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Ohio Supreme Court Rules Utilities May Charge Customers for Pollution Cleanup

The Ohio Supreme Court

Ohio energy companies win some and lose some.  This week they lost a benefit in the new state budget that would have allowed them to charge customers more, in order to achieve better credit ratings.  But today they won, in the Ohio Supreme Court.  

The Court ruled 4 to 3 in a case involving Duke Energy that utilities can charge customers for the cost of cleaning up their polluted land. 

Duke is remediating sites of two old manufactured gas plants in Cincinnati that have been closed for more than 50 years.   

Appellants argued today’s customers should not be charged for plants that are not “used or useful.”  They cited two earlier decisions by the high court that did not allow Ohio Edison to pass on such costs.

But in oral arguments Public Utilities Commission of Ohio lawyer Tom McNamee said just because the plants are closed doesn’t mean they don’t qualify.

“They’re used and useful in providing service. The 2 main pipelines that run under the river come up at these two locations.” 

Four justices agreed and also noted Duke Energy’s cleanup is required by federal law:

(T)he majority concludes that “in this case, the commission did not depart from the Ohio Edison cases; it distinguished those cases on their facts.”  Majority opinion at ¶ 23.  Specifically, according to the majority, the Ohio Edison cases involved “discretionary maintenance costs” for “facilities that the utility no longer used to provide service to its customers,” whereas here, Duke is “under a statutory mandate to remediate the contamination” on the former MGP sites and those sites “required remediation because Duke still had ongoing utility operations on the sites and * * * a nearby planned residential development and bridge-relocation project required Duke to address potentially increased exposure.”

The majority ruled the utility can pass along to customers those $55 million in costs because it is a “necessary and current cost of doing business.”