Thursday, November 16, 2000

Court against buying for outside customers




By Liz Sidoti
The Associated Press

        COLUMBUS — Municipalities cannot legally buy extra electricity from power companies simply to resell it to customers living outside of their residential boundaries, the Ohio Supreme Court ruled Wednesday.

        The court voted 6-1 that the practice violates two parts of the state's constitution. One part allows municipalities to buy electricity for their residents and the other gives city or village officials the right to sell limited amounts of surplus power to customers outside of their boundaries.

        American Municipal Power-Ohio Inc., the city of Bryan, the villages of Pioneer, Montpelier and Edgerton, and Chase Brass and Copper Co. had used those provisions to justify power purchase agreements with one another.

        Toledo Edison, which lost Chase Brass as a customer after the agreements were reached, challenged the arrangement as unconstitutional.

        “A municipality is prohibited from in effect engaging in the business of brokering electricity to entities outside the municipality in direct competition with public utilities,” Justice Evelyn Lundberg Stratton said in writing the court's majority opinion that sided with Toledo Edison.

        Appeals Judge Ronald E. Hadley, who heard the case in place of Justice Andrew Douglas, dissented.

        The case returns to trial court, which had dismissed Toledo Edison's claims.

        “We feel like we finally got our day in court and the court obviously agreed what these folks are doing was wrong in principal. Now we have the opportunity to go back and try to prove our case,” said Mary Ann Whipple, an attorney representing Toledo Edison.

        The four Williams County municipalities had agreed to buy electricity from AMP-Ohio and resell it to Chase Brass using a transmission line AMP-Ohio built in 1995. Shortly thereafter, Chase Brass, which is located outside the municipalities' boundaries, ended its 33-year relationship with Toledo Edison.

       



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