In re Application of Columbus S. Power Co. ( 2011 )

[Cite as In re Application of Columbus S. Power Co., 129 Ohio St. 3d 271, 2011-Ohio-2638.]
IN RE APPLICATION OF COLUMBUS SOUTHERN POWER COMPANY ET AL. TO
MODIFY STANDARD SERVICE OFFER RATES; INDUSTRIAL ENERGY USERS-
OHIO, APPELLANT; PUBLIC UTILITIES COMMISSION ET AL., APPELLEES.
IN RE FUEL ADJUSTMENT CLAUSES FOR COLUMBUS SOUTHERN POWER
COMPANY ET AL.; INDUSTRIAL ENERGY USERS-OHIO, APPELLANT; PUBLIC
UTILITIES COMMISSION ET AL., APPELLEES.
[Cite as In re Application of Columbus S. Power Co., 129 Ohio St. 3d 271,
2011-Ohio-2638.]
Public Utilities Commission — “Reasonable arrangements” — Appellant has
shown prejudice but not legal error — Order affirmed.
(Nos. 2010-0729 and 2010-0730 — Submitted April 19, 2011 — Decided
June 7, 2011.)
APPEAL from the Public Utilities Commission, Nos. 09-1906-EL-ATA,
09-872-EL-FAC, and 09-873-EL-FAC.
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O’CONNOR, C.J.
{¶ 1} In the proceedings below, the Public Utilities Commission
(“PUCO” or “commission”) allowed the American Electric Power operating
companies Columbus Southern Power Company and the Ohio Power Company
(collectively, “AEP”) to adjust their economic-development cost-recovery riders.
Industrial Energy Users-Ohio (“IEU”) appeals the decision. Finding none of
IEU’s arguments to have merit, we affirm.
I. Background
{¶ 2} In recent years, the commission has approved several “reasonable
arrangements” between AEP and a southeastern Ohio manufacturing company,
Ormet Primary Aluminum Corporation. “[R]easonable arrangements” are
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permitted under R.C. 4905.31 if filed with and approved by the commission. R.C.
4905.31(E). In this case, the term refers to individually tailored, discounted rate
schedules. An earlier arrangement involving AEP and Ormet ended on December
31, 2008. A later arrangement began in 2009.1 Filling the gap between these two
is the arrangement at issue in this case—we will call it the “interim arrangement.”
{¶ 3} Under all three arrangements, Ormet received discounted rates.
Discounted rates lead to what is known as “delta revenue”—the difference
between what AEP would have collected from Ormet under its tariffs and what it
actually collected, given the discount. Ohio Adm.Code 4901:1-38-01(C). When
the commission approved the interim arrangement, it noted that AEP would keep
track of its delta revenues, but the commission did not approve their recovery.
{¶ 4} AEP sought recovery of the interim delta revenues in the
proceedings below. IEU intervened and opposed AEP’s request, but the
commission approved it on January 7, 2010. IEU sought rehearing, which the
commission denied.
{¶ 5} IEU appealed the order under two case numbers and filed a motion
to consolidate the two appeals, which we granted. AEP intervened in both cases
on the side of the commission.
II. Discussion
{¶ 6} IEU raises three propositions of law. None have merit.
A. IEU’s First Two Propositions of Law Have Been
Resolved by a Prior Decision
{¶ 7} IEU’s first two propositions of law are identical to those that IEU
raised in case No. 2009-2022, In re Application of Columbus S. Power Co., 128
Ohio St. 3d 512, 2011-Ohio-1788, 947 N.E.2d 655. After submitting this case on
the briefs, IEU filed a motion to dismiss its first two propositions of law because
1. This arrangement is addressed in In re Application of Ormet Primary Aluminum Corp., 129
Ohio St. 3d 9, 2011-Ohio-2377, 949 N.E.2d 991.
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we rejected those propositions in the earlier case. See id. at ¶ 36–49. We grant
IEU’s motion and dismiss the first two propositions of law.
B. Although IEU Has Been Prejudiced by the Order,
It Has Not Demonstrated Reversible Error
{¶ 8} In its third proposition of law, IEU argues that the commission
erred by allowing AEP to collect delta revenues arising from an interim
arrangement with Ormet. IEU asserts that the commission approved the rate
increase “without any process or review of the lawfulness or reasonableness of the
interim Ormet reasonable arrangement deferrals.” Neither the commission nor
AEP disputes IEU’s assertion that the commission has not reviewed the
reasonableness of the challenged rate increase. Indeed, they make no argument
on the merits, instead arguing solely that IEU has not been prejudiced.
{¶ 9} Before reviewing the merits of IEU’s claim, we consider whether
IEU has been prejudiced.
1. The Order Prejudiced IEU
{¶ 10} According to the appellees, even if the commission had approved
unreasonable rates, “future rates will be adjusted to make [the affected] customers
whole.” IEU responds that the appellees “ignore the immediate harm and
prejudice experienced by [certain] customers by paying these higher rates,” as
well as the fact that there would be a delay in review, “possibly for years after the
rates were paid.”
{¶ 11} IEU has the better end of the prejudice dispute. The commission
acknowledges that because of the order, some “customers do pay slightly more
today than they would have.” Thus, it is uncontested that some of IEU’s members
are presently paying higher rates as a result of the order. That harm is immediate
and concrete, and the direct, financial injury could well cause further
consequential harm. For example, less money now means lost opportunities to
use that money later, and these lost investment opportunities could result in
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further financial loss. Reduced cash flows could also have indirect business
consequences—such as requiring additional borrowing, payroll reductions, or
other unwanted actions. Thus, to cure all prejudice if present rates are eventually
judged too high, the commission must not only restore lost dollars to customers,
but also provide appropriate compensation for any consequential harms. All this
assumes that the customers, who have already paid the increased rate, remain on
the system to enjoy any curative credits.
{¶ 12} IEU has demonstrated prejudice, as it must, Indus. Energy
Consumers v. Pub. Util. Comm. (1992), 63 Ohio St. 3d 551, 553, 589 N.E.2d
1289, while the claims of no prejudice depend on numerous contingencies.
Though it is possible that all present harms will eventually be cured, the harm is
present and concrete, and the alleged cure is speculative. Therefore, we will not
dispose of this case for lack of prejudice.
2. On the Merits, IEU Has Not Demonstrated that the Order Was Unreasonable
{¶ 13} Nevertheless, although IEU has shown prejudice, it has not
demonstrated reversible error.
{¶ 14} The critical problem is that IEU simply has not presented a
reasoned theory of legal error. It does not even cite a single legal authority in this
section of its brief, much less present an argument that a legal authority applies on
these facts and was violated. This alone is grounds to reject its claim. See, e.g.,
Util. Serv. Partners, Inc. v. Pub. Util. Comm., 124 Ohio St. 3d 284, 2009-Ohio-
6764, 921 N.E.2d 1038, ¶ 53 (rejecting proposition when “[n]o argument is
supplied regarding whether the relevant case law, applied to the facts of this case,
justifies a decision in [appellant’s] favor”); 128 Ohio St. 3d 512, 2011-Ohio-1788,
947 N.E.2d 655, ¶ 56–57 (rejecting argument on the basis that appellant did not
“even purport to cite a specific legal authority that prohibit[ed]” the complained-
of action).
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{¶ 15} IEU does use the word “unreasonable” to describe the order—but
simply asserting that a decision is unreasonable is not enough. See, e.g., id. at ¶
57 (“Conclusory assertions that the commission ‘cannot’ do something fall well
short of demonstrating reversible error”). IEU does not go on to provide a
persuasive explanation of why or how the order fails to accord with reason. Nor
does it explain which statute requires reasonableness, or what that standard
entails, or how the order fails to abide by that standard.
{¶ 16} IEU also points out that the commission had suggested in other
cases that additional proceedings were necessary. Again, however, IEU does not
explain how the law is being violated. In any event, the commission asserts that
the “additional proceedings” are in fact taking place in another docket, and IEU
does not explain why these proceedings are insufficient.
{¶ 17} IEU has done little more than register its disagreement with the
commission’s approach. That is not enough to justify reversal. We presume that
orders are reasonable; it falls to the appellant to upset that presumption. See
Columbus v. Pub. Util. Comm. (1959), 170 Ohio St. 105, 10 O.O.2d 4, 163
N.E.2d 167, paragraph two of the syllabus. IEU has not carried that burden here.
3. We Do Not Decide the Legality of the Commission’s Approach
{¶ 18} Frankly, we find it questionable whether the law permits the
commission to increase rates without first reviewing the reasonableness and
lawfulness of the rates themselves. But we also presume orders to be reasonable,
and IEU must upset that presumption; it is not the other way around. See id.; see
also E. Ohio Gas Co. v. Pub. Util. Comm. (1940), 137 Ohio St. 225, 249, 18 Ohio Op.
10, 28 N.E.2d 599.
{¶ 19} While there may be exceptions, it is not generally the proper role
of this court to develop a party’s arguments. See, e.g., Sizemore v. Smith (1983),
6 Ohio St. 3d 330, 333, 6 OBR 387, 453 N.E.2d 632, fn. 2; see also Henderson v.
Shinseki (2011), __ U.S. __, 131 S. Ct. 1197, 1202, 179 L. Ed. 2d 159 (“Courts do
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not usually raise * * * arguments on their own”). On the contrary, the failure to
present an argument usually constitutes waiver of that argument, and this general
rule is only heightened in appeals governed by R.C. 4903.10, which
jurisdictionally bars us from considering arguments not raised before the
commission on rehearing (“No party shall in any court urge or rely on any ground
for reversal, vacation, or modification not so set forth in the application [for
rehearing]”). See Ohio Consumers’ Counsel v. Pub. Util. Comm., 127 Ohio St. 3d
524, 2010-Ohio- 6239, 941 N.E.2d 757, ¶ 23. Finally, as a matter of basic
fairness, IEU’s failure to identify a legal problem with the commission’s approach
deprived the commission of an informed opportunity to set things right. See, e.g.,
Parma v. Pub. Util. Comm. (1999), 86 Ohio St. 3d 144, 148, 712 N.E.2d 724 (“we
do not accept * * * objections” when appellant has “deprived the commission of
an opportunity to redress any injury or prejudice that may have occurred”).
{¶ 20} Accordingly, we affirm because IEU has failed to meet its burden
to identify a legal problem with the commission’s order. To be clear, however,
our decision does not endorse or ratify the commission’s approach. Nor do we
hold that the commission’s approach below was reasonable and lawful.
III. Conclusion
{¶ 21} Because of IEU’s failure to meet its burden, we must affirm,
although the commission does not derive the precedential benefit from this court’s
decision. We hold simply that IEU has given us no reason to reverse. For the
foregoing reasons, we affirm.
Order affirmed.
PFEIFER, LUNDBERG STRATTON, O’DONNELL, LANZINGER, CUPP, and
MCGEE BROWN, JJ., concur.
_______________________
McNees, Wallace & Nurick, L.L.C., Samuel C. Randazzo, and Joseph E.
Oliker, for appellant.
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Michael DeWine, Attorney General, and Thomas G. Lindgren, William L.
Wright, and Thomas W. McNamee, Assistant Attorneys General, for appellee,
Public Utilities Commission of Ohio.
Steven T. Nourse and Matthew J. Satterwhite, for intervening appellees,
Columbus Southern Power Company and Ohio Power Company.
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