The Cuyahoga County Court of Common Pleas dismissed a class action lawsuit against Cleveland Public Power (CPP), holding that certain utility charges totaling more than $188 million were not unlawful. The crux of the lawsuit was Environmental and Ecological Adjustment (EEA) charges that CCP charged customers in addition to base rates. Unlike base rates, EEA charges do not need approval from city council. The EEA charges were collected by CPP from 1984 into 2013. And although CPP stopped assessing these fees in 2013, it began charging customers again in 2017. The plaintiffs claimed that CPP was not allowed to charge the EEA charges under the terms of CPP’s electric service contract with its customers, because these charges did not relate to compliance with environmental laws or regulations.             

To examine the plaintiffs’ breach of contract claim, the court analyzed the City of Cleveland’s ordinances, which incorporate the terms of the electric service contract. After analyzing the ordinances establishing the EEA, the court rejected the plaintiffs’ arguments. The court found that the language of the ordinances (and, thus, the electric service contract) did not limit the scope of EEA charges to costs related to environmental laws or regulations.                                                        

The court’s decision is likely to be appealed, but it closes the first chapter in a contentious legal battle regarding CPP’s utility charges. The decision is also noteworthy due to the court’s in-depth analysis of the applicable standard of review for Ohio courts that are asked to consider the lawfulness of municipal utilities’ rates.

For more, read the full decision.

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