COLUMBUS, Ohio - The Ohio Supreme Court is scheduled to hear arguments late next month in a case that tests the Public Utilities Commission of Ohio’s authority to approve rate settlements that increase guaranteed utility revenue while eliminating conservation programs.

The case, which affects hundreds of thousands of Columbia Gas of Ohio customers, including those in Columbiana County, is an appeal filed by two consumer organizations: the Environmental Law & Policy Center and the Citizens’ Utility Board of Ohio. The groups are challenging an agreement approved by the Public Utilities Commission of Ohio, or PUCO, in January 2023.

The settlement allows Columbia Gas to increase its total annual revenue by approximately $68.2 million. A point of contention is the provision that raises the fixed monthly customer charge—the basic fee customers pay regardless of how much gas they use—from $36.15 to $58 by 2027.

The two consumer groups are also challenging the elimination of nearly all of Columbia Gas’s non-low-income energy efficiency programs, which previously offered rebates, weatherization assistance, and other tools to help residential customers lower their bills. Only the low-income WarmChoice program remains funded.

The consumer groups argue that the combination of a high fixed monthly charge, coupled with the elimination of conservation programs, removes the financial incentive for consumers to conserve energy. Because a larger portion of the monthly bill is guaranteed to the utility through the fixed charge, customers have less ability to reduce their total bill by cutting gas usage.

Robert Kelter, a senior attorney for the Environmental Law & Policy Center, stated at the time the order was issued that raising the fixed charge disproportionately harms low-use customers, including those with low incomes, by guaranteeing utility profits at the expense of the consumer's ability to control costs.

Columbia Gas of Ohio, the state’s largest natural gas utility, and PUCO are defending the approved settlement. Their core defense is based on the idea that the approved amount is substantially lower than the utility's original request and provides necessary funding for system safety and infrastructure improvements.

When Columbia Gas initially filed the rate request in 2021, it was seeking an annual revenue increase of $221.4 million. The PUCO staff, in its initial analysis, had recommended an increase in the range of $35 million to $57 million. PUCO officials characterized the final $68 million settlement figure as a reasonable compromise that ultimately saves consumers over $145 million compared to the utility’s original proposal.

Furthermore, the PUCO has argued that eliminating the utility-run, non-low-income efficiency programs is consistent with the state’s energy policy framework. The commission has previously stated that in the absence of utility-mandated programs, the competitive retail energy market should instead provide energy efficiency services to the general consumer population.

However, critics point out that the retail market has not historically provided the same scale of savings or assistance that utility-run programs did. They maintain that the PUCO has a statutory obligation to promote and encourage energy conservation, which they argue is not being fulfilled by relying solely on the private market.

The legal challenge facing the Ohio Supreme Court is whether PUCO’s approval of the settlement meets the required public interest standard. Opponents say the agreement discourages conservation and disproportionately affects vulnerable customers, while granting the utility a significant revenue increase, and thus cannot be reasonably viewed as being in the public interest.

The PUCO, conversely, points to the $70 million dedicated over five years to the low-income WarmChoice weatherization program and a $3.5 million bill-payment assistance fund (funded by shareholders, not customers) as evidence that the settlement appropriately balances interests.

The court's decision will determine if the $58 fixed monthly charge stands and if the Public Utilities Commission was within its legal bounds to rely on competitive markets to replace utility-led conservation efforts.

Oral arguments before the high court are scheduled to be presented on October 29.