Columbus S. Power Co. v. Pub. Util. Comm. - Ohio Supreme Court Opinion - Ohio Supreme Court Decision

	ROMINGER LEGAL
		Ohio Court Cases and Opinions - Ohio Legal Research
					Need Legal Help?
					Need Legal Help?
LEGAL RESEARCH CENTER
LEGAL RESEARCH CENTER			LEGAL HEADLINES - CASE LAW - LEGAL FORMS	NOT FINDING WHAT YOU NEED? -RESEARCH

This court case was taken from the web sites of the Ohio Courts. Search our site for more cases - CLICK HERE

LEGAL RESEARCH

COURT REPORTERS

PRIVATE INVESTIGATORS

PROCESS SERVERS

DOCUMENT RETRIEVERS

EXPERT WITNESSES

Find a Private Investigator

Find an Expert Witness

Find a Process Server

Case Law - save on Lexis / WestLaw.

Legal News - Legal Headlines

[Cite as Columbus S. Power Co. v. Pub. Util. Comm., 95 Ohio St.3d 8, 2002-Ohio-1487.]

COLUMBUS SOUTHERN POWER COMPANY ET AL., APPELLANTS, v. PUBLIC
UTILITIES COMMISSION OF OHIO ET AL., APPELLEES.
[Cite as Columbus S. Power Co. v. Pub. Util. Comm. (2002), 95 Ohio St.3d 8.]
Public Utilities Commission -- Electric utilities -- Taxation -- Public Utilities
Commission's decision of effective date of excise tax credit rider
affirmed when supported by sufficient probative evidence.
(No. 00-2260 -- Submitted November 27, 2001 -- Decided April 3, 2002.)
APPEAL from the Public Utilities Commission of Ohio, Nos. 99-1729-EL-ETP
and 99-1730-EL-ETP.
__________________

LUNDBERG STRATTON, J. This appeal deals with the provisions of 1999
Am. Sub.S.B. No. 3, which, for the most part, became effective on October 5,
1999. S.B. 3 is a comprehensive statutory scheme to facilitate and encourage the
development of competition in the retail electric market, which added R.C.
Chapter 4928, and amended and enacted various associated Revised Code
Sections. This appeal involves the application of one of those modifications, the
exemption of Ohio's investor-owned electric utilities from the excise tax imposed
on public utilities by R.C. 5727.30, effective May 1, 2001.1

R.C. 4928.31 required electric utilities to file with the Public Utilities
Commission of Ohio proposed transition plans to implement the tax exemption
and to comply with other requirements of S.B. 3. R.C. 4928.31(A)(1) and
4928.34(A)(6). The transition plans filed by appellants, Columbus Southern

1.
Section 4 of S.B. 3 stated that the amendment to R.C. 5727.30 creating the exemption
"shall first apply to the excise tax assessed by the Tax Commissioner for tax year 2002." See,
also, Section 11. The tax year for electric companies is May 1 to April 30. R.C. 5727.33(A). As
later amended by 2000 Am.Sub.H.B. No. 640, R.C. 5727.30(B) specified, "An electric company's

SUPREME COURT OF OHIO
Power Company and Ohio Power Company, included a tariff provision, called an
excise tax credit rider, that provided for a credit to customers' electric service
rates equal to the excise tax expense from which the appellants would be relieved.

The commission decided that the effective date of the appellants' credit
riders would be April 30, 2001. The appellants contend that the effective date
should be April 30, 2002.

The tax that is the subject of this appeal is an annual tax imposed upon a
public utility "for the privilege of owning property in this state or doing business
in this state during the twelve-month period next succeeding the period upon
which the tax is based." R.C. 5727.30. The later twelve-month period is
commonly referred to as the "privilege year" and the earlier period the
"measurement year." Sometimes improperly called a gross receipts tax, this tax is
an excise tax payable during the privilege year, determined by the gross receipts,
including rates paid by customers, of the public utility during the measurement
year. R.C. 5727.38; See E. Ohio Gas Co. v. Limbach (1986), 26 Ohio St.3d 63,
66-67, 26 OBR 54, 498 N.E.2d 453.

The appellants will become exempt from the public utility excise tax after
the end of the privilege year, which will end April 30, 2002. Because they will be
liable for the tax (an operating expense allowable and recoverable for ratemaking
purposes) through the privilege year ending April 30, 2002, the appellants argue
that the excise tax credit rider should not be effective until after that date.

The commission decided that the excise tax credit rider should be effective
one year earlier, after April 30, 2001, the end of the measurement year for the last
privilege year before the effective date of the excise tax exemption, because a
utility's rates are determined on the principle that customers prepay in rates
amounts equivalent to the utility's future excise tax expense, a fact recognized by

or a rural electric company's gross receipts received after April 30, 2001, are not subject to the
annual excise tax imposed by this section."
2

January Term, 2002
this court in Consumers' Counsel v. Pub. Util. Comm. (1987), 32 Ohio St.3d 263,
270, 513 N.E.2d 243. By the end of the measurement year, April 30, 2001, their
customers will have paid to appellants amounts equivalent to appellants' excise
tax expense payable to the state during the succeeding (and last) privilege year.
Postponing the effective date of the excise tax credit rider to after the last
privilege year, ending April 30, 2002, would result in appellants' overrecovery of
their annual excise tax expense, possibly by double or more.

The appellants argue that an effective date of the excise tax credit rider
after the privilege year ending April 30, 2002, is supported by the commission's
decisions in In re FirstEnergy Corp. (July 19, 2000), PUCO Nos. 99-1212-EL-
ETP et seq., and In re Cincinnati Gas & Elec. Co. (Aug. 31, 2000), PUCO Nos.
99-1658-EL-ETP et seq.

However, the commission's actions and approvals in those proceedings
are distinguishable from the commission's actions and approvals in the
proceedings below. The FirstEnergy and Cincinnati Gas transition plan
proceedings each involved the commission's approval of comprehensive
stipulated settlements among the parties, in which the recovery of the utility's
annual excise tax expense was not separately or specifically addressed. If
recovery of that expense was provided for, it was merely by approval of cash
flows, which necessarily include customers' rate payments. There simply is no
way to tell from the stipulated settlement agreements whether the utilities will
recover all or any of their public utility excise tax expenses.

While the commission proceedings in this case involved a stipulated
settlement, that settlement did not address recovery of the appellants' annual
public utility excise tax expense. Rather, that issue was carved out and litigated
for decision by the commission. Because of the differences between the
proceedings in this case and the proceedings in FirstEnergy and Cincinnati Gas,
3

SUPREME COURT OF OHIO
we do not consider the decisions in those two cases to be relevant precedents for
either the commission or this court as to the appellants' excise tax issue.

Under the "unlawful or unreasonable" standard specified in R.C. 4903.13,
this court will not reverse or modify a commission decision as to questions of fact
where the record contains sufficient probative evidence to show that the
commission's determination is not against the manifest weight of the evidence
and is not so clearly unsupported by the record as to show misapprehension,
mistake, or willful disregard of duty. MCI Telecommunications Corp. v. Pub.
Util. Comm. (1987), 32 Ohio St.3d 306, 310, 513 N.E.2d 337. We find that the
commission's decision as to the effective date of the excise tax credit rider is
supported by sufficient probative evidence of record below. Under such
circumstances, we will not substitute our judgment for that of the commission.
Cremean v. Pub. Util. Comm. (1976), 48 Ohio St.2d 163, 2 O.O.3d 342, 357
N.E.2d 1073, paragraph one of the syllabus.

We therefore affirm the commission's decision.
Order affirmed.

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

DOUGLAS and COOK, JJ., concur in judgment.
__________________

Marvin I. Resnik and Edward J. Brady; Porter, Wright, Morris & Arthur
and Daniel R. Conway, for appellants.

Betty D. Montgomery, Attorney General, Duane W. Luckey and Thomas
W. McNamee, Assistant Attorneys General, for appellee Public Utilities
Commission of Ohio.

Robert S. Tongren, Ohio Consumers' Counsel, and Colleen L. Mooney,
Assistant Consumers' Counsel, for intervening appellee Ohio Consumers'
Counsel.
4

January Term, 2002

McNees, Wallace & Nurick, Samuel C. Randazzo, Kimberly Wile Bojko
and Gretchen J. Hummel, urging affirmance for amicus curiae Industrial Energy
Users-Ohio.
__________________
5