Office of Consumers' Counsel v. Public Utilities Commission

Locher, J.,

dissenting. I dissent from the majority opinion because this case sidesteps the rationale of Consumers’ Counsel v. Pub. Util. Comm. (1981), 67 Ohio St. 2d 158 [21 O.O.3d 96], dismissed in 455 U.S. 914 (“CEI”), and for the additional reasons stated in my dissent in Consumers’ Counsel v. Pub. Util. Comm. (1983), 6 Ohio St. 3d 405 (“Toledo Edison”) (case No. 82-1428).

Once again the commission has ignored the testimony of its own staff witness: “The Staff would agree that if an amortization is used, or if remaining life based accrual rates are used, then a depreciation reserve adjustment would be appropriate. However, the Staff policy is that recovery of under-accruals or the makeup of past losses should not be borne by the current and future ratepayers.” The staff position, therefore, reflects this court’s holding in CEI, the basis of which is the test-year concept.

In CEI, we refused to allow the utility to pass on the costs of a speculative investment to consumers. We held that investors should bear that kind of risk.

Yet, in this case the commission has ratified what is — in the words of a company witness — a “prospective method” to arrive at a “theoretical reserve calculation” and created a new expense for consumers to pay without any commensurate enhancement of service. “Furthermore, a minori*416ty of this court has already recognized the inequity of permitting utilities to manipulate depreciation figures to increase rates. See Duff v. Pub. Util. Comm. (1978), 56 Ohio St. 2d 367, 382 [10 O.O.3d 493] (Locher, J., dissenting).” Toledo Edison, supra, at 412.

Like-wise, the commission errs by relying on R.C. 4905.18. That provision permits depreciation accounts but does not endorse the “prospective method” and “theoretical reserve calculation” employed to the utility’s benefit in this case.

Therefore, the decision and order of the commission is unreasonable because it ignores the testimony of its own staff witness as well as those of both the utility and the Office of Consumers’ Counsel. Likewise, the commission’s ruling is unlawful because (1) the Revised Code does not provide a basis for this type of expense; and (2) this amortization of a depreciation variance is expressly contrary to this court’s holding in CEI.

Accordingly, I would reverse the order of the commission.