The issue to be decided today is, in determining a motion to dismiss a complaint before the commission alleging a violation of the Certified Territory Act, can the commission look beyond two individual contracts, over which the commission admittedly has no jurisdiction, to determine whether the totality of the evidence alleges a potential violation of the Certified Territory Act?
Our review of this issue is a question of law. Accordingly, we address this issue using a de novo standard of review. Indus. Energy Consumers of Ohio Power Co. v. Pub. Util. Comm. (1994), 68 Ohio St.3d 559, 563, 629 N.E.2d 423, 426.
*524I
Standard for Dismissal for Failure to State a Claim
In a civil case before a court, “it must appear beyond doubt from the complaint that the plaintiff can prove no set of facts entitling him to recovery” before a motion to dismiss can be granted. O’Brien v. University Community Tenants Union, Inc. (1975), 42 Ohio St.2d 242, 71 O.O.2d 223, 327 N.E.2d 753, syllabus. Further, in ruling on the motion to dismiss, all material factual allegations of the complaint must be taken as true. See Vail v. Plain Dealer Publishing Co. (1995), 72 Ohio St.3d 279, 649 N.E.2d 182. The commission has adopted the same standard in reviewing motions to dismiss brought under R.C. 4905.26, i.e., that all of the complainants’ factual allegations must be taken as true. In re Toledo Premium Yogurt v. Toledo Edison Co. (Sept. 17, 1992), case No. 91-1528-EL-CSS, at 2.
The present case is brought under R.C. 4933.83 of the Certified Territory Act. Thus, the holding in Toledo Premium Yogurt is not directly on point in this case. However, the commission’s order of dismissal in this matter indicated that it had accepted all CEI’s allegations as true. Accordingly, the commission must accept all allegations as true in determining whether to dismiss a complaint brought under the Certified Territory Act.
In its complaint, CEI alleged that “AEP negotiated directly with Medical Center, either on its own or in conjunction with Cleveland, regarding the 50 MW sale and purchase.” CEI also alleged:
“The 50 MW transaction between AEP and Cleveland, and the 50 MW transaction between Cleveland and Medical Center, are two halves of the same transaction. The purchase is in reality a purchase from AEP, and the service provided by Cleveland, a wheeling service to effectuate the Medical Center purchase.”
If the above allegations claimed by CEI are taken as true, as is required by the • commission’s own standards in evaluating a motion to dismiss, then CEI’s complaint must survive a motion to dismiss. While the commission may not have jurisdiction over either the OPC/CPP contract or the CPP/MCC contract individually, the totality of the evidence could indicate that the real intention of the deal was to transfer electricity from OPC to MCC using two independent transactions, which would violate the Certified Territory Act.
In such an instance, the commission must look beyond the surface of the two contracts to see if there was an underlying deal between OPC and MCC, thereby establishing a prima facie case of a violation of the Certified Territory Act.
As previously mentioned, the commission’s primary reasoning for dismissing this case was its perceived lack of jurisdiction. Specifically, the commission found that it did not have jurisdiction because the CPP/MCC transaction was exempt *525from being subject to the Certified Territory Act. The commission apparently made a cursory review of count two of CEI’s complaint as to whether MCC was an electrical supplier. There was no analysis of count three of CEI’s complaint. Therefore, upon remand, the commission should consider CEI’s complaint in its entirety.
It is important to note that we make no determination as to the existence or sufficiency of evidence as to the merits of any of CEI’s allegations. Such a determination is for the commission alone to make. However, the fact that at least facially, two discrete transactions were used in this purchase should not prevent the commission from determining whether the purchase comports with the Certified Territory Act when viewed in its entirety.
II
FERC’s Jurisdiction
The import of this decision does not require the commission to improperly regulate an area where the federal government has preempted the field with regard to the FERC’s regulation of wholesale power transactions. The commission’s review will be of the entire alleged transaction from OPC to MCC by way of CPP, not an analysis of the OPC/CPP contract. Thus, the commission would not be encroaching into FERC’s jurisdiction over the OPC/CPP contract.
Further, in Fed. Power Comm. v. S. California Edison Co. (1964), 376 U.S. 205, 215-216, 84 S.Ct. 644, 651, 11 L.Ed.2d 638, 646, the Supreme Court stated:
“ * * * Congress meant to draw a bright line easily ascertained, between state and federal jurisdiction * * *. This was done in the [Federal] Power Act making [FERC] jurisdiction plenary and extending it to all wholesale sales in interstate commerce except those which Congress has made explicitly subject to regulation by the States. ” (Emphasis added.)
Section 824k(h), Title 16, U.S.Code (prohibition on mandatory retail wheeling and sham transactions) states: “Nothing in this subsection shall affect any authority of any State or local government under state law concerning the transmission of electric energy directly to an ultimate consumer.” In examining the alleged sham transaction (the alleged deal between OPC and MCC by way of CPP), the commission will be scrutinizing whether OPC has made a retail deal with MCC. As stated above, retail deals are explicitly excluded from FERC’s exclusive jurisdiction.
Ill
A Municipality’s Authority to Buy or Sell Electricity Pursuant to Article XVIII of the Ohio Constitution
Under Article XVIII, municipalities have certain powers, including the authority to “acquire * * * any public utility the products or service of which is or is to *526be supplied to the municipality or its inhabitants, and may contract with others for any such product or service.” Section 4, Article XVIII of the Ohio Constitution. The Certified Territory Act excepts from its coverage municipalities acting pursuant to Article XVIII of the Ohio Constitution. R.C. 4933.83(A). However, this court’s decision does not eviscerate a municipality’s powers to buy or sell electricity under Article XVIII, of the Ohio Constitution. That is not a result of this opinion, nor should it be the practical result. Rather, this decision is to prevent a utility from circumventing the Certified Territory Act by selling electricity to an entity to which it cannot sell under the Act, by inserting a straw man to legitimize the deal. It is only in a fact-specific situation such as the case at bar, where the complaint alleges that there was an agreement between OPC and MCC to sell electricity from OPC to MCC using CPP as the straw man conduit, that the commission has jurisdiction to hear a complaint alleging a violation of the Certified Territory Act. Failure to reach this narrow factual threshold will result in a failure to state a claim upon which relief could be granted.
The commission is free to find, based on the evidence, that each transaction stands on its own merit and was not merely a sham transaction, and that each contractual transaction must be honored regardless of whether the other contract proceeds. Essentially, this decision should provide a delicate balance by preserving a municipality’s right to freely purchase electricity pursuant to the Ohio Constitution, yet preventing utilities from circumventing the Certified Territory Act on the rare occasion when there is evidence that shows that a utility has used a straw man to effectuate a sale of electricity for the sole purpose of circumventing the Certified Territory Act. Accordingly, we hold that the Public Utilities Commission has jurisdiction to consider a complaint alleging that a sale of electricity was initiated by a utility to a retail user using a straw man to effectuate the deal for the sole purpose of circumventing the Certified Territory Act.
IV
Conclusion
Within these narrow definitions, we find that CEI’s complaint sets out sufficient allegations to withstand a motion to dismiss for lack of jurisdiction. The commission failed to take the essence of CEI’s allegations as true for purposes of a motion to dismiss, relying solely on its technical analysis of a lack of jurisdiction over the separate transactions.
*527Therefore, the court reverses the commission’s dismissal of CEI’s complaint and remands the cause to the commission with instructions to reinstate CEI’s complaint and proceed with a hearing on the same.
Order reversed and cause remanded.
Douglas, F.E. Sweeney, Pfeifer and Cook, JJ., concur. Douglas, J., concurs separately. Moyer, C.J., and Resnick, J., dissent.