Subtle Nuances Involving Utilities

Subrogation against electric cooperatives

Electrical fires in homes can result in severe and often catastrophic damages. When the event is caused by the action or inaction of a public utility, it is not uncommon for the utility to raise a defense that the matter cannot be litigated in court, but must be filed in the Public Utilities Commission of Ohio (PUCO).  (The fact that this is not necessarily true will be the subject of a future article.) While public utilities provide the majority of electric power in the State of Ohio, twenty-five electric cooperatives provide power to more than 380,000 homes and businesses in 77 of Ohio’s 88 counties. Just like utilities, the actions of a cooperative employee can cause fires. Unlike claims against a public utility, claims against electric cooperatives can be pursued in court without having to fight over whether the PUCO has jurisdiction.

Subtle nuances involving utilities

A Public Utility is a creature of statute.  Ohio Revised Code 4905.02 defines a public utility as follows:

  • As used in this chapter, “public utility” includes every corporation, company, co-partnership, person, or association, the lessees, trustees, or receivers of the foregoing, defined in section 4905.03 of the Revised Code, including any public utility that operates its utility not for profit, except the following:
    • An electric light company that operates its utility not for profit;
    • A public utility, other than a telephone company, that is owned and operated exclusively by and solely for the utility’s customers, including any consumer or group of consumers purchasing, delivering, storing, or transporting, or seeking to purchase, deliver, store, or transport, natural gas exclusively by and solely for the consumer’s or consumers’ own intended use as the end-user or end-users and not for profit;
    • A public utility that is owned or operated by any municipal corporation;

Can a member sue the electric cooperative

An electric cooperative is a not-for-profit, member-owned utility service that provides service solely to its members.  As they are controlled by their members, electric cooperatives are not regulated by the PUCO.  Because they are not regulated by the PUCO, the PUCO has no jurisdiction over claims involving cooperative electric companies. An interesting question that may arise is whether a member can sue the cooperative since a member would almost seem to be suing itself? As with most situations involving contracts, it is best to review the actual documents. That said, in our experience, the answer is “yes”, a member can sue the cooperative.  In fact, Keis George has done so on several occasions. 

Subrogation attorneys

While this article deals specifically with Ohio utilities and cooperatives, many states have similar laws and power providers. This is just a reminder not to assume the utility providing the power is subject to the jurisdiction of your state public utility commission. Contact one of our subrogation attorneys to discuss the complex relationship between a public utility and your insured’s electric provider.