Wednesday, April 2, 2025
U.S. Acute Care Solutions LLC v. The Doctors Company Risk Retention Group Insurance Company,
Case No. 2024-0450
Fifth District Court of Appeals (Stark County)
State of Ohio v. Hollis Bostick, Case No. 2024-0458
Eighth District Court of Appeals (Cuyahoga County)
State of Ohio v. Todd J. Rogers, Case No. 2024-0872
Twelfth District Court of Appeals (Warren County)
In re Application of the Dayton Power and Light Company, Case No. 2021-1473
Public Utilities Commission of Ohio
Must Allegation of Bad Faith Insurance Claim Go to Arbitration?
U.S. Acute Care Solutions LLC v. The Doctors Company Risk Retention Group Insurance Company, Case No. 2024-0450
Ohio Power Siting Board
ISSUE: Does an insurance policy arbitration provision, which applies to “any dispute between” the parties, include a complaint of bad-faith handling of an insurance claim?
BACKGROUND:
U.S Acute Care Solutions, based in Canton, provides emergency care physicians to hospitals throughout the United States. The Doctors Company Risk Retention Group Insurance Company (TDC) provides medical malpractice insurance. In 2018, David Klein went to the Samford Hospital emergency room in New Haven, Connecticut, complaining of chills, shakes, and other ailments. He was treated by Dr. Lyncean Ung, a U.S. Acute Care Solutions physician. Ung diagnosed Klein with sepsis, a condition where the body’s immune system overreacts to an infection. Ung didn’t prescribe antibiotics, a traditional treatment for sepsis. The disease progressed, and after a month-long stay at Samford Hospital, Klein needed both of his legs amputated below the knee and removal of parts of nine fingers.
In 2020, Klein sued the hospital, Ung, Acute Care, and others. Acute Care submitted a claim to TDC, its malpractice insurer at the time. TDC assigned the claim to a claims specialist and hired an attorney from an outside law firm to represent Acute Care in the dispute. In mid-2022, Klein and his attorney participated in a mediation with a representative from Acute Care, the TDC-appointed lawyer, and TDC’s claims specialist. TDC made what Acute Care described as a “lowball offer” to settle , which Klein immediately rejected. Acute Care and the TDC-appointed attorney both agreed that Ung’s care would be hard to defend, and Klein was a sympathetic figure, which a jury would likely want to compensate.
Health Provider Urges Settlement
Acute Care and Klein agreed to a December 2022 deadline to reach a settlement. As the deadline approached, Acute Care pressed TDC to increase its offer. TDC refused. Expressing concern that if the matter went to court, Acute Care would face the risk of a verdict significantly in excess of what its malpractice coverage limit provided in the TDC policy, Acute Care requested that TDC settle for an amount within the policy limits. TDC presented another low offer that Klein rejected. Instead of going to court, Acute Care paid to settle the lawsuit with its own funds.
Acute Care then filed a lawsuit against TDC in Stark County Common Pleas Court. Acute Care accused the insurer of handling the claim in bad faith and sought reimbursement for the full amount of the undisclosed settlement it paid to Klein.
Before any proceedings advanced in court, TDC pointed to the arbitration provisions in its insurance policy. It filed a motion to direct the matter to binding arbitration. In July 2023, the court agreed and dismissed the case, sending the dispute to arbitration. Acute Care appealed to the Fifth District Court of Appeals. The Fifth District reversed the trial court’s decision, finding the case could be heard in common pleas court rather than arbitration.
TDC appealed to the Ohio Supreme Court, which agreed to hear the case.
Policy Language Requires Matter Be Arbitrated, Insurer Argues
TDC maintains the Fifth District’s decision is wrong because the appeals court misinterpreted a 2023 Ohio Supreme Court ruling and didn’t accurately apply the plain language of the policy. The main policy included a binding arbitration clause, which read, “Any dispute between you and us relating to this Policy (including any dispute regarding our extra-contractual obligations) will be resolved by binding arbitration….” The policy with Acute Care included an endorsement, which replaced “extra-contractual obligations” with “contractual obligations.” The insurer indicated the language in the endorsement trumped the language in the main policy.
The Fifth District cited the Court’s 2023 Scott Fetzer Co. v. Am. Home Assur. Co., Inc. decision, which stated a claim that an insurance company acted in bad faith isn’t rooted in the insurance contract but is controlled by “operation of law,” which meant the language in the policy didn’t apply to the court case. The appeals court deemed the allegation of bad faith claim handling to be “extra-contractual,” and noted that since the company replaced the arbitration language to omit “including extra-contractual obligations,” arbitration wasn’t required, and Acute Care could proceed in the trial court.
TDC argues that isn’t an accurate reflection of the insurance policy language. The contract covers “any dispute” relating to the policy, including claims handling, and the dispute is subject to arbitration. TDC argues the Court was split 5-2 in Scott Fetzer on whether a bad faith claim was governed by the policy. However, the Court’s decision indicated unanimous agreement that an insurance company’s obligation to operate in good faith arises only because of the relationship between the insured and the insurer, TDC notes. That relationship only exists because of the policy, and an allegation of failing to act in good faith is related to the policy, the insurer asserts.
TDC notes the case was transferred to arbitration before the insurer presented to the trial court the reasons it disputed the accusation that it acted in bad faith. The company maintains it would be pointing to provisions in the policy to support its position. Because the policy language is essential to resolving the conflict, the matter is not “extra-contractual,” but rather is related to the policy, the insurer argues. Since the matter is related to the policy, it is a matter that must be considered in arbitration, TDC concludes.
Policy Plays No Role in Dispute, Policyholder Argues
Acute Care explains there are two types of bad faith claims. One type depends on the language of the policy and the other doesn’t. One accusation is bad faith denial of coverage, and the other is bad faith claims handling, the policyholder notes. The Scott Fetzer case dealt with both. Because the policyholder in Scott Fetzer argued its claims were covered by the policy, the Court had to first consider whether the insurer’s denial of coverage was made with bad faith, Acute Care notes. This is where the language of the policy is at issue in a bad faith claim, and this is where the Court unanimously agreed the matter is related to the policy, Acute Care explains.
However, when the allegation is bad faith claims handling, it has nothing to do with the policy and is “extra contractual,” Acute Care argues. TDC changed the policy language to omit a requirement of arbitration for extra-contractual obligations. The policy didn’t require the parties to arbitrate the dispute, Acute Care asserts. Further, Acute Care notes the Scott Fetzer decision found a bad faith claims handling complaint arises by operation of law, meaning the policy language didn’t prevent a trial court from considering the issue. The insurance policy doesn’t explain what TDC considers to be good faith claims handling, so there is no need for a fact finder to examine the policy language to determine whether TDC’s actions were in bad faith, Acute Care asserts.
Acute Care also argues that TDC seeks a broad interpretation of “relates to.” The policyholder disagrees with TDC’s claim that arbitration applies to any dispute “relating to the parties' relationship,” which includes how TDC handled Acute Care’s claim. Instead, the contract states arbitration applies to “any dispute relating to this Policy.” The Fifth District found the handling of the claim was a matter outside the terms of the written policy and isn’t subject to arbitration, Acute Care notes. Acute Care argues the appeals court’s interpretation is reasonable and shouldn’t be overturned.
– Dan Trevas
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing The Doctors Company Risk Retention Group Insurance Company: Aneca Lasley, aneca.lasley@icemiller.com
Representing U.S. Acute Care Solutions LLC: Craig Pelini, cgp@pelini-law.com
Must Court Conduct Hearing To Determine if Withheld Evidence Should Lead to New Trial?
State of Ohio v. Hollis Bostick, Case No. 2024-0458
Eighth District Court of Appeals (Cuyahoga County)
ISSUE: When evidence withheld from a defendant indicates the defendant didn’t commit the crime, and the credibility of the evidence is at issue, must a trial court conduct an evidentiary hearing before ruling on whether the defendant is entitled to a new trial?
BACKGROUND:
In 2003, Hollis Bostick was convicted of the attempted murder of Tommie Griffin as well as other charges stemming from a March 2002 early morning shooting outside of a Cleveland restaurant. Griffin testified that Bostick was with Lonnie “Bud” McCann that evening. Griffin told the jury Bostick shot him as he tried to run. He limped back to the bar for help and as he entered, McCann punched him in the jaw. Griffin identified Bostick as the shooter. McCann and three women who were acquainted with McCann and Bostick also testified they were outside of the restaurant and identified Bostick as the shooter. McCann admitted being at the scene but denied punching Griffin.
Bostick was sentenced to 20 years in prison. He made several unsuccessful attempts to have his conviction overturned or to receive early release. In 2018, the Ohio Innocence Project, through a public records request, discovered a report from one of the first officers to respond to the shooting. That officer didn’t testify at Bostick’s trial . In the report, Griffin stated the “offender” who shot him went by “Bud,” but he didn’t know his real name. He identified the white Cadillac car McCann drove. Shortly after providing that information to the officer, other police located McCann’s vehicle and stopped him. McCann was arrested based on other charges and outstanding warrants, and police brought him in for questioning.
The Innocence Project turned the information over to the Cuyahoga County Public Defender’s Office. The public defender also obtained an affidavit from Bostick’s trial lawyer, who stated that he never received the report in which Griffin initially identified McCann as the shooter and later changed his story. The trial lawyer had argued during the trial that it was McCann, not Bostick, who shot Griffin. The trial lawyer wrote that had the police report been available, it would have allowed him to press the investigators and challenge McCann’s claim that Bostick was the shooter.
Because the report was discovered more than 15 years after Bostick’s conviction, the public defender had to request leave from the court for permission to file a motion for a new trial. Because of technical issues, the Cuyahoga County Prosecutor’s Office didn’t object to the request. In 2021, the trial court allowed Bostick to present his request for a new trial, which included the submission of the police report and the statement of the trial attorney. At this stage, the prosecutor objected to a new trial, arguing the evidence of Bostick’s guilt was overwhelming.
A year later, the trial court denied the motion for a new trial without a written opinion . Bostick appealed to the Eighth District Court of Appeals, arguing he was entitled to a new trial or at least an in-person evidentiary hearing by the trial judge to review his new evidence and allow him to explain why he should receive a new trial. In a 2-1 decision, the Eighth District affirmed the trial court’s decision.
Bostick appealed to the Ohio Supreme Court, which agreed to hear the case.
Hearing or New Trial Necessary, Offender Argues
Bostick notes the trial judge’s entry dismissing his case only indicated that it was “pursuant to Rule 33” and provided no other explanation. He argues that Rule 33 of the Ohio Criminal Rules of Procedure governs the granting of new trials and that in cases where credible evidence could change the outcome of the case, a trial judge, at a minimum, should conduct an actual hearing on the matter. In upholding the trial court’s brief entry, the Eighth District misinterpreted what is necessary to grant a new trial based on the claim of improperly withheld evidence, Bostick argues.
Under the criminal rules, a new trial request must be filed within 120 days of the verdict. However, Crim.R. 33 establishes a two-step process when a motion, such as Bostick’s, is filed after 120 days. The first step requires the offender to explain why the filing is delayed, and one valid justification is that the defendant couldn’t reasonably discover the information within 120 days, Bostick explains. The Eighth District agreed he met that requirement based on the withheld report. The second step in the rules required Bostick to show that the newly discovered evidence has a “strong probability that it will change the result if a new trial is granted,” he notes.
However, when the reason the evidence wasn’t available at the time of the trial was because the prosecution withheld the information, the standard for a new trial drops from “strong probability” to “reasonable probability,” he explains. This lessens the burden on Bostick.
Further, the Eighth District didn’t accurately assess the matter, he asserts. Bostick argues Griffin changed his story, and it isn’t uncommon for a person in a neighborhood quarrel to lie about such matters. While there was evidence that Griffin had a previous fight with Bostick and was involved in other disputes with him, there was also evidence from Griffin that he had feared McCann. Bostick notes that McCann pointed the police to the three women who testified that Bostick committed the crime, and they were interviewed by police days after the incident. The Eighth District’s evaluation of the evidence presented at trial was incorrect and determined the outcome of the appeal, he argues.
Bostick notes at the trial, the prosecutor questioned police investigators about the matter, and they responded that there was no evidence that McCann was the shooter. Bostick argues the police would have a hard time making that statement if they had to acknowledge that the initial police report indicated that Griffin accused McCann of shooting him. The standard of “reasonable probability” doesn’t mean Bostick has to prove the outcome would be different, only “sufficient to undermine confidence in the outcome,” Bostick’s brief stated. The trial court should have granted him a new trial based on that standard, or at least conducted an evidentiary hearing where the trial participants could explain how the report could have led to a different outcome, he concludes.
Full Review of Evidence Points to Offender, Prosecutor Argues
Bostick places too much value on the belated release of the police report, and its content wouldn’t change the outcome of the case, the prosecutor argues. The prosecutor fully recounted to the Eighth District the testimony of witnesses and police investigators. The office notes Griffin identified Bostick as the shooter and said McCann punched him. The initial police report may have been unclear, as the report was taken when Griffin was in the hospital being treated for the gunshot wounds to his legs, the prosecutor explains.
Beyond the witness statements, the prosecutor also points to other information in the record, including that Bostick fled the scene and attempted to evade arrest. He also tried to persuade a witness not to testify, and the witness recorded the conversation and shared it with police, the office notes. While in prison, he sought judicial release and, in those efforts, stated he was remorseful and accepted responsibility for his actions.
The prosecutor disputes whether the police report was actually newly discovered evidence. The investigators who testified at trial didn’t state that they read a report where Griffin identified McCann. However, they were told that McCann was an initial suspect, and that McCann was arrested and questioned shortly after the first report was taken. The office notes that in all the follow-up investigations, all evidence pointed to Bostick as the shooter.
The prosecutor argues the determination to grant a new trial balances the newly discovered evidence against the total amount of evidence presented during the trial. The office agrees that the “reasonable probability” standard must be met and is lower than a “strong possibility” standard, but it still requires more than what Bostick can establish. When determining whether reasonable possibility exists, the offender must show the likelihood of a different result is substantial, not just conceivable, the prosecutor asserts.
The criminal rules give a trial judge discretion to conduct a hearing before ruling on a motion for a new trial. Bostick’s requests didn’t provide enough to justify a new hearing or a new trial, the prosecutor concludes, and the Eighth District’s decision should be upheld.
Ohio Attorney General Participates in Case
The Ohio Attorney General’s Office submitted an amicus curiae brief supporting the prosecutor’s position. The Court also granted the attorney general’s request to share oral argument time with the prosecutor.
– Dan Trevas
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing Hollis Bostick: Erika Cunliffe, ecunliffe@cuyahogacounty.us
Representing the State of Ohio from the Cuyahoga County Prosecutor’s Office: Tasha Forchione, tforchione@prosecutor.cuyahogacounty.us
Representing the Ohio Attorney General’s Office: T. Elliot Gaiser, thomas.gaiser@ohioago.gov
Based on Prospective Juror’s Responses, Was Defendant Denied Right to Impartial Jury?
State of Ohio v. Todd J. Rogers, Case No. 2024-0872
Twelfth District Court of Appeals (Warren County)
ISSUES:
- When prospective jurors confirm as a group that they will apply the law, does that overcome one prospective juror’s expressions of partiality?
- After expressing partiality, must a prospective juror individually affirm that he or she can be impartial to be seated on the jury?
BACKGROUND:
In September 2022, a Warren County grand jury indicted Todd Rogers on charges of rape, attempted rape, and gross sexual imposition involving his daughter. She was under age 10 at the time of the alleged offenses. The case went to trial in July 2023. Questions for the prospective jurors were asked by the trial court, the prosecutor, and defense counsel during voir dire. Some questions were directed to prospective jurors individually, and other questions were asked to the group as a whole.
The trial court explained the nature of the case and that it involved a child. The judge explained to prospective jurors that they would hear from a child witness, noting people might empathize with children but jurors must decide what the truth is in the case and whether the state proves the charges beyond a reasonable doubt.
The judge said to the group of prospective jurors: “You can’t apply sympathy and you can’t apply prejudice. It has to be fair when you’re evaluating this case. Is there anyone who thinks they would have trouble doing that with a child witness?”
One prospective juror, identified in the briefs by the fictitious name “McCarthy,” responded, “I might have a hard time with it.” The judge asked McCarthy: “Do you think you can follow the instructions I give to you in this case .... Can you put that aside and listen to the evidence and – and be fair?” McCarthy responded: “It’s a good question. I don’t have an answer for you.” The judge said the attorneys could explore McCarthy’s responses further.
During the state’s questioning, the assistant prosecutor asked the group, “Are there people who are like hey, that’s not my kinda case?” McCarthy responded, “I might be expressive. I apologize. Just – I’m sure all of us feel the same way.” The assistant prosecutor said, “And I don’t want to find out tomorrow that what you felt was – you know, hey, I – this is something I don’t want to do. I’m not – I really didn’t want to sit on this, right?” McCarthy didn’t respond.
Defense counsel asked the group, “So if you had to give us a verdict right now, guilty or not guilty, knowing that there’s a presumption of innocence, that he’s innocent as he sits here right now, what would your verdict be?”
McCarthy responded, “I’d say it’d be hard for me to say that’s he’s not guilty.” He added, “… because we’re here … and there’s someone from the police department that’s gonna talk. So, yeah, people don’t wind up here from not doing anything.” Defense counsel didn’t seek to remove McCarthy as a juror.
Prospective Juror Seated on Jury
McCarthy was placed on the jury. After evidence was presented, the jury deliberated and found Rogers guilty. He was sentenced to 15 years to life in prison.
Rogers appealed to the Twelfth District Court of Appeals, arguing his attorney provided ineffective assistance by failing to challenge McCarthy for cause. Rogers contended that he was deprived of his constitutional right to an impartial jury by McCarthy’s inclusion on the jury. The Twelfth District disagreed and upheld the convictions. It noted in its April 2024 ruling that when the jury as a group was asked if they could apply the law as explained to them, and other similar questions, the full jury, including McCarthy answered in the affirmative. Given the record as a whole, McCarthy wasn’t biased, the appeals court concluded.
Rogers appealed to the Ohio Supreme Court, which agreed to review the issues.
Man Contends Juror Conveyed Bias, Tainting Jury
Rogers’ brief explains that a defendant is deprived of the constitutional right to an impartial jury when a single biased juror is seated on a jury. A conviction by a jury tainted by bias can’t be relied on with certainty, the brief notes.
Rogers argues that McCarthy expressed actual bias against him throughout voir dire. McCarthy conveyed that he didn’t know if he could fairly evaluate a case involving a child or if he could put aside feelings in the child’s favor. He also said he would have difficulty presuming Rogers was innocent until proven otherwise, Rogers notes. “It is hard to imagine a more explicit admission of bias,” his brief states. It asserts that the comments indicate McCarthy couldn’t act with impartiality.
Rogers also contends that the responses of the jurors as a group to follow the law didn’t overcome McCarthy’s individual expressions of bias. Rogers points to the Ohio Supreme Court’s decision in State v. Bates (2020), where a conviction was overturned and a new trial ordered because of a juror’s racially biased statements on a jury questionnaire. He notes that two justices wrote concurring opinions rejecting the idea that generic questions to a jury as a group would establish that one individual juror wasn’t biased.
To be rehabilitated after expressing bias, the prospective juror must swear to set aside his or her feelings and decide the case based on the evidence, and that affirmation must be made individually, Rogers maintains. He concludes that McCarthy expressed actual bias against him and never individually said he would set those opinions aside, resulting in a jury that wasn’t impartial.
State Counters That Juror’s Internal Struggle Isn’t Bias
The Warren County Prosecutor’s Office responds that there is a difference between a juror’s prior belief and a bias requiring the juror to be disqualified. A preconceived notion about a defendant’s guilt or innocence isn’t enough to demonstrate a prospective juror isn’t capable of being impartial, the prosecutor maintains.
The prosecutor argues that McCarthy’s responses displayed his internal struggle, rather than showing an actual bias against Rogers. McCarthy said he “might” have a hard time with a child witness. The prosecutor asserts that having a hard time with a decision isn’t actual bias. Nor is it unreasonable for an ordinary person to walk into a courtroom, see a defendant at a table, and tend to think the defendant must’ve done something, the prosecutor maintains. That attitude would only be bias if it were irrational or unshakeable. McCarthy’s statements didn’t “amount to a fixed, unalterable opinion or an unshakable bias” or show that McCarthy’s “mind was closed and that he was unable or unwilling to listen to the evidence and the court’s instructions and be fair and impartial,” the prosecutor’s brief argues.
The prosecutor also points to McCarthy’s lack of a response to the assistant prosecutor’s question regarding whether prospective jurors didn’t want to be part of a jury on this case. McCarthy remained silent. The fact the that assistant prosecutor then moved on to other topics demonstrates that McCarthy’s demeanor satisfied the assistant prosecutor that there was no reason why McCarthy couldn’t serve on the jury, the prosecutor argues.
The office contends that Bates doesn’t apply because it involved a clear statement of bias with no reassurances of impartiality. In Bates, there were no responses from the prospective jurors when a defense counsel asked whether the group could be fair and impartial.
The prosecutor also maintains that a complete assessment of a juror’s ability to be fair and impartial includes consideration of a juror’s responses to group questions. The combination of McCarthy’s responses to individual and group questions sufficiently assured the court and the attorneys that he could be impartial, listen to the evidence, and fairly decide the case, the prosecutor concludes.
Attorney Association Files Brief Backing Neither Side
An amicus curiae brief was submitted by the Ohio Association of Justice in support of neither party . The association contends that the state legislature has established standards in R.C. Chapter 2313 for seating juries, but neither party has discussed or referenced them in their briefs. The association asks the Court to follow the statutes, which list good causes for juror challenges, and the disqualification required with certain principal challenges, including when a person’s answers show the person cannot be a fair and impartial.
– Kathleen Maloney
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing Todd J. Rogers: Nathan Coyne, ncoyne@taftlaw.com
Representing the State of Ohio from the Warren County Prosecutor’s Office: Kirsten Brandt, kirsten.brandt@warrencountyprosecutor.com
Was PUCO Decision That No Refund Was Due to Utility Customers Lawful?
In re Application of the Dayton Power and Light Company, Case No. 2021-1473
Public Utilities Commission of Ohio
ISSUES:
- Did the Public Utilities Commission of Ohio (PUCO) act unreasonably and unlawfully when it didn’t require an electric utility to return “significantly excessive earnings” to customers?
- Did the PUCO abuse its discretion when it approved a settlement that allowed continued charges on customers for rate stabilization?
- Was the PUCO approval of the rate stabilization charge unlawful because it violates statute and is contrary to Ohio Supreme Court precedent?
BACKGROUND:
This appeal involves a set of four cases about electric services provided by Dayton Power & Light, which does business as AES Ohio. The utility company serves approximately 452,000 residential customers in the Dayton area.
At the end of the timeframe set for an electric security plan (ESP), the Public Utilities Commission of Ohio (PUCO) applies a “significantly excessive earnings test” (SEET) to determine if the utility received significantly excessive earnings. The SEETs calculated for AES Ohio for 2018 and 2019 are two of the cases in this appeal.
The company’s “smart grid plan” is the subject of the third case in the appeal. The plan is designed to modernize the company’s distribution grid. In 2018, AES Ohio submitted its smart grid plan to the PUCO for approval.
The fourth case addresses the required PUCO review of AES Ohio’s electric security plan. In November 2019, AES Ohio withdrew an application for a third ESP (ESP III). The PUCO restored the company’s earlier ESP (ESP I), which was approved in 2009. Because the term of the ESP I had exceeded three years, the company was subject to a “quadrennial review” by the commission. One component of ESP I was a rate stabilization charge.
In October 2020, the PUCO consolidated the four cases to consider a “stipulation and recommendation” from the company, PUCO staff, and intervening parties. The Ohio Consumers’ Council (OCC) objected to the proposed settlement. While the commission was considering the case, the Ohio Supreme Court ruled in a utilities case involving Ohio Edison Company, Cleveland Electric Illuminating Company, and Toledo Edison Company (First Energy, collectively). The Supreme Court determined that when applying the SEET, the PUCO should have included revenue First Energy earned from a charge called a distribution modernization rider. The Court remanded the case to the PUCO to conduct a new SEET proceeding.
In light of the Court’s First Energy decision, the PUCO attorney examiner in the AES Ohio case allowed the parties to submit testimony about how the SEET should now be calculated in their case.Regulator Finds Utility’s Earnings Not ‘Significantly Excessive’
In June 2021, the PUCO issued an opinion and order in the case. In part, the commission concluded that AES Ohio had excessive earnings of $61.1 million, but that those earnings weren’t “significantly excessive” given other factors required to be considered.
In requests for the PUCO to rehear the case, the OCC argued the commission shouldn’t have denied refunds to customers for the excessive earnings. The OCC also contested the PUCO approval of a $79 million rate stabilization charge on customers. The PUCO rejected the arguments.
The OCC appealed to the Court, which is required to hear appeals of PUCO decisions.
Consumers’ Council Argues Offsets to Profits Undermined State Law
The OCC notes that the PUCO found AES Ohio earned $61 million in excessive profits in 2018 and 2019. Under state law, customers are owed refunds of significantly excessive earnings, the OCC argues. The statute explaining how to conduct SEETs limits the profits of utilities to protect customers, the OCC maintains.
The law also allows the commission to consider a utility’s future committed investments when deciding whether the earnings are significantly excessive. However, electric utilities always expect to make future capital investments, the OCC contends. While the PUCO can consider future capital investments, that consideration doesn’t give the PUCO the ability to “outright deny consumers the refunds they are entitled to,” the OCC brief states. It contends that such an interpretation undermines the law’s purpose to protect customers from paying electric rates that are too high.
The OCC also challenges the PUCO’s approval for AES Ohio to charge $79 million annually on customers for rate stabilization. In multiple cases, the Ohio Supreme Court has reversed these types of unlawful charges, the OCC argues. The group contends that, despite the Court rulings, the PUCO is allowing AES Ohio to impose the stability charge again, based on the earlier approval of the charge in 2009 under ESP I. Over four years, the company would garner “$300 million of forbidden fruit under Ohio law,” the OCC brief asserts.
The PUCO’s decision approving these charges was unlawful and unreasonable, the OCC concludes.
Utility Asserts That PUCO Followed Law, Plan Benefits Customers
AES Ohio maintains that the PUCO found the stipulation and recommendation was overwhelmingly beneficial to customers when it approved the proposal. When the PUCO considers future capital investments, it has broad discretion how to consider them, the company asserts, and the regulator can limit or eliminate refunds if they would interfere with the utility’s ability to make future investments. The company maintains that the PUCO correctly found the investment of $267.6 million in smart grid technology wouldn’t be possible if the company was required to issue refunds.
The company also dismisses the OCC arguments regarding the rate stabilization charge. When the company withdrew the third ESP, the PUCO was required to reinstate the first ESP, which included the stability charge, AES Ohio contends. It maintains that the Supreme Court has twice ruled that the stability charge is lawful, and the OCC is prohibited from challenging it given that it signed the agreement creating the charge.
The company also filed a cross appeal “in an abundance of caution,” offering alternative reasons for the Supreme Court to uphold the PUCO’s order.
– Kathleen Maloney
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing Ohio Consumers’ Counsel: Angela O’Brien, angela.obrien@occ.ohio.gov
Representing the Public Utilities Commission of Ohio from the Ohio Attorney General’s Office: Thomas Lindgren, thomas.lindgren@ohioago.gov
Representing Dayton Power and Light Company, doing business as AES Ohio: Jeffrey Sharkey, jsharkey@ficlaw.com
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