In re Application of Ormet Primary Aluminum Corp.
Annotate this CaseThe Ohio Public Utilities Commission (PUC) approved “reasonable arrangements” between American Electric Power Company (AEP) and two manufacturing firms, Ormet Primary Aluminum (Ormet) and Eramet Marietta, Inc. (Eramet). The arrangements gave substantial price discounts on electric service. The PUC approved the arrangements and allowed AEP to collect from other customers most of the revenue foregone to the discounts. Ormet asked the commission to approve an arrangement linking Ormet’s electric rate to the market price of aluminum; Eramet asked for a fixed discounted rate. The PUC held public hearings to consider the manufacturers’ applications, and numerous parties intervened, including Industrial Energy Users-Ohio (IEU). Disagreements regarding both applications centered on the amount of the discount and who should pay for it. The PUC issued orders permitting discounted rates to the manufacturers, but the PUC’s plan was not exactly what AEP had proposed. AEP appealed the PUC’s decision, arguing that the discounts do not allow the power company to recoup its losses from the plan discounts. The Supreme Court found that state law “affirmatively gives the commission—not the utilities—final say over arrangements” like the ones decided for Ormet and Eramet. The Court affirmed the PUC’s decisions regarding the manufacturing companies’ arrangements.
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