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Ohio high court rules regulators cannot cap energy efficiency cost recovery

The Supreme Court of Ohio reversed a decision by state regulators to cap cost recovery for FirstEnergy Corp.'s energy efficiency and peak demand reduction program.

Ohio's highest court issued an order Oct. 15 to reverse the decision by the Public Utilities Commission of Ohio and remand the case back to regulators to approve the portfolio plans of FirstEnergy's Ohio utilities "without the cap on cost recovery."

The PUCO in late November 2017 approved the energy efficiency and peak demand reduction plans for Ohio Edison Co., Cleveland Electric Illuminating Co. and Toledo Edison Co. for 2017 through 2019. However, regulators implemented an annual cost cap of about $107 million on the recovery of program costs and shared savings.

The utilities and environmental groups sought rehearing of the case, but the PUCO denied the applications in a Jan. 10, 2018, order.

The Natural Resources Defense Council, one of the groups appealing the PUCO decision, applauded the Ohio Supreme Court's ruling.

"This decision could move Ohio's energy economy forward. It removes hurdles to programs that save money and create jobs," Daniel Sawmiller, Ohio energy policy director for the Natural Resources Defense Council, said in a statement. "As we've said all along, it's wrong to limit utility investments in energy efficiency programs that are essential for lowering carbon pollution and have created a thriving sector of Ohio's economy."