Opinion
No. 80-503
Decided December 23, 1980.
Public Utilities Commission — Electric companies — Request for recovery of non-fuel costs associated with emergency period — Properly denied, when.
APPEAL from the Public Utilities Commission.
Columbus Southern Ohio Electric Company (appellant herein) is appealing from the Public Utilities Commission's (appellee herein) denial of appellant's request for a temporary surcharge of over $6,000,000 as a means of recovering non-fuel costs of power purchased during the emergency period in the first quarter of 1978 resulting from the United Mine Workers' strike.
In its application of May 2, 1978, for a temporary emergency purchased power cost surcharge (case No. 78-848-EL-UNC), appellant originally sought to recover $3,164,128.29. Subsequently, in a memorandum filed with the court in conjunction with its appeal from the commission's dismissal of the application on June 29, 1978 (case No. 78-1354), appellant indicated that the amount to be recovered was "estimated at $6.0 million." The level of the recovery presently being sought by appellant, $6,056,524, is not at issue in the proceeding.
During that emergency period, appellee ordered Ohio electric utilities to buy electric power through the inter-connected transmission system to arrest the decline of coal supplies and thereby preserve service to customers without the need for mandatory curtailments. The purpose of the order to purchase all available power through the interconnected system was to preserve the integrity of the system in that the failure of one utility company to maintain adequate levels of power could culminate in a regional blackout adversely affecting all utility companies.
Appellant purchased the emergency energy at a cost of approximately $19,000,000, consisting of $13,000,000 in fuel expenses and the disputed $6,000,000 in non-fuel expenses. In 1978, appellant recovered the $13,000,000 fuel expenses through its fuel adjustment clause.
In its March 1, 1979, request for permanent rate relief (case No. 78-1438-EL-AIR), appellant also sought permission to recover the $6,000,000 non-fuel expenses through a temporary tariff. It sought authority to pass on such non-fuel expenses to its customers over a four-month period, based on the customer's kilowatt hour usage as shown on its January, February and March, 1978, bills.
Appellee refused to authorize compensation to appellant, stating in its opinion and order of December 12, 1979, as follows:
"To put it simply, we do not believe that we must reimburse utility companies for past losses or provide a 100 percent recovery of past expenses even if they were incurred at the direction of the Commission."
Thereafter, appellant filed an application for rehearing which was denied.
The cause is now before this court on an appeal as a matter of right.
Messrs. Porter, Wright, Morris Arthur, Mr. Samuel H. Porter, Mr. Curtis A. Loveland and Mr. William J. Kelly, Jr., for appellant.
Mr. William J. Brown, attorney general, Mr. Marvin I. Resnik and Mr. Harris S. Leven, for appellee.
Appellant asserts that appellee's refusal to authorize its recovery of the full cost of the emergency energy period violates due process by the taking of private property without just compensation.
We find no merit in appellant's contention.
Appellant asserts that the Fifth and Fourteenth Amendments to the United States Constitution and Sections 1, 16 and 19 of Article I of the Ohio Constitution have been violated by the refusal to allow recovery of the non-fuel costs.
Initially, it is noted that the appellee, by and through its statutory powers, has consistently disallowed utility companies, including appellant, from recovering the non-fuel costs associated with the emergency period in the instant cause. (See Re Ohio Edison Company, case No. 77-1249-EL-AIR et al. [November 17, 1978], opinion and order at pages 21-22; Re Monongahela Power Company, case No. 78-625-EL-FAC [November 22, 1978], opinion and order at pages 16-17, and cases cited therein.)
It is undisputed that appellee did order appellant, as well as other utility companies, to purchase energy power in order to prevent curtailment or interruption of service during the emergency period.
Dispositive of appellant's claim of an unjust taking of private property is the fact that appellee simply ordered appellant to do only that which appellant had a statutory obligation to provide for the public.
R.C. 4905.22, which reads in the imperative, states that appellant must furnish adequate service to its customers, and provides as follows:
"Every public utility shall furnish necessary and adequate service and facilities, and every public utility shall furnish and provide with respect to its business such instrumentalities and facilities, as are adequate and in all respects just and reasonable. All charges made or demanded for any service rendered, or to be rendered, shall be just, reasonable, and not more than the charges allowed by law or by order of the public utilities commission, and no unjust or unreasonable charge shall be made or demanded for, or in connection with, any service, or in excess of that allowed by law or by order of the commission."
Therefore, appellee imposed no new or additional obligations upon appellant but rather reaffirmed existing statutory obligations. Therefore, there was no taking of private property and, thus, no due process violations.
Furthermore, it is noted that the purpose of appellee's order directing the "purchase [of] all available power" was simply to preserve the integrity of the interconnected network of facilities among electric utility companies. The failure of one utility to maintain an adequate level of reserve power could initiate a regional blackout, which would adversely affect even those utilities with sufficient coal supplies. Therefore, appellee's order, in effect, gave appellant an unquantified benefit by assuring that no other utility's failure to provide energy would adversely reflect upon the appellant's ability to provide future services.
Finally, it is noted that a public utility has no constitutional right to recover past and unrecovered costs through present and future rates. Bluefield W.W. Improvement Co. v. Public Service Comm. (1923), 262 U.S. 679.
For the foregoing reasons, the order of the Public Utilities Commission is affirmed.
Order affirmed.
CELEBREZZE, C.J., W. BROWN, P. BROWN, SWEENEY, LOCHER and DOWD, JJ., concur.
I must dissent in that I feel that not to reimburse, or at least make certain allowances to this utility company, for all the commission mandated costs associated with the provision of electrical services during the coal strike emergency is not only inequitable, but borders upon being an unconstitutional taking of property and a violation of due process of law.
It is true that R.C. 4905.22 mandates that public utilities furnish necessary and adequate service and facilities, but the utility should in return be compensated in a just and reasonable manner. Here, in my view, the service which the commission ordered was beyond that which would have normally satisfied the utility's duty under the law. It should be reasonably compensated for such service.