PUCO Forfeiture and Restitution Orders Must Be Explained and Internally Clear Under R.C. 4903.09

Commentary on In re RPA Energy, Inc., Slip Opinion No. 2026-Ohio-563 (Supreme Court of Ohio, Feb. 24, 2026)

Introduction

This appeal arose from an enforcement investigation by the Public Utilities Commission of Ohio (“PUCO” or “commission”) into RPA Energy, Inc., d.b.a. Green Choice Energy (“RPA”), a certified competitive retail electric-service (“CRES”) and competitive retail natural-gas-service (“CRNGS”) provider. After receiving consumer complaints and additional information, staff alleged that RPA and its vendors engaged in unlawful door-to-door solicitation and telemarketing practices—e.g., spoofing numbers, altering call recordings, and soliciting during COVID-19 restrictions—alongside other rule violations.

Following a hearing, PUCO (1) rescinded RPA’s Ohio operating certificates, (2) imposed a $1.44 million forfeiture, and (3) ordered “rerating” and restitution for certain consumers. RPA appealed, asserting due-process violations, lack of evidentiary support, inadequate articulation of findings, and unlawfulness of remedies. The Office of the Ohio Consumers’ Counsel (“OCC”) intervened as an appellee.

The Supreme Court of Ohio affirmed the certificate rescission, but reversed and remanded the forfeiture and consumer-rerating portions, emphasizing that PUCO must both (a) explain the evidentiary basis for monetary penalties with sufficient detail under R.C. 4903.09 and (b) issue internally coherent directives identifying which consumers are entitled to rerating.

Summary of the Opinion

  • Due process: PUCO provided “reasonable notice and opportunity for hearing” before rescinding certificates under R.C. 4928.08(D) and 4929.20(C)(1); RPA’s challenges to discovery and OCC intervention failed (some forfeited).
  • Merits: The Court largely upheld PUCO’s findings of unfair, deceptive, or unconscionable practices (e.g., misrepresenting savings, spoofing, altered TPV recordings, improper contract signatures), and upheld managerial-capability findings (COVID solicitation notice failures; recordkeeping/production failures). One narrow TPV “agent present” finding lacked record support.
  • Remedies:
    • Affirmed: rescission of RPA’s CRES and CRNGS certificates.
    • Reversed/Remanded: forfeiture, because PUCO did not adequately explain how it computed the $1.44 million penalty or identify the violations underpinning that number, violating R.C. 4903.09.
    • Reversed/Remanded: rerating, not for lack of authority, but because PUCO’s order listed contradictory rerating periods and did not clearly identify the affected consumer groups.

Analysis

Precedents Cited

1) Appellate review framework for PUCO orders

  • Constellation NewEnergy, Inc. v. Pub. Util. Comm., 2004-Ohio-6767: cited for the R.C. 4903.13 standard—PUCO orders are reversed only if “unlawful or unreasonable.” The Court used this as the gateway standard separating legal error from evidentiary insufficiency.
  • AT&T Communications of Ohio, Inc. v. Pub. Util. Comm., 51 Ohio St.3d 150 (1990): cited for the proposition that the appellant bears the burden to show unlawfulness or unreasonableness. This allocation mattered most where RPA challenged broad factual findings and remedy choices.
  • In re Application of Firelands Wind, L.L.C., 2023-Ohio-2555, and In re Application of Alamo Solar I, L.L.C., 2023-Ohio-3778: used to distinguish de novo review of legal questions (“unlawful”) from deferential review of evidentiary/consistency issues (“unreasonable”), and to define “unreasonable” to include internal inconsistency.
  • In re Complaints of Lycourt-Donovan v. Columbia Gas of Ohio, Inc., 2017-Ohio-7566, and Columbus v. Pub. Util. Comm., 58 Ohio St.2d 103 (1979): invoked to reaffirm that the Court does not reweigh evidence and will defer to PUCO factfinding if supported by sufficient probative evidence. This deference largely preserved the certificate-rescission predicate findings.
  • Monongahela Power Co. v. Pub. Util. Comm., 2004-Ohio-6869: cited for the “sufficient probative evidence” threshold and manifest-weight framing in PUCO appeals.

2) Notice/due process in certification enforcement

  • In re Application of Black Fork Wind Energy, L.L.C., 2013-Ohio-5478: critical to the Court’s forfeiture/waiver analysis—issues not timely raised below are forfeited because they deprive PUCO of the chance to cure. This case underwrote rejection of RPA’s discovery-related due-process arguments (raised too late and not pursued through actual discovery requests).
  • PUCO administrative decisions In re Verde Energy, PUCO No. 19-958-GE-COI, 2020 Ohio PUC LEXIS 910, and In re PALMco Power, PUCO No. 19-957-GE-COI, 2020 Ohio PUC LEXIS 1032: RPA relied on them to argue that staff had to map each consumer to each specific rule violation. The Court distinguished the premise, emphasizing that R.C. 4928.08(D) and 4929.20(C)(1) require “reasonable notice,” not granular pleading at the level RPA demanded.

3) OCC intervention and consumer-representation authority

  • Ohio Consumers' Counsel v. Pub. Util. Comm., 2006-Ohio-5853: cited for the abuse-of-discretion standard in permissive-intervention decisions and the policy that intervention should be liberally allowed so PUCO can consider all persons with a real and substantial interest.
  • Tongren v. D&L Gas Mktg., Ltd., 2002-Ohio-5006 (10th Dist.): RPA used it to claim OCC lacked statutory footing in CRES/CRNGS matters; the Court treated the case as outdated on jurisdictional scope, explaining that the legislature later granted commission jurisdiction over marketers and gave OCC authority in those proceedings (R.C. 4929.24(C) and R.C. 4928.16(C)).

4) Marketing misrepresentations, parol evidence, and contract integration

  • Williams v. Spitzer Autoworld Canton, L.L.C., 2009-Ohio-3554, and Ed Schory & Sons, Inc. v. Soc. Natl. Bank, 1996-Ohio-194: RPA invoked these to argue oral misrepresentations cannot support violations because the written contract contained non-savings disclaimers. The Court rejected the analogy: PUCO’s rules regulated deceptive marketing conduct, not failure to integrate oral promises into contracts. Thus, the parol-evidence rule did not immunize deceptive sales statements from regulatory consequences.
  • Corsale v. Sperian Energy Corp., 412 F.Supp.3d 556 (W.D.Pa. 2019): cited in RPA’s “competitive rates” puffery argument. The Court declined to reach it because PUCO did not actually find a violation based on “competitive” advertising language.

5) Administrative rules versus statutes; advice of counsel

  • State ex rel. Celebrezze v. Natl. Lime & Stone Co., 1994-Ohio-486: used for the general proposition that administrative rules have the force of law unless unreasonable or in conflict with statutes. The Court, however, disposed of RPA’s discovery-based conflict claim primarily on forfeiture grounds, not on the merits of statutory conflict.
  • State v. Yahya, 2011-Ohio-6090 (10th Dist.): cited by RPA for “reliance on counsel” in a criminal plea context. The Court found it inapposite and rejected any notion that advice of counsel shields regulated entities from compliance obligations in administrative enforcement.

6) R.C. 4903.09 explanation requirement (the opinion’s central doctrinal lever)

  • In re Application of FirstEnergy Advisors for Certification as a Competitive Retail Elec. Serv. Power Broker & Aggregator, 2021-Ohio-3630: cited for the functional purpose of R.C. 4903.09—review is impossible without enough information to know how PUCO reached its result. This rationale directly supported reversal of the forfeiture.
  • Gen. Tel. Co. v. Pub. Util. Comm., 30 Ohio St.2d 271 (1972): provided the controlling remedial rule: if PUCO’s order lacks sufficient detail to permit appellate review of its reasoning, the order “will be set aside.” The Court applied this principle to the forfeiture computation.
  • Ohio Consumers' Counsel v. Pub. Util. Comm., 2006-Ohio-5789: used as the model remand instruction—PUCO must “thoroughly explain” its conclusion and “identify the evidence” supporting findings. The Court imported that directive into this case for the forfeiture amount.

7) Jurisdictional note on appeal while rehearing pending

  • In re Application of Moraine Wind, L.L.C., 2024-Ohio-3224: cited as the authority for denying the motion to dismiss RPA’s appeal despite PUCO’s limited grant of rehearing. While not central to the merits, it reflects the Court’s approach to finality and appellate jurisdiction in PUCO practice.

Legal Reasoning

1) “Reasonable notice” is practical, not hyper-technical

The Court read R.C. 4928.08(D) and 4929.20(C)(1) as requiring notice sufficient to understand the allegations and prepare a defense, not a complaint-by-complaint, consumer-by-consumer pleading matrix. The staff notice and report here listed alleged rule/statutory provisions, identified representative complaints and calls, and provided extensive supporting documentation. Even if later evidentiary tools (like the spreadsheet) were hard to interpret in the final order, the Court treated that as a merits/explanation problem for the forfeiture—not a notice defect—because the spreadsheet was provided pre-hearing and could have been probed by cross-examination.

2) Deference to PUCO factfinding—except where the record is missing

Most factual findings survived because the record contained sufficient probative evidence and the Court refused to reweigh credibility. But the Court set aside one specific TPV “agent present” violation: PUCO referenced a TPV recording as proof, yet the recording was not in the appellate record, and the remaining evidence did not support the finding. This illustrates the Court’s boundary: it defers, but it will not uphold a finding that depends on evidence that is not actually available for review.

3) The core holding: R.C. 4903.09 requires traceable penalty math and identified predicates

The forfeiture reversal turned on a classic reviewability failure. PUCO suggested it relied on “over 150 violations,” implicitly multiplied by the $10,000-per-violation-per-day maximum in R.C. 4905.54, then reduced $60,000 for a category of non-violations—arriving at $1.44 million. Yet PUCO did not identify which violations it counted, how it counted them (or whether it used “per day”), how the spreadsheet translated into the number “150,” or how it derived the “six violations” corresponding to the $60,000 reduction.

Because the order did not “set forth in its order its reasons in sufficient detail” to permit the Court to determine how the result was reached (the Gen. Tel. Co. v. Pub. Util. Comm. principle), the forfeiture was unlawful under R.C. 4903.09 and had to be reversed and remanded for a thorough evidentiary explanation.

4) Restitution power exists, but PUCO must say precisely who and when

On rerating, the Court made two important legal clarifications:

  • PUCO may order consumer relief beyond complainants. The Court read R.C. 4928.16 and 4929.24 to allow PUCO-initiated complaints and remedies not limited to consumers who individually filed complaints.
  • “Or” does not necessarily mean “either/or” in this remedial setting. Rejecting RPA’s textual argument, the Court relied on R.C. 1.02(F) and the “may do any of the following” structure to hold PUCO can order both rescission and restitution to make consumers whole.

Nevertheless, PUCO’s rerating directive was reversed and remanded because it was internally inconsistent about the covered periods (e.g., “January 1, 2021 and July 20, 2021” versus “January 2021 to July 2021,” plus additional time windows and a February 2022 complaint-based trigger). The defect was not power, but clarity—an “internally inconsistent” order is “unreasonable” under the Court’s review framework.

Impact

  • Stricter discipline on PUCO penalty explanations: Even when PUCO’s enforcement posture is substantively justified, large forfeitures must be explained in a way that an appellate court can audit—identifying counted violations, linking evidence to counts, and showing the computation. Reliance on opaque internal tools (like unlabeled spreadsheets) is a litigation risk.
  • Remedial authority confirmed but operationalized through precision: The Court validated PUCO’s ability to order broad-based rerating/rescission and restitution, including for non-complainants. But PUCO must precisely define the affected consumer set and time period(s) to avoid remand.
  • Compliance expectations extend to vendor conduct and records: The Court treated vendor activity as the provider’s compliance responsibility. Providers using third-party marketers should expect PUCO and courts to require robust oversight, record retention, and rapid production capability.
  • Due-process challenges require preservation: The decision reinforces that regulated parties must timely raise procedural objections and build a record, or they risk forfeiture under In re Application of Black Fork Wind Energy, L.L.C..

Complex Concepts Simplified

  • CRES / CRNGS: Companies that sell electricity or natural gas supply competitively; the local utility still delivers the commodity over its wires/pipes.
  • Certification / managerial capability: PUCO’s license and fitness determination—providers must show they can manage operations, comply with rules, and handle customer interactions responsibly.
  • TPV (third-party verification): A required independent confirmation call/recording meant to ensure the customer knowingly agreed to enroll.
  • Spoofing: Making caller ID display a different number to influence whether a consumer answers or trusts the caller; PUCO treated it as misleading when it suggested affiliation with another entity (e.g., a utility).
  • Rerating: As the parties used it, cancelling affected contracts and refunding the difference between what the customer paid and what the default utility would have charged.
  • R.C. 4903.09 “findings and reasons” requirement: PUCO must write decisions that show what it found, why it found it, and how the evidence supports the outcome—especially important for penalties, where the “math” must be reviewable.
  • Unlawful vs. unreasonable (PUCO appeals): “Unlawful” usually means legal error (wrong statute interpretation or procedure); “unreasonable” includes lack of evidentiary support or internal inconsistency.

Conclusion

In re RPA Energy, Inc. delivers a dual message. Substantively, the Court endorsed PUCO’s aggressive consumer-protection enforcement: pervasive deceptive marketing, spoofing, altered verification recordings, and inadequate managerial control can justify revoking CRES/CRNGS certificates. Procedurally and institutionally, however, the Court insisted that PUCO’s remedial orders—especially forfeitures—must be written so the judiciary can meaningfully review them under R.C. 4903.09, and consumer-rerating directives must clearly and consistently identify the covered consumers and periods.

Key takeaway: PUCO may impose severe sanctions for unfair or deceptive supplier practices, but it must “show its work” in the order—both the evidentiary predicates and the computational steps—and it must issue remedies that are operationally unambiguous.