Monday, Aug 20, 2018
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Close the no-refund loophole

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From left, Barry Allen, Ken Byrd, and Jon Hook of FirstEnergy speak during a meeting.

The Blade/Jeremy Wadsworth
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In the recent Ohio Supreme Court ruling that reverses a mandatory consumer refund by the power company FirstEnergy Corp., Justice William O’Neill wrote that even though it may be unfair to rate-payers or result in an unfair windfall for the company, state law gave the court no choice. The state’s Public Utility Commission cannot order such refunds. The court’s hands are tied.

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The court ruled the PUCO lacked the authority to order FirstEnergy Corp. to refund its customers about $43.3 million that the utility had spent on renewable energy credits between 2009 and 2011.

State law, the court ruled, does not require utilities to make such refunds.

The PUCO had ordered the refund after FirstEnergy responded to new regulations requiring it to invest in renewable energy or buy renewable energy credits by spending $43.4 million on the credits. That was about 15 more than any other U.S. company and too much, according to a PUCO ruling.

Power companies, including FirstEnergy, were allowed to pass the cost of those credits along to consumers, so the PUCO in 2013 ordered FirstEnergy to refund customers in the form of reduced rates. FirstEnergy appealed the decision to the high court.

Consumer groups decried the ruling, but have noted Justice O’Neill’s remarks about the limits of state law as it is written.

“Ohioans need their legislature to take swift action to change the law so that utility consumers are protected in the future,” said Dan Doron of The Office of the Ohio Consumers’ Counsel.

There is a bill in the Ohio House that addresses the issue. House Bill 247 would give the PUCO the authority to order refunds of any charges found to be unreasonable, unlawful, imprudent, or otherwise improper by the commission or a court.

The no-refund loophole has cost Ohio energy consumers enough. The General Assembly should take up this bill and move it swiftly to Gov. John Kasich’s desk, where he should sign it.

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