Summary
In Globe Metallurgical v. Pub. Util. Comm., 40 Ohio St.2d 40, 319 N.E.2d 360 (1974), interruptible customers challenged an increase in their rates as part of a general rate increase because there had been no cost study justifying their share of the increase.
Summary of this case from Midwest Gas Users Ass'n v. Kansas Corp. CommOpinion
No. 74-30
Decided November 20, 1974.
Public Utilities Commission — Electric rate increase — Order not unreasonable or unlawful, when — Rate classification.
APPEAL from the Public Utilities Commission.
The Ohio Power Company sought approval from the Public Utilities Commission of rate increases covering a substantial majority of its customers in a number of rate classifications. Globe Metallurgical Division of Interlake, Inc., and Ohio Ferro Alloys Corporation, appellants herein, protested the increases relative to their rate classification, which is a rate for interruptible power, commonly designated as I.R.P. tariff.
Those who purchase interruptible power from Ohio Power do so subject to having such power interrupted when it is needed for service to other customers. The interruptible power is actually a "spinning reserve," maintained to respond to increases in general customer demand and is made available to interruptible customers until needed for other customer load increases. The interruption continues until the spinning reserve is restored, at which time such reserve power is again available to interruptible power customers.
After public hearings before a commission examiner, the commission issued its opinion and order allowing increases in company-wide rates, which included increased rates for interruptible power, in order to provide a rate of return of 6.47 percent on its company-wide rate base. In making its determination, there was no separate cost study required by the commission specifically related to the interruptible power classification.
The cause is now before this court upon an appeal as of right.
Mr. Langdon D. Bell, for appellants.
Messrs. Squire, Sanders Dempsey, Mr. Alan P. Buchmann, Mr. John Lansdale and Mr. James H. Woodring, for intervening appellee Ohio Power Company.
Mr. William J. Brown, attorney general, and Mr. Keith F. Henley, for appellee Public Utilities Commission.
The question is whether the commission's company-wide rate increase allowance for Ohio Power is unreasonable or unlawful as applied to the class of interruptible power customers.
Appellants, as users of interruptible power, do not attack the propriety of the overall rate increase. They contend, however, that the increase, as applied to their classification, is improper without evidence relative to the cost to Ohio Power of furnishing such service. Although appellants imply that such cost is minimal, inasmuch as Ohio Power must maintain a power reserve in order to meet the fluctuating demand of its primary users regardless of whether it has interruptible power customers, they presented no cost study data respecting the interruptible power classification.
It should be noted that the increased rate approved for interruptible power service remains considerably lower than the rates for other customers and that the percentage of rate increase, as applied to interruptible power customers, is less than the percentage of rate increase approved for substantially all other classifications.
We find no statutory requirement in R.C. Chapters 4905 or 4909 as to the necessity of the commission making cost of service determinations relative to specific rate classifications. Nor do we find that the failure to make such specific determinations was unreasonable where the service afforded is from an overall reserve resulting from system-wide operation of Ohio Power.
We hold that the order of the commission is neither unreasonable nor unlawful, and it is, hereby, affirmed.
Order affirmed.
O'NEILL, C.J., HERBERT, CORRIGAN, STERN, CELEBREZZE, W. BROWN and P. BROWN, JJ., concur.