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Are You Familiar With the New Electric Rate Case Procedures Underway in Ohio?
In a press release the Public Utility Commission of Ohio (PUCO) announces the new rate case procedures that electric utilities must follow.
This new process results from House Bill 15 that was signed by the Governor on May 15, 2025. Among other things, the new law changes the way the PUCO will handle aspects of utility rate cases.
The PUCO has opened dockets and held rulemaking workshops to gather input from stakeholders before implementing new agency rules and processes.
- Case 25-0695-AU-ORD: rate case timeline rules
- Case 25-815-AU-ORD: standard filing requirements rules
One of the first HB 15 changes is the establishment of standardized timeframes that will apply to all electric distribution utilities filing rate cases before PUCO.
The new timeline includes:
- 45 days for PUCO staff to determine whether the filing is complete and conforms with the standard filing requirements.
- 180 days from the completeness determination for the PUCO to issue a staff report, which analyzes the company’s application and gives a recommendation to the Commission.
- 360 days from completeness to the Commission’s final order
Altogether, the full process would span no more than 405 days.
Legislative changes resulting from HB 15 impact the PUCO’s own agency rules, including the standard filing requirements.
Planned updates to those rules include:
- Alignment with the new rate case timelines
- Expanded expert testimony and utility data
- Increased supporting information in initial filings
New methods
For electric distribution utilities (EDUs), the new process introduces a notable shift from traditional rate-setting practices.
To help set rates, utilities typically rely on a mix of actual and forecasted data which is known as a test year. Mid-year cost increases and anomalies (weather-related costs, for example) could then be adjusted across the time period, creating a “normal” operating year. The updated approach introduces the option of using a fully forecasted test period instead.
Traditional test year:
- Based on historical data and trend forecasts
- Could require adjustments to normalize expenses and revenues
- Could be accompanied by additional riders to account for costs outside the test year
Forecasted test period:
- Uses forward-looking financial projections for three consecutive years
- Typically requires fewer adjustments, since the data already reflects expected conditions
- Riders largely eliminated
Whether or not the utility uses the traditional or forecasted method, EDUs are now required to file a rate case every three years.
True-ups
Because forecast-based ratemaking relies on projected financial data, utilities using the new process will now incorporate true-up mechanisms.
These mechanisms allow utilities to reconcile differences between forecasted costs and actual results after the fact. If the forecast significantly over- or under-estimates expenses or revenues, the true-up process adjusts rates or revenues accordingly.
