Update: The PUCO granted DP&L’s motion to withdraw its ESP 2 on the theory that the Supreme Court of Ohio’s ruling from June 2016 reversed the PUCO’s modification and approval of DP&L’s ESP 2 in its entirety. OMA Energy Group, Kroger, OCC, IEU-Ohio, OEG, and others argued that the Court’s decision was limited solely to reversing the PUCO’s approval of DP&L’s Service Stability Rider (SSR). These opponents further argued that Ohio law barred DP&L from withdrawing its ESP 2 because it was the effect of the Court’s June 2016 decision, not the PUCO’s modifications and approval of ESP 2, that motivated DP&L’s request to withdraw its ESP 2. The PUCO rejected that argument, stating that the Court’s reversal results in a required PUCO modification. Under the PUCO’s flawed logic, a utility would appear to have an everlasting right to terminate an ESP even if, in DP&L’s case, the utility had been operating under and collecting charges from an ESP for almost three years. Even though DP&L has been operating and collecting these charges for almost three years, Commissioner Johnson issued a concurring opinion, opining that DP&L had the right to withdraw its ESP 2 ever since it was originally modified and approved back in 2013. Commissioners Haque and Petricoff recused themselves from the decision due to their prior involvement in the case.

In light of its decision to permit DP&L to withdraw its ESP 2, the PUCO granted DP&L’s motion to implement provisions from its ESP 1 in part. Even though DP&L was not providing generation service through competitive auctions under its ESP 1, the PUCO permitted DP&L to revert back to its ESP 1 but continue the competitive auction process because Ohio law permits the PUCO to make adjustments for “fuel costs” when a utility elects to terminate a current ESP and revert back to a prior ESP. In the PUCO’s view, reverting back to ESP 1 but continuing the competitive auction process was consistent with Ohio law because “fuel costs” are equivalent to “purchased power” obtained through the auctions. The PUCO directed that the bypassable Environmental Investment Rider (EIR) be set at zero because the environmental controls that the EIR originally accounted for under ESP 1 are no longer used and useful to customers. Parties argued that DP&L should not be permitted to resurrect its Rate Stabilization Charge (RSC) under ESP 1, which was originally designed to account for DP&L’s provider of last resort (POLR) status, because DP&L is no longer providing POLR service in view of the competitive auction process. However, the PUCO reasoned that DP&L maintains a long-term obligation to provide POLR service because there are no competitive auctions scheduled after May 31, 2017. The PUCO also encouraged mercantile customers to work with Staff to opt-out of certain transmission charges in an apparent move to create a transmission opt-out program similar to the one FirstEnergy and AEP included in recent PPA settlements. Commissioner Petricoff recused himself from the decision due to his prior involvement in the case.