Opinion
No. 39037
Decided June 30, 1965.
Public utilities — Subject to regulation by governmental agency — "Consumer" of electric energy reselling to his lessees — Amenable to regulation by Public Utilities Commission.
1. Public utilities, because of the nature of their business in providing the public with necessary products and services, are subject to supervision, regulation and control by governmental agencies established for that purpose, inter alia, to protect those served with respect to the fairness of rates charged, adequacy of service, discriminatory practices and like matters.
2. Within the provisions and meaning of Section 4905.03 (A) (4), Revised Code, the term, "consumer," used in reference to an Ohio public utility supplying electric energy, includes an Ohio resident receiving and paying for the electric energy furnished him by such public utility, and the fact that such "consumer" resells through submetering a part of such electric energy to others connected with him as lessees, tenants or in other business relationships does not thereby remove the public utility from its character as such, and it is amenable to supervision, regulation and control by the Public Utilities Commission of Ohio. And where the "consumer" complains of a regulation proposed by the utility covering the furnishing of electric energy which will adversely affect him and which he claims will discriminate against him, the Commission must assume and exercise jurisdiction as provided in Section 4905.04 et seq., Revised Code.
APPEAL from the Public Utilities Commission.
This proceeding arose initially in the Public Utilities Commission of Ohio, hereinafter called the Commission, upon an application by the Cleveland Electric Illuminating Company, an Ohio public utilities corporation, hereinafter called the Company, to file a new regulation covering its sales of electric energy for resale and stating the conditions under which the Company would make or refuse to make such sales for resale.
Paragraph (F) of such proposed new regulation provides that "Redistribution or submetering [of electric energy] shall not be permitted with respect to aggregations of separate commercial or retail users such as those commonly known as shopping centers."
Thereafter, Shopping Centers Association of Northern Ohio and its individual members as affected persons and upon application were granted leave by the Commission to intervene in the proceeding. Later, actions in mandamus and prohibition were brought in this court by the Company, in which actions it was decided "that the Commission should be allowed, in the first instance, to determine its own jurisdiction and questions of fact arising thereunder." See State, ex rel. Cleveland Electric Illuminating Co., v. Public Utilities Commission, 173 Ohio St. 450, 183 N.E.2d 782.
Thereupon, the matter was taken up and considered by the Commission, and in an order dated March 9, 1964, it found by a two-to-one vote of the Commission members that insofar as sales of electric energy for resale are concerned the Company is not an electric light company as defined in Section 4905.03, Revised Code, nor is it a public utility as defined in Section 4905.02, Revised Code, and, therefore, the Commission is without jurisdiction to regulate sales of electric energy for resale to third persons. However, the Commission did find incidentally that it was reasonable and proper for the Company to place the proposed new rule change in its Rules and Regulations on file with the Commission solely as an item of public notice and information.
An appeal from the Commission's order denying jurisdiction was perfected to this court, and, as we view the matter, the sole question now here for decision is whether such order of denial is unreasonable or unlawful.
Messrs. Metzenbaum, Gaines, Schwartz, Krupansky, Finley Stern and Mr. Robert B. Krupansky, for appellants.
Mr. William B. Saxbe, attorney general, and Mr. Theodore K. High, for appellee Public Utilities Commission.
Mr. Lee C. Howley, Mr. Donald H. Hauser, Mr. Harry G. Fitzgerald, Jr., Messrs. Squire, Sanders Dempsey, Mr. John P. Lansdale, Jr. and Mr. Alan P. Buchmann, for appellee Cleveland Electric Illuminating Company.
Public utilities generally, empowered by law to exercise the right of eminent domain and not infrequently comprising monopolies which furnish services, products, or both, to the public, such products often consisting of electric energy, are subject to supervision, regulation and control by governmental agencies established for such purpose, which agencies function, inter alia, to protect those served by the utilities with respect to the fairness of rates charged and adequacy of service and against discriminatory practices.
The Cleveland Electric Illuminating Company is a public utility which, among other things, supplies its customers with electric energy. Included among those institutions receiving electric energy are office buildings, apartment houses and shopping centers.
It would seem apparent that formerly under sanction of the Public Utilities Commission of Ohio the Company supplied various businesses and establishments with electric energy at a fixed point and for some time permitted these businesses and establishments to resell by submetering a part of such electric energy to lessees, tenants and to others with whom they had business relationships. There were advantages to the Company in so doing. It thereby escaped the expense of installing and maintaining equipment to extend its operations. These businesses and establishments used a part of the electric energy supplied by the Company in the conduct of their own activities.
Section 4905.03, Revised Code, is devoted to definitions of those organizations which constitute public utilities, and paragraph (A), subdivision (4) of that section includes, "An electric light company, when engaged in the business of supplying electricity for light, heat, or power purposes to consumers within this state * * *."
In the public interest it is desirable that the operations of an Ohio public Utility come within the jurisdiction of the Public Utilities Commission of Ohio, and in line with such thesis we see no good reason why office buildings, apartment houses and shopping centers, which use electric energy in their own operations, cannot fairly be classed as "consumers" within paragraph (A), subdivision (4) of Section 4905.03, Revised Code, even though by submetering these institutions resell a part of such electric energy to others connected with them in a business way.
The Shopping Centers Association of Northern Ohio and its individual members, themselves consumers of electric energy furnished by the Cleveland Electric Illuminating Company, were affected and disturbed by the proposed new regulation referred to in the statement of facts, and they were permitted to intervene in the proceeding. They claim that, if the regulation is put into force, it will result in discrimination against them in favor of others in the same general class.
In similar situations it has been held that governmental agencies, such as the Public Utilities Commission of Ohio, do have jurisdiction and should assume and exercise such jurisdiction. 18 American Jurisprudence 424, Section 23; North Carolina Public Service Co. v. Southern Power Co., 179 N.C. 18, 101 S.E. 593, 12 A.L.R. 304; North Carolina Public Service Co. v. Southern Power Co. (C.C.A. 4), 282 F. 837, 33 A.L.R. 626.
As we view the matter, the Public Utilities Commission of Ohio does have jurisdiction in this matter and should assume and exercise it in accordance with Section 4905.04 et seq., Revised Code.
It seems to us that here an entirely different situation prevails than was present in the cases of Ohio Mining Co. v. Public Utilities Commission, 106 Ohio St. 138, 140 N.E. 143, and Southern Ohio Power Co. v. Public Utilities Commission, 110 Ohio St. 246, 143 N.E. 700, 34 A.L.R. 171.
In relation to the Shopping Centers Association and its individual members, the Cleveland Electric Illuminating Company remains a public utility subject to the supervision, regulation and control of the Commission.
The order of the Commission refusing jurisdiction is unreasonable and unlawful. It is reversed, and the proceeding is returned to the Commission for action in conformity with this opinion.
Order reversed.
TAFT, C.J., MATTHIAS, O'NEILL, HERBERT, SCHNEIDER and BROWN, JJ., concur.