The Ohio Supreme Court today decided two disputes regarding public utilities, including claims about which natural gas company can provide distribution service to a large housing development in southern Delaware County and whether a common pleas court is the proper forum to challenge an electric company’s decision to spray herbicide to kill vegetation near a power line in Harrison County.

• In In re Complaint of Suburban Natural Gas Co. v. Columbia Gas of Ohio, Inc., a Court majority affirmed the Public Utilities Commission of Ohio (PUCO) decision that Columbia Gas had the right to offer financial incentives to Pulte Homes, the developer of the 490-home Glenross South subdivision.
• In Corder v. Ohio Edison Co., a Court majority found a common pleas court, not the PUCO, should decide if a 1948 easement allows Ohio Edison to use herbicide rather than cut trees and brush near a power line located on the land of an organic farm.

Gas Provider Asserts Competitor Intruded upon Service Territory
Suburban Natural Gas serves about 550 customers in the Glenross subdivision on the north side of Cheshire Road in southern Delaware County. Suburban’s main gas line runs along the north side of Cheshire Road, and the company managed and planned its system to accommodate the next phase of Pulte Homes’ Glenross development.

Pulte proposed to build Glenross South, with about 490 homes, on the south side of Cheshire Road. Pulte accepted incentives from Columbia Gas’ “EfficiencyCrafted Homes Program” and contracted with Columbia to serve the new development. The program offers cash incentives to home builders that constructed homes that exceed certain energy-efficiency standards.

In October 2017, Suburban filed a complaint with the PUCO, arguing that Columbia improperly paid builder incentives to Pulte to gain an unfair competitive advantage in an area where Suburban already served or was readily capable of serving. The complaint sought to stop Columbia from extending its gas-distribution main line to serve Glenross South, maintaining that the move would violate state laws against constructing unnecessary, duplicative utility facilities.

During proceedings before the commission, Columbia constructed an extension of its main gas line along the south side of Cheshire Road, parallel to Suburban’s line, to provide service to Glenross South. The PUCO denied Suburban’s complaint, and Suburban appealed to the Supreme Court, which is obligated to consider appeals of the commission’s decisions.

Writing for the Court majority, Justice Michael P. Donnelly stated that Suburban failed to demonstrate reversible error on appeal. The majority rejected Suburban’s arguments that a 1995 agreement between the parties barred Columbia from using builder incentives to compete against Suburban. The majority also rejected Suburban’s legal and factual claims that Columbia had unlawfully duplicated Suburban’s facilities in order to serve the Glenross South subdivision. Suburban relied on testimony from the chief deputy engineer for Delaware County that duplication of service facilities is undesirable, but the opinion noted, that this same witness testified that some duplication is inherent in the design of gas lines and even unavoidable because of engineering issues.

The Court also found that Pulte never requested that Suburban serve the Glenross South development and the builder was under no obligation to select Suburban. And the Court agreed with the PUCO’s determination that Columbia’s offer of the EfficiencyCrafted Homes incentives was not unlawful, unfair, or anticompetitive because Suburban provided no proof that the incentives drove Pulte to pick Columbia to serve Glenross South, and Suburban was free to establish and offer its own energy-efficiency incentives, but did not.

Chief Justice Maureen O’Connor and Justices Judith L. French, Patrick F. Fischer, R. Patrick DeWine, and Melody J. Stewart joined the opinion. Justice Sharon L. Kennedy concurred in judgment only.

Common Pleas Court Should Decide Transmission Line Easement Dispute
Three members of the Corder family own property, including an organic farm, in Nottingham Township in Harrison County, where an electric-transmission line operated by Ohio Edison runs. A 1948 easement gives Ohio Edison “the right to trim, cut and remove at any and all times such trees, limbs, underbrush and other obstructions” that may interfere with or endanger the line’s operation.

Following a widespread blackout in 2003 , the Federal Electric Regulatory Commission required all public utilities to implement a program to prevent vegetation from interfering with transmission lines. The PUCO adopted the program for Ohio. FirstEnergy Service Company administered it for Ohio Edison’s service territory.

In 2017, FirstEnergy Service notified the Corders that the company had determined that the best way to manage the vegetation in the easement was to use herbicides. The Corders objected, stating that herbicides are incompatible with their use of the land as an organic farm.

The Corders filed a lawsuit in Harrison Common Pleas Court seeking to prevent the use of herbicides on their property and a declaratory judgment that the power company’s easement only gave them the right to trim or cut vegetation.

Ohio Edison responded that decisions regarding the vegetation management plan were exclusively under the PUCO’s jurisdiction. The trial court noted that the parties disputed whether the term “remove” in the easement included the use of herbicides. However, the court stated that the PUCO had exclusive jurisdiction to decide the matter, and it granted summary judgment to Ohio Edison without considering the merits of the arguments.

The Corders appealed to the Seventh District Court of Appeals, which reversed the trial court’s decision. The Seventh District ruled that the interpretation of the language in the easement is a matter for a court to resolve because the issue does not require the specialized knowledge of the PUCO about the operations of utilities. The Seventh District held that the language was ambiguous and that the common pleas court ought to determine what property rights Ohio Edison gained from the easement.

Ohio Edison appealed the decision to the Supreme Court, which agreed to hear the case.

Trial Court Should Decide Matter
Writing for the Court majority, Justice Kennedy explained that the General Assembly had vested the PUCO with exclusive jurisdiction over most matters relating to public utilities, including the rates charged and the services provided. However, she noted that the PUCO is not a court and may not adjudicate claims involving competing property rights, including the scope of an easement granted to a public utility.

“The determination of the scope of an easement does not depend on the PUCO’s exercise of its administrative expertise or its review of a public utility’s vegetation-management program, but rather requires a court to interpret and apply the language of the instrument creating the easement,” she wrote.

The Court held that a court of common pleas has subject-matter jurisdiction to determine whether the use of herbicide to control vegetation is within the scope of a public utility’s easement.

The majority opinion stated that the Seventh District went too far in its decision when it determined the language was ambiguous, and it should have limited itself to the “narrow issue” raised by the Corders, which was whether the common pleas court, not the PUCO, should decide the matter. The Court remanded the case to the common pleas court to address the scope of the easement in the first instance.

Justices French, Donnelly, and Stewart joined Justice Kennedy’s opinion. Justice Fischer concurred in judgment only.

Dissent writes that the Supreme Court should decide the meaning of the easement
Justice DeWine concurred in part and dissented in part, and Chief Justice O’Connor joined his opinion. Justice DeWine agreed that the courts, not the PUCO, had the power to decide the issue, but he noted that the Supreme Court had all the necessary information to decide the case without sending the matter back to the trial court. He wrote the term “remove,” when read within the entire context of the easement, gave Ohio Edison the right to use herbicides to maintain the power lines.

The court of appeals determined that because the easement did not include a comma after the word “cut” in the phrase “trim, cut and remove,” Ohio Edison could remove vegetation by trimming or cutting it, but could not remove it in any other manner. Justice DeWine said that as a practical matter, that interpretation made little sense.

“Take, for instance, a utility’s decision to pull a bush out of the ground, roots and all. Under the court of appeals’ interpretation, the language of the instrument would not authorize such a method because it does not involve cutting or trimming the plant,” he wrote.

Justice DeWine explained that the phrase “trim, cut and remove” did not apply only to vegetation but also to the removal of “other obstructions” — such as a stone wall, a treehouse, or a kite caught on the power lines. Because those obstructions cannot be removed by trimming or cutting, he said, the word “remove” in the easement must mean that the utility can remove obstructions in other ways. The use of herbicides is a manner of removing the vegetation, and that method is permitted under the easement, Justice DeWine concluded.

2019-1765. In re Complaint of Suburban Natural Gas Co. v. Columbia Gas of Ohio, Inc., Slip Opinion No. 2020-Ohio-5221.

View oral argument video of this case.

2019-0951. Corder v. Ohio Edison Co., Slip Opinion No. 2020-Ohio-5220.

View oral argument video of this case.

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