Legislators, watchdog want requirement for utility refunds

Two bills in Ohio’s legislature are furthering the push by the state’s consumer watchdog to require the utilities commission to refund millions to customers who paid for charges later deemed improper by the state Supreme Court

CLEVELAND (AP) —

Two bills in Ohio’s legislature are furthering the push by the state’s consumer watchdog to require the utilities commission to refund millions to customers who paid for charges later deemed improper by the state Supreme Court.

Electric customers, since 2009, have paid $1.5 billion in such charges that the Public Utilities Commission of Ohio failed to make subject to refunds, Ohio Consumers' Counsel Bruce Weston said.

In a statement, Weston said it's a "travesty of justice for consumers.”

"It would be understandable if Ohioans think the system is rigged against them in favor of utilities with their undue influence,” he said.

According to the Office of the Consumers’ Counsel, Dayton Power & Light collected $548 million, AEP Ohio $526 million and FirstEnergy Corp. $456 million in customer charges deemed improper over the last decade.

Jenifer French, during a recent confirmation hearing for her appointment as the new chair of the utilities commission, said the Legislature would have to pass a law allowing the commission to include refund provisions.

”I think the Supreme Court was very clear on that,” French said.

But Republican Sen. Mark Romanchuk, of Ontario, disagreed, saying the Supreme Court already gives the commission the power to order refunds.

“That’s $1.5 billion that has been pulled out of our economy, which I would argue is not a good thing,” he said during the hearing.

The confusion about what charges are subject to refund is largely a group effort by the utility commission, the court and the Legislature's arcane state utility laws. The court in a 5-2 vote in 2014 cited a 1957 decision that said improper charges by a Cincinnati telephone company were not subject to a refund. AEP Ohio was allowed to keep $368 million customers paid to recover costs associated with environment-related spending.

Fast forward to a 2019 Supreme Court ruling that said the commission improperly gave Akron-based FirstEnergy Corp. the authority to collect around $160 million a year for upgrades that both the company and the commission acknowledged would be used to bolster FirstEnergy's credit rating, not new equipment.

The $456 million was placed into a “credit” pool from which FirstEnergy companies, including those located outside Ohio, could borrow from.

The PUCO said in its original order that requiring a refund would be counterproductive and defeat its purpose. The ruling said the $456 million could not be refunded because the commission failed to include a requirement for paying back customers.

Months later, the utility commission, based on the court's earlier ruling, ended Dayton Power & Light's ended charges for a rider similar to FirstEnergy’s from which the company had charged customers $218 million. No refunds were ordered.

Romanchuk has not signed on as a co-sponsor for the two pending refund bills. He introduced his own legislation as a state representative several years ago to require refunds.

“This is easily solved, but we need to have the political courage to do it,” Romanchuk said. “In the real world, when we make a mistake or something is paid that shouldn’t be paid, it should be immediately refunded.”

A co-sponsor of the House bill, Republican Laura Lanese, a Republican from Grove City, said in written testimony: “I can’t think of anything more common sense or more judicious than returning money that shouldn’t have been received in the first place.”

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