Update: This week, the Supreme Court of Ohio issued its decision regarding OMA and others’ appeal of the PUCO’s order authorizing Duke to recover $55.5 million from customers for cleanup costs associated with two former manufactured gas (MGP) plants that have not been in operation for 50-89 years. In a split 4:3 decision, the Court affirmed the PUCO’s order. In its decision, the majority held that under Ohio’s ratemaking statutes, operating expenses are recoverable if they were incurred in rendering service during the test period and are prudent. The Court further held that the “used and useful” standard does not apply to the ratemaking statute for “the cost to the utility of rendering the public utility service for the test period” under R.C. 4909.15(A)(4).

However, the three dissenting justices recognized that Duke sought recovery for remediation costs incurred in areas of the former MGP sites that are not currently used and useful for natural gas distribution service. According to the dissent, if the MGP sites, or portions thereof, are not used and useful for natural gas distribution service, then Duke cannot recover remediation costs in customer rates. The dissent explained that the PUCO’s order should be reversed in order for the PUCO to consider whether all, part, or none of the remediation costs were incurred to remediate the property that was used and useful in rendering public utility service during the test period.

For a more detailed summary of the PUCO’s decision, see this Summary of the Supreme Court of Ohio’s Decision in the Appeal of the Duke MGP Case prepared by Carpenter Lipps and Leland.