Ohio Revised Code Section 4928.14 requires Ohio electric utilities to provide consumers with a standard service offer consisting of either a market-rate offer (MRO) or an electric security plan (ESP). Pursuant to Ohio Revised Code Sections 4928.142(D)(4) and 4928.143(E) and (F), the Commission is required to evaluate the earnings of each electric utility’s approved ESP or MRO to determine whether the plan or offer produces significantly excessive earnings for the electric utility.
The Commission's staff has scheduled a workshop to develop a Significantly Excessive Earnings Test for Electric Utilities, pursuant to the Commission's entry in Case No. 09-786-EL-UNC, for:
Workshop Topics for Discussion (download this list):
1. Should off-system sales be included in the significantly excessive earnings test (SEET) calculation?
2. Should the Commission determine SEET on a single entity basis or company-wide basis?
3. What adjustments should be included in the SEET calculation?
4. What is the precise accounting definition of “earned return on common equity” that should be used?
5. What is the definition of “significantly in excess of the return on common equity”?
6. How should companies “that face comparable business and financial risk” be determined?
7. How are “significantly excessive earnings” to be determined? (Located in the third sentence of Section 4928.143(F), Revised Code.)
8. What does “in the aggregate” mean in relation to the adjustments resulting in significantly excess earnings?
9. How should the earnings of a comparable company be adjusted to compensate for the financial risk difference associated with the difference in capital structures?
10. What mechanism should be employed to refund to customers the amount of the excess earnings?
11. How should write-offs and deferrals be reflected in the return on equity calculation for SEET?
For further information, contact Jodi Bair, PUCO Utilities Department, at (614) 466-3705.