‘Ratepayers of Ohio deserve better’ than no-refund law

The complete repeal of HB 6 is what’s needed for Ohioans.

Ohio’s General Assembly continues to dither over House Bill 6, the 2019 law to bail out the Perry and Davis-Besse nuclear plants now owned by a former FirstEnergy Corp. subsidiary, now-independent Energy Harbor Corp.

The Senate passed a partial HB 6 repeal bill Wednesday. HB 6, as passed in 2019, then signed by Gov. Mike DeWine, would suck an estimated $150 million a year from the checkbooks of Ohio consumers. Senate

Bill 44, passed Wednesday, would abolish the $150 million in customer charges.

HB 6’s complete repeal — which is what’s needed — would fully restore long-standing Ohio clean-energy requirements. There’s something else a HB 6 repeal bill should do: End Ohio’s no-refund law. The bill senators passed Wednesday, SB 44, leaves the no-refund law untouched.

Here’s what then-Supreme Court Justice Paul E. Pfeifer, a Bucyrus Republican, wrote in 2014, about Ohio’s no-refund rule in an American Electric Power Co. rate case: “Allowing AEP to retain the $368 million that it collected based on charges that were not justified is unconscionable. Doing so because of a 50-year-old case that is not supported by the statute on which it is based is ridiculous. The ratepayers of Ohio deserve better.”

Pfeifer was referring to a 1957 Ohio Supreme Court decision in Keco Industries vs. Cincinnati and Suburban Bell. The 2014 decision, which Pfeifer opposed, relied on the 1957 decision to deny AEP customers refunds of overturned rates.

Why? Then-Justice Judith Ann Lanzinger, a Toledo Republican, wrote this in 2014, for the court’s no-refund majority: “[This] court has consistently applied Keco and refused to grant refunds in appeals from [PUCO] orders.”

The backdrop: In 1952, the PUCO approved a Cincinnati and Suburban

Bell rate increase. But in 1954, the Supreme Court ordered the PUCO to shrink the increase. Then, as in 2021, Ohio lets utilities collect rate-increases even if someone appeals them.

Keco, for itself and other consumers, sued, saying Bell should refund the dollar difference between the rate Bell customers paid during the appeal and the lower rate the Supreme Court ordered. Keco was seeking roughly $1.65 million in refunds – about $15.6 million today, according to a U.S. Bureau of Labor Statistics inflation calculator.

Then, in a unanimous 1957 ruling, the Supreme Court, in an opinion by Justice John M. Matthias, a Columbus Republican, refused to order refunds Keco sought: “Common sense and reason lead us to a wholehearted endorsement of [that] conclusion, as [was] so well stated … in the opinion of Judge [Carson] Hoy of the Hamilton County Court of Common Pleas.”

That was Clue No. 1 that maybe there was a little more to the Keco doctrine than an 11th commandment. Maybe the Cincinnati Establishment was taking care of business.

Hoy, once Hamilton County’s prosecuting attorney — arguably, that county’s most powerful job — was a big enough Republican that he was among those picked to greet 1940 GOP presidential nominee Wendell Willkie when he made a campaign stop in Cincinnati.

Keco appealed Hoy’s no-refund ruling. Then came Clue 2 the Keco case wasn’t just another day in Traffic Court: The Keco appeal, possibly for appearance’s sake, was assigned to Toledo’s 6th District Appeals Court — not Cincinnati’s 1st District court, which usually hears Hamilton County appeals.

The three Toledo judges, including at least one Republican, overturned Hoy’s no-refund decision. Then, as usual, the Supreme Court rescued the status quo. Its four Republicans and three Democrats sided with Cincinnati’s Hoy, saying, through Matthias, that “the General Assembly has … abrogated the common-law remedy of restitution in such cases.”

That’s fair? No, that’s Ohio.