Weiss v. Pub. Util. Comm. - Ohio Supreme Court Opinion - Ohio Supreme Court Decision

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[Cite as Weiss v. Pub. Util. Comm., 90 Ohio St.3d 15, 2000-Ohio-5.]

WEISS, D.B.A. CENTER WEST REALTY COMPANY, ET AL., APPELLANT, v. PUBLIC
UTILITIES COMMISSION OF OHIO ET AL., APPELLEES.
[Cite as Weiss v. Pub. Util. Comm. (2000), 90 Ohio St.3d 15.]
Public Utilities Commission -- Allegations that rates charged outside the
geographical area of a "competitive pilot program" were discriminatory --
R.C. 4905.31, 4905.33, and 4905.35 do not prohibit all discrimination --
Discounts are permitted based on competition -- Commission's dismissal of
complaint affirmed.
(No. 99-444 -- Submitted May 23, 2000 -- Decided September 20, 2000.)
APPEAL from the Public Utilities Commission of Ohio, No. 97-876-EL-CSS.

This is an appeal from orders of the Public Utilities Commission of Ohio in
a complaint proceeding brought by Mark R. Weiss, doing business in the names of
several commercial real estate companies, against the Cleveland Electric
Illuminating Company ("CEI"), pursuant to R.C. 4905.26. Weiss complained that
the rates CEI charged him for service at locations outside the geographic
boundaries of CEI's "Competitive Pilot Program" were discriminatory and
prejudicial, in violation of R.C. 4905.31, 4905.33, and 4905.35. On January 14,
1999, the commission issued its opinion and order, dismissing Weiss's complaint

on the basis that CEI's rates were not discriminatory or prejudicial in violation of
the statute.

Weiss appealed the commission's decisions to this court, and CEI intervened
as an appellee.

The cause is now before this court upon an appeal as of right.
__________________

Spangenberg, Shibley & Liber, Dennis R. Landsdowne and Mary A.
Cavanaugh; and Frank E. Piscitelli, Jr., for appellant.

Betty D. Montgomery, Attorney General, Duane W. Luckey, Tanisha Lyon
Brown and William L. Wright, Assistant Attorneys General, for appellee Public
Utilities Commission of Ohio.

Jones, Day, Reavis & Pogue, Paul T. Ruxin, David A. Kutik and Helen L.
Liebman; and James W. Burk, for intervening appellee Cleveland Electric
Illuminating Company.
__________________

LUNDBERG STRATTON, J. This appeal concerns the reasonableness and
legality of rates charged by CEI for electric service rendered to customers at
different locations within its service territory.

In 1992, CEI sought commission approval of its Competitive Pilot Program,
which would permit it to enter into "competitive response contracts" for service to

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eligible customers at discounts from its tariffed rates, and other benefits that were
not available to its tariff customers. To be eligible for this program, a customer
had to be a commercial or industrial customer with a demand between one hundred
fifty kW and five hundred kW and be located where it could receive electric
service from Cleveland Public Power ("CPP"). In 1993, the PUCO approved
CEI's proposed Competitive Pilot Program and approved an expansion of it to
include commercial and industrial customers with demands between thirty kW and
one hundred fifty kW.

CPP provides service to much of the east side of Cleveland, but not to most
of Cleveland's west side and western suburbs. In 1997, the commission denied an
application by CEI to expand its Competitive Pilot Program to include the west
side of Cleveland, where CEI anticipated that competitive electric service from
CPP could become available. In denying the expansion application, the
commission said that it would consider expansion on an individual, case-by-case
basis when actual competition was shown to exist.

Weiss operates three commercial real estate properties (office buildings) in
Rocky River, Ohio, a western Cleveland suburb outside the previously approved
geographical boundaries of the Competitive Pilot Program. CPP does not provide
service in Rocky River. After CEI determined that because of the locations of
Weiss's office buildings, Weiss was not entitled to discounts and other benefits

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extended under the Competitive Pilot Program, Weiss complained to the
commission that his exclusion from CEI's Competitive Pilot Program violated the
prohibitions of R.C. 4905.31, 4905.33, and 4905.35 against discrimination and
preferences, arguing that those statutes are "clear and unambiguous in [their]
prohibition of discriminatory pricing."

We reject Weiss's argument. R.C. 4905.31, 4905.33, and 4905.35 do not
prohibit all discrimination.

R.C. 4905.31(D) explicitly permits a public utility to enter into "any
reasonable arrangement" with its customers that discriminates among them
according to "[a] classification of service based upon * * * any * * * reasonable
consideration." Thus, a discriminatory classification is not prohibited if it is
reasonable.

R.C. 4905.33 prohibits discriminatory pricing for "like and
contemporaneous service" rendered "under substantially the same circumstances
and conditions." If the utility services rendered to customers are different or if
they are rendered under different circumstances or conditions, differences in the
prices charged and collected are not proscribed by R.C. 4905.33.

R.C. 4905.35 prohibits a utility from making or giving "any undue or
unreasonable preference or advantage" or imposing "any undue or unreasonable
prejudice or disadvantage." The statute does not prohibit all preferences,

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advantages, prejudices, or disadvantages--only those that are undue or
unreasonable.

As to R.C. 4905.31, we do not accept Weiss's argument that the phrase "any
other reasonable consideration" must be limited by the specific statutory
considerations that precede it. Those considerations are "the quantity used, the
time when used, the purpose for which used, and the duration of use."
In
State ex rel. Purdy v. Clermont Cty. Bd. of Elections (1997), 77 Ohio
St.3d 338, 673 N.E.2d 1351, we said: " `If the meaning of a statute is unambiguous
and definite, then it must be applied as written and no further interpretation is
appropriate' " and " `Words used in a statute must be accorded their usual, normal
or customary meaning.' " Id. at 340, 673 N.E.2d at 1353, quoting State ex rel.
Herman v. Klopfleisch (1995), 72 Ohio St.3d 581, 584, 651 N.E.2d 995, 997, and
State ex rel. Hawkins v. Pickaway Cty. Bd. of Elections (1996), 75 Ohio St.3d 275,
277, 662 N.E.2d 17, 19. In Purdy, we adopted the meaning of the word "any" as
set forth in Webster's Third New International Dictionary (1971) 97: " `Any'
means `one or some indiscriminately of whatever kind.' " Id. Purdy supports the
conclusion that the phrase "any other reasonable consideration" in R.C.
4905.31(D) is not limited by statutory examples of specific other valid
considerations or by decisions of this court approving of considerations of cost of
service and customers' service needs.

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Moreover, the commission's 1993 approval of CEI's Competitive Pilot
Program and its expansion were grounded on the existence of a competitive service
provider within CEI's service territory. In 1997, the commission declined to
expand the availability of the benefits offered under the Competitive Pilot Program
and, by so doing, emphasized the existence of a competitive service provider for a
CEI customer as a reasonable consideration justifying rates other than tariffed rates
under competitive response contracts entered into pursuant to R.C. 4905.31. The
commission found that "[c]lassifying customers based on the availability of a
competitive alternative for electric service is, in this case, a reasonable basis for an
electric utility to classify its customers." Based on that finding, the commission
further found that CEI's Competitive Pilot Program and the competitive response
contracts entered into under the program did not violate R.C. 4905.31.

We accept the commission's interpretation of R.C. 4905.31 as allowing
discounts based on the existence of competition.1 Due deference should be given
to statutory interpretations by an agency that has accumulated substantial expertise
and to which the General Assembly has delegated enforcement responsibility.
Collinsworth v. W. Elec. Co. (1992), 63 Ohio St.3d 268, 272, 586 N.E.2d 1071,
1074. "[L]ong-standing administrative interpretations [of statutes] are entitled to
special weight." Cleveland v. Pub. Util. Comm. (1981), 67 Ohio St.2d 446, 451,
21 O.O.3d 279, 282, 424 N.E.2d 561, 565.

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Weiss contends that CEI's Competitive Pilot Program and his exclusion
from it violate the proscriptions of R.C. 4905.33 because the program results in
different rates being charged to customers in the same class for contemporaneous
service rendered under substantially the same circumstances and conditions. Weiss
defines the class as being small business customers falling within the same demand
range.

However, as the commission noted, there is a distinction between CEI's
small business customers that are located where they can receive electric service
from a competitor of CEI (in this case, CPP) and those small business customers
that are located where no competitive electric service is available to them. We
agree with the commission's finding that the difference between such customers,
based on location determined by availability of competitive electric service,
constituted a real difference with a reasonable basis and with the commission's
conclusion that the difference justified a rate differential between the two
geographical areas.

Moreover, within each area, there is no rate differential, and CEI provides
service within each area under substantially the same circumstances and
conditions. Every other small business customer located within the portion of
CEI's service territory where competitive electric service is unavailable is required

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to pay the same tariff rates as are payable by Weiss for the same electrical usage.
Thus, as the commission determined, there was no violation of R.C. 4905.33.

Weiss also contends that CEI's Competitive Pilot Program and its
competitive response contracts gave undue or unreasonable preference or
advantage to certain of CEI's customers with whom he competed, resulting in his
being subjected to undue or unreasonable prejudice or disadvantage in violation of
R.C. 4905.35. Weiss's contention fails in several respects.

R.C. 4905.35 proscribes public utilities from giving undue or unreasonable
preferences or advantages, and although CEI's Competitive Pilot Program makes
available to some of its customers certain advantages that are not available to
Weiss, Weiss made no showing to the commission that such preferences and
advantages were undue or unreasonable.

We agree with the commission's finding that Weiss was not prejudiced by
the existence of CEI's Competitive Pilot Program, from which Weiss was
geographically excluded, because, if there were no Competitive Pilot Program,
owners of commercial buildings located where CEI and CPP compete with each
other would still be eligible for CPP's lower rates that are not available to Weiss.
The commission said: "Therefore, * * * Complainant's competitors would still
have an advantage over Complainant with regard to the rates paid for electric
service. We do not believe that Respondent's [CEI's] Competitive Pilot Program

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does give customers in the program an undue or unreasonable advantage vis-à-vis
the Complainant."

In addition to the foregoing claimed errors based on Ohio's statutory
regulatory scheme, Weiss argues that denial to him of the benefits available under
CEI's Competitive Pilot Program constitutes a denial of equal protection of the
law. The Equal Protection Clause of the United States Constitution, as well as the
corresponding clause of the Ohio Constitution, "[s]imply stated, * * * requires that
individuals be treated in a manner similar to others in like circumstances." State ex
rel. Doersam v. Indus. Comm. (1989), 45 Ohio St.3d 115, 119, 543 N.E.2d 1169,
1173. There was no denial to Weiss of equal protection of the law, because denial
to Weiss of the benefits of the Competitive Pilot Program was based on a
reasonable classification of customers, and CEI's customers in the same
classification as Weiss are treated similarly to Weiss.

Last, we reject Weiss's argument that the commission committed reversible
error in refusing to hear his complaint case as a class action.

R.C. 4901.13 provides that the "commission may adopt and publish rules to
govern its proceedings and to regulate the mode and manner of all * * * hearings
relating to parties before it." "Under R.C. 4901.13 the commission has broad
discretion in the conduct of its hearings." Duff v. Pub. Util. Comm. (1978), 56
Ohio St.2d 367, 379, 10 O.O.3d 493, 500, 384 N.E.2d 264, 273. "It is well-settled

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that pursuant to R.C. 4901.13, the commission has the discretion to decide how, in
light of its internal organization and docket considerations, it may best proceed to
manage and expedite the orderly flow of its business, avoid undue delay and
eliminate unnecessary duplication of effort." (Footnote omitted.) Toledo
Coalition for Safe Energy v. Pub. Util. Comm. (1982), 69 Ohio St.2d 559, 560, 23
O.O.3d 474, 475, 433 N.E.2d 212, 214. If Weiss had prevailed, the commission
would have been obligated to adjust rates for the remaining ratepayers,
accomplishing the same purpose as a class action.

Based on the commission's authority invested by R.C. 4901.13 and its broad
discretion to act under that statutory provision, we find no error on the part of the
commission in refusing to hear Weiss's complaint case as a class action.

Accordingly, the commission's orders below are hereby affirmed.
Orders affirmed.

MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY and CHRISTLEY, JJ.,
concur.

PFEIFER, J., concurs in judgment only.

JUDITH A. CHRISTLEY, J., of the Eleventh Appellate District, sitting for
COOK, J.
FOOTNOTE:
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1. In addition to the commission's decisions involving CEI's
Competitive Pilot Program, see Allnet Communications Serv., Inc. v. Pub. Util.
Comm. (1994), 70 Ohio St.3d 202, 638 N.E.2d 516, in which competitive
circumstances were recognized by the commission as justification for rate
differentials.
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