Update: On October 22, 2013 Ormet filed a motion requesting that the Commission order AEP Ohio to continue service to Ormet throughout the remainder of Ormet’s bankruptcy proceedings. In its motion, Ormet explained that it has agreed to make pre-paid weekly payments to AEP Ohio at the applicable tariff rate, and that it has obtained approval from its lenders to make such payments. Ormet further requested for the Commission to clarify that any minimum demand charge applicable to Ormet will be calculated based on Ormet’s reduced usage. Ormet indicated that is unable to make the required payments under the terms of its Unique Arrangement, and is therefore concerned that AEP Ohio will disconnect it if the scheduled October 25, 2013 payment is missed.
Ormet claims in its Memorandum in Support that the power must necessarily remain on because there is an unaffiliated third-party (Hannibal Real Estate, Inc.) located on the former Ormet mill site. Ormet asserts that Hannibal Real Estate will also be disconnected if AEP Ohio disconnects Ormet’s service. Ormet also contends that AEP Ohio must not disconnect its services because Ormet maintains EPA remediation sites on its property. Ormet is presently undertaking remediation tasks such as in-situ flushing of soil, pumping of water, operation of a landfill, and operation of a sewage treatment plant. Ormet states that these operations will be shut down if their services are disconnected by AEP Ohio, thereby creating a risk to human health and the environment.
On October 24, 2013 AEP Ohio filed a memorandum in opposition to Ormet’s request for continued service, stating that it will defer disconnection to November 1, 2013, in order to give the Commission time to render a decision on Ormet’s motion. AEP contends that the Commission does not have authority to modify the required payments to AEP because Ormet’s payment of bills rendered by AEP Ohio on or before the applicable due date was a condition of Ormet’s Agreement in the Bankruptcy Court. AEP Ohio states that, at this point in time, the Bankruptcy Court is the only court with the authority to modify the agreement.
AEP Ohio further argues in its memorandum in opposition that if the Commission does not summarily deny Ormet’s motion, it should treat the motion as a new request for a unique arrangement. AEP Ohio states that the Commission’s modification of the previous agreement would result in the unlawful retroactive impairment of AEP Ohio’s contract rights, as the requested modification would violate multiple provisions of the existing contract.
AEP Ohio argues that Ormet’s stated concerns regarding disconnection of service to Hannibal Real Estate and the impairment of site remediation activities are unwarranted. AEP Ohio explained that can disconnect service to Ormet while maintaining service to Hannibal Real Estate so long as it is provided with access to the substation on Ormet’s premises. With regard to remediation activities, AEP Ohio contends that Ormet cannot use its obligations under a consent decree with USEPA to shield itself from lawful disconnection. AEP Ohio also notes that USEPA required Ormet to post a bond to cover situations such as the one it is currently facing.
AEP Ohio finally suggests in its memorandum in opposition that Ormet should proceed with its bankruptcy under Chapter 7 instead of Chapter 11 because it is administratively insolvent. AEP Ohio suggests that it could potentially treat the Chapter 7 Trustee as a new customer and place it on a tariff that matches the load the facility is currently using.
