Court News Ohio
Court News Ohio
Court News Ohio

Tuesday, May 12, 2020

In the matter of the Complaint of Cynthia Wingo v. Nationwide Energy Partners LLC et al., Case No. 2019-0273
Public Utilities Commission of Ohio

Wooster Floral & Gifts LLC v. Green Thumb Floral & Garden Center Inc., Case No. 2019-0322
Ninth District Court of Appeals (Wayne County)

State of Ohio v. Christopher Willingham, Case Nos. 2019-0659 and 2019-0900
Eighth District Court of Appeals (Cuyahoga County)

In the Matter of the Determination of the Existence of Significantly Excessive Earnings for 2017 Under the Electric Security Plans of Ohio Edison Company, Case No. 2019-0961
Public Utilities Commission of Ohio

Is Apartment Complex Submetering Company Acting as Public Utility?

In the matter of the Complaint of Cynthia Wingo v. Nationwide Energy Partners LLC et al., Case No. 2019-0273
Public Utilities Commission of Ohio


  • Can the Public Utilities Commission of Ohio assert it doesn’t have jurisdiction over a submetering company by ruling the business isn’t a public utility?
  • Under R.C. 4905.26, must the commission conduct a hearing on a consumer’s complaint that a submetering company meets the definition of a “public utility”?

A 2015 complaint to the Public Utilities Commission of Ohio (PUCO) alleged that Nationwide Energy Partners LLC (NEP) acts as an illegal public utility by providing submetering services to residential apartment complexes then “resells” electricity, water, and other services to consumers. Instead of addressing the complaint from a consumer, the PUCO instigated an investigation into the issue of submetering companies.

In 2017, as a result of the investigation, the commission indicated that if an entity resells or redistributes public utility services, the commission will apply a modified version of its “Shroyer test” to determine if the entity is operating as a public utility and whether it is doing so unlawfully. The Shroyer test was developed by the PUCO in 1992 when it was asked to determine if a mobile home park was acting as a public utility when it started supplying water and sewer services to its tenants.

Shortly after the results of the investigation were announced, Cynthia Wingo filed a complaint stating that NEP was illegally acting as a “public utility” and an “electric services company” for the apartment complex in Reynoldsburg where she lived. Wingo filed a 123-paragraph complaint about the arrangement the company had with the owners and property managers of her complex, which resulted in higher charges for services.

She explained that since 2000, NEP has provided incentives to multifamily properties to install, operate, and maintain utility meters and infrastructure that allows for the individual billing of tenants for utility services. NEP arranges for utility services by establishing commercial accounts in the name of the residential complex with the local municipal or corporate utility provider in the area. NEP then charges for its services to bill and collect payments from the tenants, which are passed onto the tenants. Wingo alleged that NEP’s involvement could lead to charges in excess of 45% more than what a tenant would pay if allowed to receive service directly from the local utility.

Commission Rejects Complaint
NEP requested that the commission dismiss Wingo’s complaint, arguing that the facts she alleged in her affidavit didn’t meet the commission’s test to be considered a public utility. Because it wasn’t a public utility, the company argued the commission didn’t have subject-matter jurisdiction to proceed with the complaint. The commission agreed, noting that based on the information submitted by the parties, NEP isn’t a public utility and is not subject to the PUCO’s jurisdiction.

Wingo appealed the decision to the Supreme Court, which is required to hear the case. To comply with state directives during the COVID-19 pandemic, the Court will hear Wingo’s case via teleconference.

Commission Decision Premature, Resident Argues
Wingo argues she filed a well-pleaded complaint that deserves a hearing by the PUCO and the commission illegally dismissed her case prematurely. She maintains that while the PUCO determined it didn’t have jurisdiction to consider the case, it actually assumed jurisdiction when it decided to analyze NEP’s arguments and dismiss the case. If the PUCO doesn’t have jurisdiction on the matter, its decision to dismiss the case is void, she maintains.

By not granting her discovery and a hearing, Wingo states that the commission deprived her of a chance to further develop her arguments and demonstrate the NEP’s actions do meet the Shroyer test. She adds she can prove the company isn’t exempt from the modifications the PUCO made to the test that would allow a reseller to act as a public utility without being regulated as one.

Wingo asserts that under R.C. 4905.26, if reasonable grounds for a complaint are stated, the commission shall fix a time for a hearing and notify the parties. She argues her complaint provides reasonable grounds to allege NEP is rendering the services of a public utility or an electric services provider and that she is entitled to a hearing.

Submetering Company Not Public Utility, Commission Maintains
The commission notes that complaints made under R.C. 4905.25 can only be brought against a public utility. Before it considers hearing a complaint, the PUCO has the authority to first determine if the entity is a public utility. Because the commission found NEP wasn’t a public utility, it could conclude that it didn’t have jurisdiction to consider Wingo’s complaint, the commission maintains.

The commission explains that under its Shroyer test, it determines on a case-by-case basis whether a reseller or submetering company is acting as a public utility. Even if the service provider meets the definition of a public utility under the test, the PUCO created two “safe harbors,” which allow continued operations. A reseller isn’t a public utility if the reseller demonstrates it is just passing through the annual costs of providing service charged by the public utility to the submetered residents. Or if the reseller’s annual charge for the services to an individual resident doesn’t exceed what a resident would have paid the local public utility, using the standard rate for services, it is exempt.

The PUCO maintains that the materials Wingo and NEP submitted were sufficient for the commission to determine what each would be arguing if granted a hearing. Because the commission found that NEP could meet the Shroyer test with the exceptions it created, the PUCO concluded the company wasn’t a public utility. Wingo failed to show she suffered any harm because her information indicated that she paid less to NEP than what she would have paid had she been billed for utility services at the standard rate by her local utilities, the commission asserts.

Because her general allegations couldn’t demonstrate that NEP was acting illegally, the commission had a right to dismiss her case without a hearing, the PUCO concludes.

Company Says It Provides Management Services, Not Utilities
The Supreme Court permitted NEP to intervene in the case to argue on its own behalf. The company disputes Wingo’s contention that the commission must conduct a hearing before deciding it doesn’t have jurisdiction to consider a matter. NEP argues the commission had ample evidence at the time the dismissal request was submitted to determine if the company met the definition of a public utility.

NEP asserts it provides energy management services to owners of multifamily residences and that the owner of Wingo’s complex provides utility services to the residents. NEP states its role is to assist landowners in collecting utility bills from the residents and paying the public utilities for the services on the landowner’s behalf. NEP has no special right to provide utility services to the public, it adds, which is further proof under the Shroyer test that it isn’t a public utility.

Wingo’s allegation that NEP is illegally providing service was supported only by her providing the PUCO a copy of a single monthly electricity bill. She argued that had she paid AEP Ohio for electric service directly, she would have paid less. NEP compared her bill to AEP charges, and concluded she actually paid $8.07 less to NEP than she would have paid under the standard AEP rate. Because she paid less, NEP maintains it fell under the safe harbor the PUCO established and is entitled to provide the service.

Friend-of-the-Court Brief Submitted
An amicus curiae brief supporting Wingo’s position has been submitted by Industrial Energy Users-Ohio.

Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing Cynthia Wingo: Mark Whitt, 614.224.3911

Representing the Public Utilities Commission of Ohio from the Ohio Attorney General’s Office: Robert Eubanks, 614.644.8669

Representing National Energy Partners LLC: Michael Settineri, 614.464.5462

Return to top

Did Competing Floral Shop Engage in Deceptive Trade Practice by Redirecting Consumers to Its Website?

Wooster Floral & Gifts LLC v. Green Thumb Floral & Garden Center Inc., Case No. 2019-0322
Ninth District Court of Appeals (Wayne County)

ISSUE: Is a competitor’s use of a business’ legally valid trade name within a website domain name a deceptive trade practice that is analyzed for the likelihood of confusion at the time the trade name is used in the domain name?

Owner and operator Kimberly Gantz formed Wooster Floral as a limited liability company in 2000. Wooster Floral registered the domain names and, and customers could place orders on the sites. Gantz used in advertisements for the shop.

In late 2014, Gantz planned to close the business, and she didn’t renew the domain name when it came up for renewal. The store’s manager, Katrina Heimberger, expressed interest in taking over the business. Gantz sold the assets of the business, including the use of the name “Wooster Floral,” to Heimberger. The new owner formed a company called “Wooster Floral and Gifts” in early February 2015 and also filed with the state an assignment of the name “Wooster Floral LLC” to herself. Ownership was transferred officially to Heimberger on Feb. 1, 2015. The shop never ceased operations during the transition.

Competitor Purchases Domain Name, Redirects People to Its Website
Heimberger found that was redirecting consumers to the website for Green Thumb Floral and Garden Center, a local competitor. Green Thumb’s owner, Claudia Grimes, stated that she purchased the domain name on Jan. 8, 2015, when she learned it was available. Grimes redirected traffic from that domain name to Green Thumb’s website,

Grimes stated that she owns several domain names, such as,, and, and buys others that she finds useful. They all point to the main Green Thumb website. When contacted by Wooster Floral, Grimes declined to release the domain name without a significant payment.

Florist Alleges Deceptive Trade Practices
Wooster Floral sued Green Thumb in June 2016, alleging unauthorized use of a trademark and deceptive trade practices. Wooster Floral claimed in part that Green Thumb’s use of the Wooster Floral name in, now owned by Green Thumb, was a deceptive trade practice. Wooster Floral asked the court to stop Green Thumb from using the domain name.

A Wayne County Common Pleas Court magistrate rejected Green Thumb’s request for summary judgment in its favor. However, after a trial before a judge, the court ruled for Green Thumb.

Wooster Floral appealed to the Ninth District Court of Appeals, which in January 2019 upheld the trial court’s decision. The appeals court found that Wooster Floral had rights to the trade name “Wooster Floral” and could file suit to legally stop others from using the name. The appeals court stated, however, that when a customer types “,” the customer lands on Green Thumb’s website, which clearly shows Green Thumb’s name and address. Green Thumb’s use of caused no likelihood of confusion for consumers as to the source of the goods or services, the court concluded.

Wooster Floral appealed to the Ohio Supreme Court, which agreed to review the issue. To comply with state directives during the COVID-19 pandemic, the Court will hear this case via teleconference.

Use of Trade Name to Divert Traffic Causes Consumer Confusion, Florist Contends
Under R.C. 4165.02(A)(2), which is part of the Ohio Deceptive Trade Practices Act, a deceptive trade practice occurs when a party “causes likelihood of confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services.”

Wooster Floral states that the determination turns on whether a defendant’s use of the trade name is likely to cause confusion to the public about the origin of the goods offered by a company. The likelihood of confusion is analyzed at the time of use, Wooster Floral maintains. The florist points to various cases from state appellate courts and federal courts that found violations of trademarks or trademark domain names – the use of the Maker’s Mark trademarked red dripping wax seal, the use of by an Audi competitor, and the use of and by entities other than Peterbilt and Kenworth.

The Ninth District made its decision based on the content that appears on the Green Thumb website, but Wooster Floral argues the cases in other courts show the deceptive act is the use of the Wooster Floral trade name in the website name to divert Wooster Floral customers to Green Thumb, a direct competitor. That creates confusion about the source of the goods and services, Wooster Floral maintains.

“By the time a consumer arrives at Green Thumb’s webpage, the deceptive act is already complete and has already accomplished Green Thumb’s goal: diverting a consumer who had sought to connect with a specific business — Wooster Floral — to the webpage for a direct competitor’s business,” Wooster Floral’s brief argues. “The focus should be on what the consumer was looking for by typing in a specific domain name and where that domain name led that creates the likelihood for confusion.”

Wooster Floral contends that Green Thumb conflates search terms entered into search engines with domain names, such as In addition, Wooster Floral maintains, neither the Ohio Deceptive Trade Practices Act nor the Court have set a standard for evidence of deceptive trade practices, but proof of monetary damages or actual confusion aren’t required by the statutes.

‘Wooster’ Plus ‘Floral’ Refers to Multiple Businesses, Competitor Argues
Green Thumb, which has been in business since 1962, responds that people looking for florists in Wooster are likely to type “Wooster” and “floral” into a search engine on the internet. That search generates pages of results, including 17 sites on the first page that offer to sell flowers in Wooster, Green Thumb notes. The company states that the phrase “Wooster floral” isn’t associated solely with Wooster Floral’s business. That distinction makes Wooster Floral’s claim different than the cases cited about trademarks, such as Peterbilt’s and Kenworth’s, Green Thumb maintains.

Because consumers who type “” land on a site that is clearly marked as Green Thumb Floral and includes Green Thumb’s address, there is no confusion about the source of the goods being sold on the site or the location of the business, Green Thumb argues.

“We cannot guess as to what consumers are looking for when they enter certain phrases into a search bar. Nor can we guess as to a consumer's likelihood of confusion or misunderstanding. [Wooster Floral] had the burden to demonstrate by clear and convincing evidence a likelihood of confusion. They failed to do so,” Green Thumb’s brief concludes.

Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing Wooster Floral & Gifts LLC: Susan Audey, 216.696.3715

Representing Green Thumb Floral & Garden Center Inc.: Craig Reynolds, 330.264.1150

Return to top

Must Accused Prove Missing Evidence Will Certainly Lead to Unfair Criminal Trial?

State of Ohio v. Christopher Willingham, Case Nos. 2019-0659 and 2019-0900
Eighth District Court of Appeals (Cuyahoga County)


  • In a sexual assault case where the defendant has alleged prejudice by pre-indictment delay, must the defendant prove that any lost evidence related to the issue of consent be substantial and not speculative?
  • Does an appeals court lose jurisdiction of a case if it votes to reconsider its opinion after a party appealed the initial opinion to the Ohio Supreme Court?

A Cuyahoga County initiative to test rape kits that had gone untested for years resulted in an eight-count indictment of Christopher Willingham in 2017. Willingham was charged with three counts of rape and kidnapping for a November 2000 incident involving a woman identified in court records as D.R. In D.R.’s case, she didn’t know her attacker. Willingham faced five counts of rape and kidnapping for an August 2008 encounter with a woman identified as S.B. She and Willingham went on a date, S.B. told police, and it led to him raping her.

Willingham asked the Cuyahoga County Common Pleas Court to dismiss the charges based on pre-indictment delay. While D.R. alleged Willingham raped her just outside the parking lot of the Gentle Persuasion nightclub, Willingham maintained the two had consensual sex at a nearby hotel after he paid D.R. to have sex. He maintained his sexual activity with S.B. was consensual and that the two had a misunderstanding for which he apologized to her on the phone and through voicemail.

Willingham maintained the long delay between the encounters and the indictment led to the loss of evidence, unavailability of business records, and faded memories that prevented him from receiving a fair trial. The trial court agreed and dismissed the cases.

The Cuyahoga County Prosecutor’s Office appealed the decisions to the Eighth District Court of Appeals. The Eighth District consolidated the appeals and affirmed the trial court’s decisions. The prosecutor then appealed to the Ohio Supreme Court.

Before the Supreme Court decided whether to hear the case, the Eighth District, sua sponte , voted to reconsider the original opinion. It then issued a new opinion, which changed half of one sentence from the original opinion, and again affirmed the trial court’s decision.

The prosecutor appealed to the Supreme Court again. The prosecutor appealed the Supreme Court again. The Supreme Court agreed to hear both  appeals — the claim that Willingham failed to prove he was actually prejudiced by the delay, and the case addressing the procedural question of whether an appeals court, on its own, can reconsider its decision once a party has appealed the decision to the Supreme Court.

To comply with state directives during the COVID-19 pandemic, the Court will hear oral arguments on the cases via teleconference.

No Proof Records Existed or Would Be Helpful, Prosecutor Submits
Prosecutors note that D.R. reported she left Gentle Persuasion at about 3 a.m. According to varying accounts, she was either a patron or a dancer at the club, and had been there with her best friend, identified as K.M., for several hours. K.M. left shortly before D.R. D.R. said a man near the parking lot grabbed her, forced her into nearby bushes, raped her, and ran away. The incident lasted about five minutes. She then told her boyfriend about the incident and was taken to a local hospital where a rape kit was administered.

Willingham was convicted of an unrelated felony in 2004, and a DNA sample was taken from him and entered into a law enforcement database. Willingham was identified through DNA as the man who had sex with D.R. on the night of the incident. Willingham told police that D.R. agreed to go to the Red Carpet Inn with him and that he paid her to have sex. He said he paid cash for the room, provided identification, which the hotel copied, and received a receipt. He said the two went their separate ways afterward.

A private investigator hired by Willingham testified that Gentle Persuasion was sold in the 2000s and subsequently burned down. The investigator was unable to contact the former owner. The investigator reached K.M., who said she had no recollection of the night, and stated she would remember if D.R. had told her she had been raped. He also noted the Red Carpet was sold to another hotel chain in 2001, and that no one at the hotel has records from 17 years earlier.

The prosecutor argues that the lower courts allowed Willingham to claim prejudice on the mere speculation that records from the hotel and nightclub would provide him a defense. The prosecutor maintains that regardless of whether Willingham checked into the hotel, it doesn’t prove that he didn’t rape D.R. outside the club.

In regard to S.B., the investigator determined the police recorded the voicemail message left by Willingham on S.B.’s phone. The message can no longer be located. Willingham has maintained the message and the record of the call that S.B. took from him the morning after the sexual encounter demonstrate that their activity was consensual. Willingham also met with police after the complaint and took a polygraph test. The prosecutor maintains that even if the voicemail were retrieved, Willingham’s apologetic tone of his message isn’t evidence that he didn’t rape S.B.

Court Precedent Misinterpreted, Prosecutor Asserts
The prosecutor asserts the lower courts in Willingham’s cases and other cases are misinterpreting the Ohio Supreme Court’s last major decision on pre-indictment delay – State v. Jones (2016). In Jones, the Court ruled that “[a]ctual prejudice exists when missing evidence or unavailable testimony, identified by the defendant and relevant to the defense, would minimize or eliminate the impact of the state’s evidence and bolster the defense.”

The prosecutor maintains that the ruling indicates actual prejudice exists if the information “would minimize or eliminate the impact” of the state’s case, not that it “might” impact the case. The prosecutor argues the trial court allowed Willingham to speculate about how the evidence would have helped him, and that isn’t a sufficient reason to prevent the case from going to trial.

The prosecutor asks the Court to clarify Jones by indicating a defendant needs to demonstrate the missing evidence had substantial value and have concrete proof that witnesses are unavailable. The office maintains that minimal efforts by Willingham’s investigator to contact witnesses doesn’t mean the former owners of the club, club employees, or hotel employees couldn’t be located if his case went to trial. Those witnesses could discuss the information Willingham claims is relevant, the office concludes.

State Seeks Harsh Limits, Accused Argues
Willingham argues the prosecutor seeks a new, strict standard on what a defendant must do to demonstrate actual prejudice. He maintains the hotel records weren’t sought to address the question of whether he and D.R. had consensual sex, but rather to question the credibility of her version of the events. Willingham notes that while the alleged rape of D.R. took place at 3 a.m., she didn’t arrive home until 5:30 a.m. and then told her boyfriend she had been raped. The two went to the hospital, D.R. refused to speak with a rape counselor, and she had one conversation with the investigating officer. That officer died in 2007. The investigatory file notes only that D.R. agreed to come to the station to look at photos of suspects, but there is no record of whether she actually did, Willingham notes.

Willingham claims his version of the events, that the two went to the hotel together, is more credible and that D.R. never accounted for the time gap between the alleged rape and her return home. Willingham maintains the 17-year delay has unfairly prevented him from bolstering his alibi claim with records from the hotel or from the nightclub.

Willingham points to the Eighth District’s decision that found the prosecution has no more evidence about Willingham and S.B. than they had in 2008. If there was no reason to charge him then, the DNA from the rape kit doesn’t gives them any more information to base a charge, the appeals court ruled. Willingham maintains that S.B. has told investigators six times since 2008 that she couldn’t recall significant details from the night in question.

Willingham argues the lower courts aren’t confused about Jones, and have applied the Court’s directive properly in several cases, some of which have found actual prejudice, and others that haven’t. In his cases, the trial court correctly found the missing evidence would minimize the effect of the state’s case and that he wouldn’t be able to receive a fair trial because of the delay, Willingham concludes.

Reconsideration of Appeals Ruling Incorrect, Parties State
Willingham notes in the second case he agrees with the prosecutor’s argument on the procedural issues the office raised regarding the right of the Eighth District to reconsider its ruling after the prosecutor filed the appeals. The parties maintain that an appeals court loses jurisdiction of a case once it has ruled and its  decision has been appealed.

Friend-of-the-Court Brief Submitted
An amicus curiae brief supporting the county prosecutor’s position has been submitted by the Ohio Prosecuting Attorneys Association.

Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket (2019-0659 and 2019-0900).

Representing the State of Ohio from the Cuyahoga County Prosecutor’s Office: Daniel Van, 216.443.7800

Representing Christopher Willingham from the Cuyahoga County Public Defender’s Office: Paul Kuzmins, 216.443.7583

Return to top

Did Funds from Unlawful Electricity Charge Lead to Excessive Earnings?

In the Matter of the Determination of the Existence of Significantly Excessive Earnings for 2017 Under the Electric Security Plans of Ohio Edison Company, Case No. 2019-0961
Public Utilities Commission of Ohio

ISSUE: Should earnings by a public utility from a rider, which has been ruled unlawful by the Ohio Supreme Court, be included in a mandatory review of significantly excessive earnings by the Public Utilities Commission of Ohio?

Ohio permits electric utility distribution companies to propose rate plans called “electric security plans” (ESPs) to the Public Utilities Commission of Ohio (PUCO). In 2016, the FirstEnergy companies — Ohio Edison, Cleveland Electric Illuminating, and Toledo Edison — won PUCO approval of an ESP that has since been extended, and now continues through May 2024. As part of the ESP process, state law requires an annual review of earnings, and requires the PUCO to order a company to return any “significantly excessive” earnings to customers through the reduction of future electricity charges.

Part of FirstEnergy’s ESP included a “distribution modernization rider,” which was an extra charge customers paid to help improve the credit rating of the FirstEnergy companies so that they could borrow money at a lower interest rate and use the money to modernize the electric distribution grid of the northern Ohio areas they serve. The Ohio Consumers’ Counsel (OCC) and others challenged the rider, which began in 2017. 

In 2019, the Supreme Court struck down the charge. (See First Energy Electric Grid Modernization Charge Improperly Imposed.) While the Court directed the PUCO to terminate the charge, which it did, the decision didn’t include a directive to refund any money to customers. The Court ruled that any claims of unlawful amounts collected by FirstEnergy companies could be assessed when the PUCO conducts its annual profit reviews of the companies.

As part of the FirstEnergy review for 2017, the PUCO didn’t include in the earnings the payments  from the modernization rider to determine the companies’ overall net earnings. The OCC argued for including the rider payments. The consumer advocate maintained that if the revenue from the rider was included as part of the profit review, one of the three companies, Ohio Edison, would have significantly excessive earnings. The OCC maintains that Ohio Edison customers are owed $58.5 million from the company if the PUCO includes the rider in the company’s earnings review. Even with the rider charges added, Cleveland Electric Illuminating and Toledo Edison wouldn’t have had excessive earnings in 2017, the OCC notes.

The PUCO rejected the consumers’ counsel argument and excluded the rider earnings from the calculation. The OCC appealed to the Supreme Court, which is required to consider the case. To comply with state directives during the COVID-19 pandemic, the Court will hear oral argument
on the matter via teleconference.

Rider Is Part of Earnings, Advocate Argues
The parties differ in their interpretations of R.C. 4928.143, which directs the PUCO to develop a test of significantly excessive earnings and review the earnings of power companies operating under ESPs. The consumers’ counsel points to the provision in R.C. 4928.143(F) that the test is to include rates and adjustments and determine “if any such adjustments result in excessive earnings.” The modernization rider is an “adjustment,” the OCC argues, and resulted in excessive earnings, which must be returned to the customers.

The consumers’ counsel explains the earnings test requires the PUCO to assess an average profits figure by companies similar to those of Ohio electric utilities and measure profits by “return on equity” (ROE). The PUCO calculated Ohio Edison’s earnings at $126 million, giving it a 11.8% ROE, which was close to the industry average. The PUCO established that anything more than 14.3% would be excessive.

The consumers’ counsel argues that if the rider is added, Ohio Edison’s calculated earnings for 2017 increase to $185 million, which is a 17.38 percentROE. By excluding a 33% increase in earnings, the PUCO has unlawfully and unfairly allowed Ohio Edison to pass the earnings test and keep money that should be returned to consumers, the advocate maintains.

The consumers’ counsel also asserts the PUCO can’t allow Ohio Edison to retain the $58.5 million because the Court struck down the rider as not being an incentive linked to the actual costs of grid modernization. The law doesn’t allow the commission to exclude the rider, and allowing the company to benefit from a rider the Court ruled unlawful would be unfair to consumers, the OCC concludes.

Exclusion of Rider Permitted, Commission Maintains
The commission points to another provision in R.C. 4928.143(F) requiring it to consider the earnings with “such adjustment for capital structure as may be appropriate,” and to consider future capital requirements. The PUCO argues the sole point of the modernization rider was to finance future capital expenditures by the FirstEnergy companies to modernize the power grid in northern Ohio. Because that was the objective of the funds, they aren’t considered earnings in the annual test, the commission asserts. The commission maintains that the FirstEnergy companies have committed to spending $516 million in grid modernization through a plan the PUCO approved in 2019, and weakening Ohio Edison’s financial strength by refunding the rider funds wouldn’t help advance the goal to update the grid.

Even though the Court found the rider was the wrong method to raise funds for service upgrades, the commission maintains the goal of modernization is being achieved with the funds, and those goals are consistent with the regulation of power companies under R.C. Chapter 4928. The commission argues the law requires it to support grid modernization to enable a market for competitive suppliers of electricity. The commission concludes that under the significantly excessive earnings test, Ohio Edison has earned “just enough money to advance the grid modernizations initiatives.”

Company Agrees with Commission Assessment
The Court permitted Ohio Edison to intervene in the case and argue on its own behalf. The company supports the PUCO’s assessment and notes that during the 2017 earnings reviews experts representing the commission, the OCC, Ohio Edison, and others were allowed to submit their own calculations of what were considered excessive earnings. The company notes that the PUCO determined that Ohio Edison’s method, which found that anything below a 19.2% ROE wouldn’t be significantly excessive, was appropriate.

The consumers’ counsel calculated that Ohio Edison’s ROE with the rider would be 17.38 percent. Because that number is below 19.2%, the earnings with the rider aren’t significantly excessive, and the PUCO would still be authorized to approve the company’s retention of the funds, Ohio Edison maintains. Because the earnings are within the approved range, consumers weren’t harmed by the PUCO’s decision, the company asserts, and the decision should stand.

Ohio Edison also notes that when the PUCO set up the excessive earnings test, it defined “earned return” as profits after the deduction of expenses and other charges. One of the items excluded from earned return was “non-recurring, special, and extraordinary items.” The company argues the rider falls into this category of excluded items, and the commission was correct not to consider the rider as part of its 2017 earnings.

Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing Office of the Ohio Consumers” Counsel: William Michael, 614.466.1291

Representing the Public Utilities Commission of Ohio from the Ohio Attorney General’s Office: Thomas McNamee, 614.466.4397

Representing Ohio Edison Company: James Lang, 216.622.8200

Return to top