Environmental group opposes codifying PUCO stipulation test in SB103

Karen Nordstrom, a clean energy attorney with the Ohio Environmental Council Action Fund, told the Senate Public Utilities Committee that a provision of Senate Bill 103 that would codify a three-pronged test for stipulations at the Public Utilities Commission of Ohio should be removed. "While SB103 is fundamentally about rate reform, the OAC Action Fund is here today to oppose the portion of section 4,903.3 which codifies a 3 pronged test for stipulations or settlements at the Public Utilities Commission of Ohio," she said.

Nordstrom read the three prongs aloud and said they are applied in ways that provide "little substantive analysis of the actual issues before the commission." She said the prongs require that a settlement be the product of serious bargaining among capable, knowledgeable parties; that, as a package, it benefit ratepayers and the public interest; and that it not violate any fundamental regulatory principle or practice. "The following 3 pronged test functionally operates to rubber stamp settlements between utilities, intervening parties and commission staff," she said.

Her central concern was that codifying the test would institutionalize a process that shifts the burden of proof onto parties opposing a stipulation. "This approach functionally shifts the burden of proof from the utilities to the parties opposing the stipulation to prove that the stipulation is unreasonable," she said, adding that confidentiality around stipulation discussions means opposing parties "have no functional methods of challenging whether the stipulation is a product of serious bargaining." Nordstrom said the commission often approves the second and third prongs "with little scrutiny," and that the PUCO has not provided guidance on which regulatory principles it finds persuasive.

During questioning, Senator Romichuk pressed Nordstrom on what counts as an "important regulatory principle or practice". Nordstrom pointed to PUCO precedent, citing energy conservation, aligning rates with cost causation and reasonable and fair rates for consumers as examples, and warned that codifying a vague standard without more direction would be unwise. When asked whether she had omitted the word "important" in her earlier remarks, Nordstrom replied that it was an oversight.

Chair Wilkin noted that written testimony was submitted by Tom Bullock of the Citizens Utility Board of Ohio. With no further in-person testimony the committee concluded the third hearing on SB103; Nordstrom said the organization would review the remainder of the legislation in the coming weeks.