Discriminatory and unenforceable: Judge strikes down Dover Chemical electricity surcharge
NEW PHILADELPHIA ‒ Common Pleas Judge Elizabeth Lehigh Thomakos has ruled that a surcharge the city of Dover put on electricity it sold to Dover Chemical Corp. violates the Equal Protection Clause of the U.S. Constitution and is discriminatory and unenforceable.
In a decision issued Friday, Judge Thomakos also said that money from the surcharge, currently held in an escrow account, should be returned to Dover Chemical immediately. As of October, there was around $1.1 million in the account.
More on dispute: Judge hears arguments on Dover Chemical's request for sanctions against city of Dover
2021 ordinance established surcharge
Dover City Council passed an ordinance in 2021 that established a surcharge on any electricity the company used over 100,000 kilowatt hours per month. City officials alleged that the company had improperly received about $2.2 million in benefits and services from Dover's Electric Field Department, and the surcharge was designed to help Dover recoup that money. Dover Chemical denied that allegation and filed suit in 2021 to block the surcharge.
The company, located just outside of Dover, has since switched to AEP as its electric provider.
The judge's decision was a mixed bag for the contending sides.
Thomakos ruled that the ordinance was "discriminatory on its face," and did not apply equally to other Dover Light & Power customers outside city limits. But she dismissed a claim by Dover Chemical that the city violated the Ohio Constitution by purchasing more electricity that it needed for its residents so it could resell electricity to customers outside the city.
Reaction to ruling
Ryan McElduff, attorney for Dover Chemical, hailed the decision.
"For nearly four years, the city's leadership told one story to the public, while at the same time the city's employees testified that the story told by the elected leaders was not true," he said in a statement to The T-R. "Dover Chemical is pleased that the court has put to rest the city's 'unconstitutional' and 'discriminatory' political games.
"Notably, the court found that Dover Chemical paid a higher rate than many customers which entitled Dover Chemical to 'some additional maintenance and upkeep not received by other customers' who paid a lower rate ‒ something the city knew all along. Should any citizen of Dover wish to know more about how city leadership misled them, the records of the proceedings are public," he said.
Attorney Dolores Garcia, outside legal counsel for the city, said Dover has made no decision on whether it will appeal the ruling.
"The city was pleased that Judge Thomakos rejected Dover Chemical’s challenge to the city’s ability to provide service to extraterritorial customers," she said in an email to The T-R. "The city will continue to provide reliable, quality service to all its electric customers whether located within or outside the Dover City limits.
"Nevertheless, the city is disappointed that the ruling seeks to limit the city’s ability to set rates for extraterritorial customers beyond the limits that already exist in Ohio law. The city continues to believe that it acted properly and within all legal and constitutional constraints in passing the surcharge and is currently evaluating all legal options on how best to defend its proper exercise of legislative authority in the pending litigation and going forward."
In her decision, Judge Thomakos ruled that both sides will be responsible for their own legal fees. The City of Dover has spent more than $500,000 defending itself in the Dover Chemical lawsuit. She also ruled that court costs will be assessed to Dover Chemical and the city equally.
Reach Jon at 330-364-8415 or at jon.baker@timesreporter.com.
This article originally appeared on The Times-Reporter: Judge rules against city's surcharge on Dover Chemical electricity
