In re Application of Duke Energy Ohio, Inc., for an Increase in Its Natural Gas Rates

Summary

The Supreme Court of Ohio affirmed the Public Utilities Commission of Ohio’s order allowing Duke Energy Ohio, Inc. to recover through natural-gas distribution rates costs associated with retiring its propane caverns. The court held that the deferred costs could be treated as costs of rendering public-utility service under R.C. 4909.15(A)(4), rather than being subject to the used-and-useful standard in R.C. 4909.15(A)(1).

Holdings

1. The commission did not err by refusing to apply R.C. 4909.15(A)(1)’s used-and-useful standard because the deferred amount had been removed from Duke Energy’s plant account and treated as an expense rather than as a capital investment in rate-base property.
2. The commission reasonably and lawfully determined that the entire deferred amount associated with retiring the propane caverns was a cost to Duke Energy of rendering public-utility service under R.C. 4909.15(A)(4).
3. The court did not decide the OCC’s challenge to the commission’s alternative used-and-useful finding because that issue was moot, and it rejected the refund argument because the OCC could not show harm or prejudice.

Questions Presented

1. Whether the commission unlawfully or unreasonably permitted Duke Energy to recover the deferred retirement-related costs under R.C. 4909.15(A)(4), rather than applying the used-and-useful standard in R.C. 4909.15(A)(1).
2. Whether the commission’s alternative finding that the propane caverns were used and useful was against the manifest weight of the evidence.
3. Whether the commission abused its discretion by declining to make the challenged rates subject to refund while the appeal was pending.

Disposition

affirmed