.3d 1157, ¶ 41.
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January Term, 2022
{¶ 30} OMAEG does mount a challenge to the administrative rule’s
definition of “customer” in its reply brief. OMAEG, however, is barred from
raising new arguments for the first time on reply. Util. Serv. Partners, Inc. v. Pub.
Util. Comm., 124 Ohio St.3d 284, 2009-Ohio-6764, 921 N.E.2d 1038, ¶ 54.
OMAEG is also barred from raising this argument because it did not specify the
argument in its application for rehearing before the commission as R.C. 4903.10
requires.
{¶ 31} In the end, it is established doctrine that a party who contends that
rates and charges are unreasonable or unlawful bears the burden of demonstrating
reversible error on appeal. In re Application of Columbus S. Power Co., 128 Ohio
St.3d 512, 2011-Ohio-1788, 947 N.E.2d 655, ¶ 56. OMAEG cannot prevail on a
challenge that the commission misinterpreted the word “customer” if it does not
challenge the definition that the commission applied to that word. See Columbus
S. Power, 129 Ohio St.3d 271, 2011-Ohio-2638, 951 N.E.2d 751, at ¶ 19; Duke
Energy, 150 Ohio St.3d 437, 2017-Ohio-5536, 82 N.E.3d 1148, at ¶ 25. We
therefore reject OMAEG’s second proposition of law.
C. Proposition of law No. III: Whether the commission violated R.C.
3706.46(B) by failing to limit application of the $242 monthly cap on Rider
SGF to industrial customers eligible to become self-assessing purchasers
{¶ 32} In its third proposition of law, OMAEG argues that the commission
violated R.C. 3706.46(B), which limits the amounts that electric-distribution
utilities can bill residential and nonresidential customers each month for Rider SGF.
R.C. 3706.46(B) provides:
In authorizing the level and structure of any charge to be
billed and collected by each electric distribution utility, the
commission shall ensure that the per-customer monthly charge for
residential customers does not exceed ten cents and that the per-
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customer monthly charge for industrial customers eligible to
become self-assessing purchasers pursuant to division (C) of section
5727.81 of the Revised Code does not exceed two hundred forty-two
dollars. For nonresidential customers that are not self-assessing
purchasers, the level and design of the charge shall be established in
a manner that avoids abrupt or excessive total net electric bill
impacts for typical customers.
(Emphasis added.)
{¶ 33} The commission rejected OMAEG’s argument that the $242
monthly rate cap under this provision applied only to industrial customers eligible
to become self-assessing purchasers. The commission instead accepted its staff’s
recommendation to cap the rate for all nonresidential customers that are eligible to
become self-assessing purchasers.
{¶ 34} OMAEG maintains that R.C. 3706.46(B) expressly applies the $242
monthly cap only to industrial customers that are eligible to become self-assessing
purchasers and that the commission erred by extending the rate cap to all
nonresidential customers that are eligible to become self-assessing purchasers.
OMAEG additionally argues that the commission’s application of the rate cap to
nonindustrial customers violates the statutory interpretation canon “expressio unius
est exclusio alterius.”2
{¶ 35} As will be discussed, OMAEG fails to show that the commission
erred or to explain how its members were prejudiced or harmed by the
commission’s decision.
2. The interpretive cannon “expressio unius est exclusio alterius” provides that the expression of
one item in an associated group or series excludes unmentioned items. Natl. Labor Relations Bd. v.
SW Gen., Inc., 580 U.S. 288, __, 137 S.Ct. 929, 940, 197 L.Ed.2d 263 (2017), citing Chevron U.S.A.
Inc. v. Echazabal, 536 U.S. 73, 80, 122 S.Ct. 2045, 153 L.Ed.2d 82 (2002); see also Summerville v.
Forest Park, 128 Ohio St.3d 221, 2010-Ohio-6280, 943 N.E.2d 522, ¶ 35-36.
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January Term, 2022
1. What is an eligible self-assessing purchaser?
{¶ 36} Before addressing OMAEG’s arguments, we discuss R.C.
5727.81(C), which is cross-referenced in R.C. 3706.46(B). R.C. 5727.81(C) sets
forth the requirements and process to become a self-assessing purchaser.
{¶ 37} R.C. 5727.81 concerns the excise tax that is imposed on electric-
distribution utilities for distributing electricity to Ohio consumers. In most
circumstances, the electric-distribution utility pays the excise tax to the tax
commissioner or the state treasurer and then passes the tax on to its customers by
increasing its rates. R.C. 5727.81(A). But R.C. 5727.81(C) allows certain
purchasers of electricity to “self-assess” the excise tax and pay that amount directly
to the taxing authority, thereby relieving the utility of its obligation to pay the excise
tax to the taxing authority. The benefit of self-assessing is that the purchaser is
taxed at a lesser rate than it would be if the utility paid the excise tax. See R.C.
5727.81(A), (C)(2), and (C)(6).
{¶ 38} Under R.C. 5727.81(C)(2), only nonresidential customers that fall
into certain categories may become self-assessing purchasers. One category is
made up of commercial and industrial customers that received or consumed more
than 45 million kilowatt hours of electricity at one location in the preceding year.
Another category is made up of “qualified end users”3 that consumed more than 45
million kilowatt hours of electricity in the preceding year for purposes other than
their qualifying manufacturing process. R.C. 5727.81(C)(2).
{¶ 39} For a customer to operate as a self-assessing purchaser, R.C.
5727.81(C)(6) requires (1) submission of an annual application, (2) payment of an
annual $500 fee, (3) approval from the tax commissioner, and (4) payment of the
3. A “qualified end user” is an end user that (1) uses more than three million kilowatt hours of
electricity at one in-state manufacturing location for a calendar day for use in a qualifying
manufacturing process or (2) uses electricity at an in-state manufacturing location during a chlor-
alkali manufacturing process. R.C. 5727.80(F). A “qualifying manufacturing process” means an
electrochemical or chlor-alkali manufacturing process. R.C. 5727.80(I).
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self-assessed excise tax. See also R.C. 5727.80(J) (defining a “self-assessing
purchaser” as “a purchaser that meets all the requirements of, and pays the excise
tax in accordance with,” R.C. 5727.81(C)).
2. OMAEG fails to challenge the specific ground cited by the commission in
support of its decision
{¶ 40} OMAEG claims that the commission erred when it interpreted the
$242-monthly-cap language in the first sentence of R.C. 3706.46(B) as applying to
all nonresidential customers that are eligible to become self-assessing purchasers,
rather than to only industrial customers. OMAEG, however, misconstrues the
commission’s order. The commission did not cite the first sentence of R.C.
3706.46(B) as authority to extend the rate cap beyond eligible industrial customers.
Instead, the commission found that applying the rate cap to all eligible
nonresidential customers “avoids rate shocks and unreasonable bill outcomes,
consistent with the legislative direction in this area.” Pub. Util. Comm. No. 21-
447-EL-UNC, 2021 WL 3036724, at ¶ 15 (July 14, 2021). This language tracks
the second sentence of R.C. 3706.46(B): “For nonresidential customers that are not
self-assessing purchasers, the level and design of the charge shall be established in
a manner that avoids abrupt or excessive total net electric bill impacts for typical
customers.”
{¶ 41} A party who challenges rates and charges approved by the
commission has the burden on appeal under R.C. 4903.13 of showing that they are
unjust, unreasonable, or unlawful. In re Application of Columbus S. Power Co.,
128 Ohio St.3d 512, 2011-Ohio-1788, 947 N.E.2d 655, at ¶ 56. OMAEG fails to
carry its burden here. At no point under its third proposition of law does OMAEG
challenge, or even mention, the commission’s reliance on the second sentence of
R.C. 3706.46(B) as a ground for extending the rate cap. It is well-settled that we
presume that commission orders are lawful and reasonable and that it falls on the
appellant to overcome that presumption. See Columbus v. Pub. Util. Comm., 170
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January Term, 2022
Ohio St. 105, 163 N.E.2d 167 (1959), paragraph two of the syllabus. As a result,
OMAEG’s failure to directly challenge the commission’s determination as
substantively unlawful or unreasonable is fatal to its argument that the commission
violated R.C. 3706.46(B). See In re Comm. Rev. of Capacity Charges of Ohio
Power Co., 147 Ohio St.3d 59, 2016-Ohio-1607, 60 N.E.3d 1221, ¶ 47.
3. OMAEG also fails to demonstrate prejudice or harm stemming from the
decision
{¶ 42} OMAEG also overlooks a basic prerequisite to reversing a
commission order: the party seeking reversal must show that it has been or will be
harmed or prejudiced by the order, In re Application of Ohio Power Co., 140 Ohio
St.3d 509, 2014-Ohio-4271, 20 N.E.3d 699, ¶ 31; In re Complaint of Buckeye
Energy Brokers, Inc. v. Palmer Energy Co., 139 Ohio St.3d 284, 2014-Ohio-1532,
11 N.E.3d 1126, ¶ 19. OMAEG does not even attempt to show how its members
suffered harm or prejudice from the rate cap’s extension beyond industrial
customers that are eligible to become self-assessing purchasers to eligible
commercial customers and qualified end users. This provides an independent
ground for us to reject OMAEG’s third proposition of law.
D. Proposition of law No. IV: Whether the commission violated Ohio law by
including the Commercial Activity Tax in Rider SGF
{¶ 43} OMAEG argues that the commission erred when it determined that
customers must also pay the commercial activity tax (“CAT”) through Rider SGF.
OMAEG maintains that there is no language in R.C. 3706.46 that allows the
commission to gross up, i.e., adjust upward, the monthly Rider SGF charge to
account for the CAT. OMAEG alternatively asserts that even if the statute is
ambiguous on this point, customers should not be required to pay the CAT, because
Rider SGF merely collects subsidies to support private solar-energy generators and
does not recover costs for any goods or services provided to customers by the
electric-distribution utilities.
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{¶ 44} In response, the commission asserts that OMAEG fundamentally
misunderstands how the commission’s order treats the CAT. The commission
denies that the order grosses up the revenue in Rider SGF to account for the CAT.
According to the commission, the order follows R.C. 3706.46 in setting the amount
of annual revenue from Rider SGF at $20 million and expressly disallows any
adjustment to the rider to account for the CAT.
{¶ 45} For its part, Ohio Power contends that OMAEG unnecessarily
challenges the commission’s decision regarding the CAT. According to Ohio
Power, the Rider SGF funds it collects are not subject to the CAT and, in turn, Ohio
Power is not grossing up the amount of Rider SGF to offset its CAT liability and
pass it on to customers. Arguing that OMAEG has not raised a valid controversy,
Ohio Power urges this court to affirm the commission’s CAT determination.
{¶ 46} For the reasons explained below, we remand the case to the
commission for clarification on this issue.
1. Background on the commission’s CAT determination
{¶ 47} The CAT is levied “on each person with taxable gross receipts for
the privilege of doing business in this state.” R.C. 5751.02(A). See also R.C.
5751.01(A) (defining “person” for purposes of the CAT as including companies
“and any other entities”). R.C. 5751.02(A) defines “doing business” as “engaging
in any activity, whether legal or illegal, that is conducted for, or results in, gain,
profit, or income, at any time during a calendar year.” The statute specifies that the
CAT is “imposed on the person receiving the gross receipts and is not a tax imposed
directly on a purchaser.” R.C. 5751.02(A). Likewise, R.C. 5751.02(B) prohibits
the CAT from being “billed or invoiced to another person.” However, the taxpayer
is permitted to recoup its CAT liability by including it in the price it charges for
goods or services. R.C. 5751.02(B)(1).
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{¶ 48} In the proceedings below, the commission’s staff recommended that
the CAT be included in the monthly Rider SGF charge to residential and
nonresidential customers of the Ohio electric-distribution utilities.
{¶ 49} OMAEG objected to the commission staff’s recommendation that
customers be responsible for paying the CAT through Rider SGF. OMAEG argued
that electric-distribution utilities are responsible for paying the CAT under R.C.
5751.02 and that CAT liability cannot be shifted to customers, because Rider SGF
is not recovering costs for any services provided by the utilities. OMAEG also
argued that R.C. 3706.46 contains no language that allows electric-distribution
utilities to pass the CAT through to its customers.
{¶ 50} Two electric-distribution utilities weighed in as well. Like OMAEG,
Ohio Power maintained that the revenues recovered by the electric-distribution
utilities through Rider SGF are not subject to the CAT. Conversely, the Dayton
Power and Light Company maintained that electric-distribution utilities will be
subject to the CAT on revenues collected via Rider SGF and that failing to gross
up rider revenues by the amount of the CAT liability will result in electric-
distribution utilities incurring CAT costs without offsetting revenue.
{¶ 51} Against this backdrop, the commission made conflicting, or at a
minimum confusing, rulings. In one part of its order, the commission expressly
determined that “[e]ach [electric-distribution utility] will charge its residential
customers $0.10 per month, including CAT.” Pub. Util. Comm. No. 21-447-EL-
UNC, 2021 WL 3036724, at ¶ 19(a) (July 14, 2021). The commission, however,
made no mention in this part of its order whether the nonresidential-customer
charge would include the CAT.
{¶ 52} In another part of the order, the commission offered a confusing
discussion regarding its authority to adjust the Rider SGF to account for any CAT
offset. The commission determined that R.C. 3706.46 required that the solar
generation fund be established “without consideration of any CAT adjustment, at
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an annual amount of $20,000,000.” Id. at ¶ 14. The commission reasoned that “had
the legislature intended to establish the [solar generation fund] at an adjusted
amount to account for any CAT offset, it would have expressly done so.” Id.
Accordingly, the commission held that electric-distribution utilities “should collect
the fixed amount required by the solar generation fund without regard to any CAT
offset.” Id.
{¶ 53} On rehearing, the commission reaffirmed its analysis and clarified:
Relative to whether CAT amounts are properly included for
recovery in Rider SGF, we again reject OMAEG’s claimed error.
Consistent with our analysis earlier herein, the legislature was aware
of our prior statutory interpretation as to this issue, which disfavored
reducing rider recoveries to account for any CAT offset, when it
enacted H.B. 128. We clarify that the residential customer charge
of $0.10 per month is the fixed amount required by the statute
without regard to any CAT offset and is not subject to further
adjustment. Subject to this clarification, we affirm that the
enactment of H.B. 128 without any modification regarding CAT
recoveries speaks to the legislative intent as to this issue.
Pub. Util. Comm. No. 21-447-EL-UNC, rehearing entry, 2021 WL 4149861, ¶ 14
(Sept. 8, 2021).
2. The commission’s CAT determination requires clarification
{¶ 54} As we understand the commission’s argument in this appeal, it
claims that under its order, no CAT amounts are to be included in Rider SGF,
because R.C. 3706.46 does not allow the commission to adjust the revenue
recovered under the rider to account for the CAT. While the order may be read the
way the commission suggests, that is not the only plausible reading.
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{¶ 55} The commission’s order can just as easily be read as holding that the
CAT may properly be included in the rider. As noted above, the commission held
on rehearing that it lacked authority to reduce Rider SGF recoveries to offset the
CAT. But if the CAT were not included in the monthly rider charge, there would
be no reason to determine whether the commission had authority to reduce the rider
charge to “offset” the CAT.
{¶ 56} In our view, the commission had the analysis backwards. The
commission considered whether it had authority to either gross up or reduce the
rider to offset the CAT. What the commission should have asked instead was (1)
whether the revenue collected by electric-distribution utilities through Rider SGF
was subject to the CAT and (2) if so, whether it was appropriate to shift the CAT
liability from electric-distribution utilities onto customers by including CAT
amounts in the rider.
{¶ 57} Because the commission’s CAT determination can be read two
ways, we remand this case to the commission for clarification on this issue. On
remand, the commission is instructed to expressly determine whether the revenue
recovered by Rider SGF is subject to the CAT and billable to customers.
E. Proposition of law No. V: Whether the commission erred in failing to
require refund language in the tariffs to Rider SGF
{¶ 58} OMAEG argues that the commission erred when it failed to require
refund language in the tariffs implementing Rider SGF. OMAEG acknowledges
that R.C. 3706.55(B) provides for a refund to customers of “any amounts remaining
in the [solar generation] fund as of December 31, 2027, minus the remittances that
are required to be made between that date and January 21, 2028.” But it asserts that
the commission should have ordered electric-distribution utilities to include the
necessary refund language in the Rider SGF tariffs to effectuate the refund
provision contained in R.C. 3706.55(B). According to OMAEG, without refund
language in the tariffs, R.C. 4905.32 and the rule against retroactive ratemaking
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may prevent customers from receiving refunds they may otherwise be entitled to
under R.C. 3706.55(B).
{¶ 59} OMAEG overlooks that all Ohio electric-distribution utilities have
included language in their Rider SGF tariffs to effectuate the refund and
reconciliation processes required by R.C. 3706.46(C) and 3706.55(B). Therefore,
OMAEG’s argument is moot. See In re Application of Ohio Edison Co., 157 Ohio
73, 2019-Ohio-2401, 131 N.E.3d 906, ¶ 51 (plurality opinion).
IV. CONCLUSION
{¶ 60} For the foregoing reasons, we affirm the commission’s order in part,
reverse it in part, and remand this case for clarification.
Order affirmed in part
and reversed in part
and cause remanded.
FISCHER, DONNELLY, STEWART, and KILBANE, JJ., concur.
DEWINE, J., concurs in part and dissents in part, with an opinion joined by
KENNEDY, J.
MARY EILEEN KILBANE, J., of the Eighth District Court of Appeals, sitting
for BRUNNER, J.
_________________
DEWINE, J., concurring in part and dissenting in part.
{¶ 61} The General Assembly set up a fund to subsidize solar power and
tasked the Public Utilities Commission of Ohio (“PUCO”) with establishing the
amounts that ratepayers must pay into the fund. In doing so, the General Assembly
placed caps on the amounts that could be assessed “per customer.” PUCO, though,
decided that when the General Assembly said “per customer,” it didn’t really mean
it. It held that the “per-customer” cap does not actually cap the amount that may
be charged to each customer. Instead, it determined that the “per-customer” cap
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limits the amount that may be billed to an account. So, under its order, a single
customer with multiple accounts may be assessed the “per-customer monthly” cap
amount multiple times.
{¶ 62} PUCO’s interpretation is contrary to the ordinary meaning of the
word “customer.” It is also at odds with the definition of “customer” contained in
the Ohio Administrative Code. The construction of a statutory term is a pure
question of law over which this court has independent power of review. Yet the
majority signs off on the commission’s contra-textual interpretation without any
analysis of the statutory language at all. Thus, I respectfully dissent from that
portion of the majority’s judgment. I concur in the rest of its judgment.
I. The General Assembly Establishes a Per-Customer Cap
{¶ 63} In tasking PUCO with setting the solar fund rider (“Rider SGF”), the
General Assembly placed limits on the amount that a customer could be billed.
R.C. 3706.46(B) provides:
In authorizing the level and structure of any charge to be
billed and collected by each electric distribution utility, the
commission shall ensure that the per-customer monthly charge for
residential customers does not exceed ten cents and that the per-
customer monthly charge for industrial customers eligible to
become self-assessing purchasers * * * does not exceed two hundred
forty-two dollars.
(Emphasis added.)
{¶ 64} The issue here concerns the application of these per-customer caps.
In establishing Rider SGF, PUCO found that the “legislative use of the word
‘customer’ in R.C. 3706.46(B) is clear and unambiguous” and requires that the cap
be applied “in connection with each billing account established in accordance with
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the applicable contract or tariff.” Pub. Util. Comm. No. 21-447-EL-UNC, 2021
WL 3036724, ¶ 16 (July 14, 2021). The Ohio Manufacturers’ Association Energy
Group (“the OMA”) challenges PUCO’s holding that “customer” doesn’t mean
customer but, rather, means account. It complains that because of PUCO’s ruling,
customers who have multiple accounts and meters and customers with multiple
facilities are being forced to pay up to the capped amount for each account.
{¶ 65} In support, the OMA points to the ordinary meaning of the word
“customer.” It contends that the meaning of “customer” is unambiguous, but it
suggests that if the court finds the term to be ambiguous, it should look at legislative
history. In this vein, it points out that earlier versions of the legislation contained
a “per account” cap but the legislature replaced that language with a “per customer”
cap.
II. The Majority’s Flawed Analysis
{¶ 66} The majority never takes on the plain-reading argument. (And who
can blame it—it’s pretty hard to argue that “customer” doesn’t mean customer.)
Instead, it comes up with a convoluted rationale for just ignoring plain meaning.
That rationale goes like this:
1. When a term has a technical meaning, we should apply that meaning rather
than the term’s plain meaning.
2. We presume PUCO orders to be reasonable, and the OMA must overcome
that presumption.
3. PUCO said it relied on the definition of “customer” in Ohio Adm.Code
4901:1-10-01(I) as establishing that the technical meaning of “customer” is
account. The OMA failed to challenge PUCO’s application of the
administrative code’s definition of “customer.” And “[t]his defeats [OMA’s]
argument that the commission violated R.C. 3706.46(B) in applying Rider
SGF on a per-account basis.” Majority opinion, ¶ 29.
What a load of tautological nonsense. Let’s start at the top.
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A. Technical meaning
{¶ 67} It is true that sometimes the context in which words are used can
demonstrate that a technical meaning is intended rather than an ordinary meaning.
See Scalia & Garner, Reading Law: The Interpretation of Legal Texts 73 (2012);
see also R.C. 1.42 (“[w]ords and phrases that have acquired a technical or particular
meaning * * * shall be construed accordingly”). But nothing here demonstrates
that the legislature was using “customer” in any way other than its ordinary
meaning of “one that purchases some commodity or service,” Webster’s Third New
International Dictionary 559 (2002). Moreover, as explained below, the majority
fails to identify any technical meaning of “customer” applicable here that is
different from the word’s ordinary meaning. Instead of simply assuming that a
technical meaning exists for “customer” and that it is controlling, the majority
should have asked (1) is there a technical meaning of “customer” that is different
from the word’s ordinary meaning and, if so, (2) does context demand that the
technical meaning control over the ordinary meaning?
B. Presumption
{¶ 68} Next, the majority repeats the shibboleth that “[w]e presume
commission orders to be reasonable,” majority opinion at ¶ 28. This “presumption”
goes back to E. Ohio Gas Co. v. Pub. Util. Comm., where this court stated that the
presumption existed specifically with respect to whether the commission’s
“findings and orders are just and reasonable,” 137 Ohio St. 225, 249, 28 N.E.2d
599 (1940). But the presumption applies only to factual questions—the types of
questions that require us to look at the record and determine whether the evidence
supports the commission’s decision on a matter. See id. at 248-249; Indus. Energy
Consumers of Ohio Power Co. v. Pub. Util. Comm., 68 Ohio St.3d 559, 563, 629
N.E.2d 423 (1994) (distinguishing between factual questions, to which the
presumption applies, and questions of law).
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{¶ 69} This court has “complete and independent power of review” when it
comes to questions of law in appeals from the commission. Ohio Edison Co. v.
Pub. Util. Comm., 78 Ohio St.3d 466, 469, 678 N.E.2d 922 (1997). The meaning
of the word “customer” in a statute is purely a question of law. And as a simple
question of the legal interpretation of a commonly used term, it is one that we
answer without deference to PUCO. See In re Application of Ohio Edison Co., 157
Ohio St.3d 73, 2019-Ohio-2401, 131 N.E.3d 906, ¶ 62-63 (DeWine, J., concurring
in judgment only); In re Application of Black Fork Wind Energy, L.L.C., 156 Ohio
St.3d 181, 2018-Ohio-5206, 124 N.E.3d 787, ¶ 43 (Kennedy, J., concurring).
Indeed, since the days of Marbury v. Madison, it has been clear that it is for judges,
not bureaucrats, to say what the law is. 5 U.S. 137, 2 L.Ed. 60 (1803).
C. Not Challenged
{¶ 70} The majority saves its best trick for last. It says PUCO relied on the
definition of “customer” in the Ohio Administrative Code as establishing the
technical meaning of “customer” and the OMA never challenged PUCO’s reliance
on that definition until its reply brief, so, voila, PUCO wins. Almost magically,
PUCO carries the day without the court even having to look at whether the
legislature meant to ascribe a technical meaning to “customer” different from the
ordinary meaning or even examining the technical meaning applied by PUCO.
{¶ 71} The problem is that the OMA did challenge PUCO’s understanding
of the word “customer” in its opening brief. It argued that based on the plain
language of R.C. 3706.46(B), as well as the statute’s legislative history, the
ordinary meaning of “customer” applied. As it explained, “The plain language of
R.C. 3706.46(B) (Appx. 66) unequivocally directed the PUCO to implement the
Rider SGF monthly cost caps on a per-customer basis. The PUCO cannot lawfully
construe the meaning of ‘per-customer’ to mean ‘per-billing account.’ ”
{¶ 72} The majority seems to think that the OMA had some obligation in
its initial brief to specifically debunk PUCO’s contention that the administrative-
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January Term, 2022
code provision supported PUCO’s reading of the statute. It didn’t. The OMA’s
argument was much more basic: there was no need to consider the administrative-
code provision because the language of the statute is clear. The majority should
have assessed the OMA’s argument and decided whether to apply the plain
language of the statute or whether context demanded that a different technical
meaning of “customer” be applied. Instead, it threw together an unwarranted
assumption, a legally incorrect presumption, and a mischaracterization of the
OMA’s argument to completely avoid any textual analysis of the statute.
III. The Administrative-Code Provision Doesn’t Support
PUCO’s Reading of the Statute
{¶ 73} So let us do what the majority refuses to do: answer the proposition
of law in front of us and determine whether PUCO properly held that as used in
R.C. 3706.46(B), “customer” really means “account.”
{¶ 74} There is no good-faith argument that the ordinary meaning of
“customer” is anything other than what the OMA says it is—a person or entity who
contracts for utility services. The only question is whether there is a technical
meaning of “customer” different from its ordinary meaning that should be applied
in this context.
{¶ 75} PUCO does not set forth any argument that the legislature meant the
word “customer” in anything but the ordinary sense of the word. It simply points
to the existence of an administrative provision, Ohio Adm.Code 4901:1-10-01(I),
which PUCO itself promulgated, and asks this court to defer to its reading of the
provision.
{¶ 76} But turn to that definition. A “customer” is “any person who has an
agreement, by contract and/or tariff with an electric utility * * * to receive service.”
Id. “Person” means “an individual, corporation, business trust, estate, trust,
partnership, and association.” Ohio Adm.Code 4901:1-10-01(Y); R.C.
4928.01(A)(24); R.C. 1.59(C). Any plain reading of the definition is fatal to
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PUCO’s argument that “customer” means “account.” Under the definition, a
“customer” is simply a person or entity that has an agreement to receive service.
Nothing in the definition suggests that one customer cannot have multiple
agreements or have multiple accounts. So even if we do what PUCO asks and look
to the administrative-code definition, we end up exactly where we started.
“Customer” means customer; it doesn’t mean account.
{¶ 77} Tellingly, despite saying that the administrative-code provision
controls, PUCO does not make any argument about the actual language of the
administrative-code provision. Instead, it points to its own caselaw interpreting
that administrative-code provision. PUCO brief at 8-9, citing In re Establishing the
Nonbypassable Recovery Mechanism for Net Legacy Generation Resource Costs
Pursuant to R.C. 4928.148, Pub. Util. Comm. No. 19-1808-EL-UNC, ¶ 27 (Nov.
21, 2019). In essence, it reasons: the administrative-code provision means what we
say it means because that is what we have said.
{¶ 78} But of course, it’s up to the legislature, not PUCO, to make the law.
And it’s up to this court to say what the law is. The fact that PUCO may have
gotten the law wrong in the past does not grant it license to do so in the future.
{¶ 79} Here, both the plain language of the statute and the plain language
of the administrative-code provision relied upon by PUCO point in the same
direction: “customer” means customer. And because the statute is unambiguous,
there is no need take up the OMA’s legislative-history argument.
IV. Conclusion
{¶ 80} Because neither ordinary meaning nor the administrative code
support the commission’s interpretation of “per-customer” in R.C. 3706.46(B), I
dissent from the majority’s judgment affirming PUCO’s order on proposition of
law No. II. I would remand the case to PUCO to apply the Rider SGF on a per-
customer basis as dictated by the statute. I concur in the remainder of the majority’s
judgment.
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January Term, 2022
KENNEDY, J., concurs in the foregoing opinion.
_________________
Carpenter Lipps & Leland, L.L.P., Kimberly W. Bojko, Jonathan
Wygonski, and Thomas V. Donadio, for appellant.
Dave Yost, Attorney General, and John H. Jones, Jodi J. Bair, and Thomas
M. Shepherd, Assistant Attorneys General, for appellee.
Steven T. Nourse, for intervening appellee.
_________________
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