concurring in part and dissenting in part.
{¶ 64} I concur in the majority opinion with regard to the first three propositions of law. However, I dissent from the majority’s decision to affirm the commission’s order requiring that Vectren refund $1.98 million to its customers in relation to Vectren’s asset-management contract with ProLiance. While the commission upon reconsideration did reduce the refund it initially found was due, from $3.83 million to $1.98 million, I believe that the record does not justify any commission-ordered refund based on the ProLiance contract.
{¶ 65} As the majority explains, the commission disallowed the ProLiance contract primarily because it yielded much less revenue for Vectren’s customers than the same assets had provided to DP & L’s customers under DP & L’s asset-management contract with Columbia Energy Services two years earlier. However, in my view, the commission erred when it used the DP & L-Columbia Energy Services contract as a basis to evaluate the reasonableness of the ProLiance contract. While the commission found that differences between the two contracts did not justify the different revenue levels, I believe that there are significant differences in the purpose, terms, and conditions of the ProLiance and DP & L contracts that make any comparison inherently flawed.
{¶ 66} First, the ProLiance contract served purposes beyond maximizing revenues. For instance, unlike the DP & L contract, Vectren’s agreement with ProLiance included contractual rights supporting its Customer Choice Program. Under this program, Vectren (1) sells peaking services to Customer Choice suppliers, (2) makes pipeline storage available to Choice suppliers, (3) offers pipeline capacity to Choice suppliers, and (4) plans deliveries in a manner to ensure continued system reliability if a Choice supplier defaults. In short, Vectren designed a capacity-management strategy to support customer choice, and it entered into the ProLiance agreement as a means of enhancing the success of its Customer Choice Program.
{¶ 67} Other differences between the ProLiance and DP & L contracts justified the lower revenues generated by the ProLiance contract. For example, under the agreement, ProLiance paid Vectren approximately $1.5 million per year for the right to remarket its capacity. Yet Vectren retained the right to recall capacity from ProLiance and assign it to Customer Choice suppliers, which allowed Vectren to maintain control of capacity that might be needed to support its Customer Choice Program. This required ProLiance to assume more risk regarding the unused capacity, which in turn reduced the value of the asset-management contract to ProLiance.
{¶ 68} Similarly, the ProLiance agreement provided Vectren with valuable capacity-reduction rights that were not included in the DP & L agreement. The *196reduction rights allowed Vectren to reduce its capacity portfolio up to specified levels in anticipation of Vectren’s customer base switching to competitive suppliers. As a result, Vectren was able to mitigate both gas costs and stranded costs associated with customer migration to the Customer Choice Program and further facilitate the program. Moreover, the risk of remarketing the excess capacity was again shifted to ProLiance because Vectren no longer had to pay this cost when it reduced its capacity portfolio.
{¶ 69} In addition, Vectren was not required to provide a refund to ProLiance in the event that Vectren recalled capacity for system supply. In contrast, DP & L had to pay refunds to Columbia Energy Services whenever the capacity that Columbia Energy Services had purchased became unavailable due to DP & L’s supply needs. In other words, ProLiance again assumed greater financial risk by paying Vectren for projected capacity regardless of whether this capacity was actually available for ProLiance to resell on the open market.
{¶ 70} Second, the ProLiance and the DP & L asset-management agreements were entered into at different times. Specifically, Vectren entered into its agreement with ProLiance at a time when changes to the natural gas market rendered any comparison between the contracts untenable.
{¶ 71} Evidence before the commission showed that the value of Vectren’s unused capacity had declined substantially in 2000, after the DP & L-Columbia Energy Services contract and prior to the Vectren-ProLiance contract. This devaluation occurred when Columbia Gas Transmission restructured its market areas and essentially eliminated firm rights to secondary delivery points outside the Dayton area. This restructuring limited Vectren’s ability to transfer unused capacity to certain markets on the Columbia Gas Transmission system. According to a Vectren witness, this action gutted the value of Vectren’s unused Columbia Gas Transmission capacity, the very capacity that Columbia Energy Services had obtained from DP & L and relied upon to deliver gas cheaply to competitive Eastern markets.
{¶ 72} Admittedly, the commission did take the devaluation of the Columbia Gas Transmission market into account on rehearing when it reduced Vectren’s ordered refund for the ProLiance contract from $3.83 million to $1.98 million. Yet the commission continued to use the flawed comparison between the two agreements as the foundation for the refund order.
{¶ 73} Even without the differences between the two contracts, market data during the audit period revealed that the compensation ProLiance paid for the right to remarket Vectren’s unused capacity was reasonable. Vectren submitted evidence that it received $3,446,220 from the ProLiance contract during the audit period, while the fair market value for the released capacity rights was $2,899,745. Vectren also presented evidence from after the audit period that *197showed that Vectren had secured reasonable value from ProLiance for its capacity in a diminishing market.
McNees, Wallace & Nurick, L.L.C., Samuel C. Randazzo, Gretchen J. Hummel, Lisa G. McAlister, and Daniel J. Neilsen, for appellant. Marc Dann, Attorney General, and Duane W. Luckey, Werner L. Margard III, and Thomas G. Lindgren, Assistant Attorneys General, for appellee Public Utilities Commission of Ohio. Janine L. Migden-Ostrander, Ohio Consumers’ Counsel, and Joseph P. Serio and Ann M. Hotz, Assistant Consumers’ Counsel, for appellee Ohio Consumers’ Counsel.{¶ 74} Finally, Vectren reasonably made a conservative, less risky selection when it chose ProLiance as an asset manager. Vectren selected ProLiance because ProLiance was an affiliate of Vectren’s parent corporation. Thus, Vectren was able to better monitor ProLiance’s risk policies and financial viability. Indeed, Vectren presented evidence that of the portfolio managers identified as potential candidates, many had either entered bankruptcy, were no longer in business, or had been implicated in various investigations of price manipulation.
{¶ 75} In sum, the record reflects that Vectren made a prudent and reasonable decision to enter into an asset-management contract with ProLiance. The ProLiance contract allowed Vectren to obtain fair market value for its unused capacity while shifting much of the risk of remarketing that capacity to ProLiance. Comparison to the DP & L-Columbia Energy Services contract is simply unwarranted. I would therefore reverse the commission’s order requiring that Vectren refund $1.98 million to its customers for the ProLiance contract. Instead, I would hold that Vectren is not required to refund any gas costs recovered through the ProLiance contract. Accordingly, I concur in part and dissent in part.