Appeals Court Halts Unearned Transmission Profits for Ohio Electric Utilities

January 24, 2025 — COLUMBUS, OH — In a victory for Ohio consumers, the U.S. Court of Appeals has ruled against a controversial profit mechanism that allowed electric utilities like AEP Ohio and AES Ohio to collect inflated returns on their transmission infrastructure. The ruling is expected to save ratepayers hundreds of millions of dollars in unjustified charges.

The case was brought forward by the Ohio Consumers’ Counsel (OCC), who challenged the utilities’ ability to receive a “transmission adder”—a supplemental profit margin granted for participating in the PJM Regional Transmission Organization (RTO). The adder was originally designed as an incentive for utilities in other states to join PJM voluntarily.

But in Ohio, participation in PJM is not optional—state law mandates it. That distinction led the court to conclude that the transmission adder was not just unnecessary, but unlawful. Because Ohio utilities are already required to participate in PJM, the court agreed with the OCC’s argument that the adder served no legitimate purpose and only served to inflate monopoly profits at the expense of customers.

“This ruling sends a clear message: utility monopolies cannot game the system for profits that were never earned,” said a spokesperson from the OCC. “Ohioans deserve transparency and fairness in their energy bills. Hidden charges like these undermine trust and impose unfair costs on hardworking families and businesses.”

The case underscores a broader concern in energy policy—how opaque rate structures and regulatory complexity can allow millions of dollars to be quietly extracted from customers, with no improvement to service or reliability.

This decision is likely to influence other legal and regulatory challenges nationwide as states increasingly scrutinize utility profits and seek reforms to protect consumers from overreach in the energy market.