Taft attorneys Elizabeth Brama, Kodi Verhalen, and Ina Avalon recently successfully represented Duke Energy of Ohio in opposing a third party’s appeal of a Public Utilities Commission of Ohio (“Commission”) Order setting utility rates. The case and outcome reflect Taft’s continued strength in advising clients across the energy sector.

The Ohio Supreme Court unanimously upheld the Commission’s approval of a multi-party rate case settlement, which (among other terms), enabled Duke Energy Ohio to recover approximately $29 million in costs associated with retiring aging underground propane storage caverns used to serve customers.

Specifically, the Ohio Supreme Court deferred to the Commission and rejected the argument that the “used and useful” standard should control valuation standards for utility assets. In doing so, the court noted that expenses related to cavern retirement were necessary and current costs of doing business, as “utility companies will inevitably retire outdated facilities to ensure safe and reliable service.”

The case is significant because it reinforces a utility’s ability to recover certain costs associated with decommissioning outdated infrastructure when modernizing systems to support safe and reliable service. It also provides guidance on how Ohio may treat aging utility assets or retiring utility assets in future rate cases.

To read more about the case, see the Law360 coverage here.

The Taft Energy practice group has deep experience providing full-service legal representation to a broad range of public utilities, energy providers, transmission-only utilities, independent power producers, developers, regional entities, and other energy-sector participants. Taft’s lawyers are leaders in the field, and harness extensive experience to provide clients with unparalleled, practical legal advice in the energy and utilities arena.