Sunday Nov 27, 2022

Cleveland Solar Power Selling OK’d if Properly Acquired – Court News Ohio


Cleveland Public Power (CPP) can sell electricity generated from a suburban solar farm, but only if it can prove that it did not purchase the power solely to sell it outside of the city limits, the Ohio Supreme Court ruled today.

A divided Supreme Court rejected arguments from Cleveland Electric Illuminating Company (CEI) that the municipal power company was creating an “artificial surplus” of electricity for the sole purpose of selling the power outside of Cleveland at a discounted rate.

In the Court’s lead opinion, Justice Melody J. Stewart wrote that under the Ohio Constitution, a municipal utility cannot acquire surplus product for the sole purpose of selling it outside of its boundaries, but may acquire excess capacity for other purposes, such as lowering costs, and then sell the excess product.

The decision affirmed an Eighth District Appeals Court decision, which ruled that CPP did not have to purchase only the exact amount of power it needs to serve territorial customers. The Supreme Court upheld the Eighth District’s determination that CPP has not yet demonstrated that its purchase of power from a solar array built over a former municipal landfill in Brooklyn, Ohio, is for any other purpose than selling it back to the city of Brooklyn.

The case was remanded to Cuyahoga County Common Pleas Court for further proceedings.

Chief Justice Maureen O’Connor joined Justice Stewart’s opinion. Justice Michael P. Donnelly concurred in judgment only without a written opinion.

In a decision partly concurring and partly dissenting with the lead opinion, Justice R. Patrick DeWine maintained that while the state constitution allows a municipality to sell up to 50 percent of its surplus outside of its boundaries, that provision only applies to products generated by the municipality. He wrote CPP does not have the right to buy power elsewhere and sell it outside of the city limits.

Justice Patrick F. Fischer joined Justice DeWine’s opinion.

In separate dissenting opinions, Justices Sharon L. Kennedy and Jennifer Brunner concluded that the case did not need to return to the trial court and that CPP had the right to sell the power.

Justice Kennedy wrote that the plain language of Article XVIII, Section 6 of the constitution gives CPP the right to sell up to 50 percent of its surplus power outside of its boundaries. The parties agreed that CPP is not selling more than 4 percent of its electricity outside of the city and the sale is expressly authorized by the constitution.

Justice Brunner maintained the lead opinion points to no facts that indicate CPP bought the solar-powered electricity solely to sell to Brooklyn, and there is no need for additional fact-finding to determine that the city is within its rights to sell the power.

Competition for Customers Sparked Dispute
CEI, a subsidiary of FirstEnergy Corp., provides electricity transmission and distribution to the northeast Ohio region. As an investor-owned utility company, CEI is regulated by the Public Utilities Commission of Ohio (PUC0). CPP is owned by the city of Cleveland and is authorized to operate under the city’s charter and Article XVIII, Section 4, of the Ohio Constitution.

Under Ohio’s deregulated electricity generation market, both CPP and CEI purchase the electricity they sell to customers through the wholesale electricity market. PJM Interconnection is the organization that runs the wholesale electricity market in Ohio and other midwestern and eastern states. The companies can buy power through PJM to meet expected customer demand.</…….


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