Ohio Code § 4905.302

§ 4905.302.

(A)(1) For the purpose of this section, the term “ purchased gas adjustment clause ” means: (a) A provision in a schedule of a gas company or natural gas company that requires or

allows the company to, without adherence to section 4909.18 or 4909.19 of the Revised Code , adjust the rates that it charges to its customers in accordance with any fluctuation

in the cost to the company of obtaining the gas that it sells, that has occurred since

the time any order has been issued by the public utilities commission establishing

rates for the company pertaining to those customers; (b) A provision in an ordinance adopted pursuant to section 743.26 or 4909.34 of the Revised Code or Section 4 of Article XVIII, Ohio Constitution , with respect to which a gas company or natural gas company is required or allowed

to adjust the rates it charges under such an ordinance in accordance with any fluctuation

in the cost to the company of obtaining the gas that it sells, that has occurred since

the time of the adoption of the ordinance. (2) For the purpose of this section, the term “ special purchase ” means any purchase of interstate natural gas, any purchase of liquefied natural

gas, and any purchase of synthetic natural gas from any source developed after the

effective date of this section, April 27, 1976, provided that this purchase be of

less than one hundred twenty days duration and the price for this purchase is not

regulated by the federal power commission.  For the purpose of this division, the expansion or enlargement of a synthetic natural

gas plant existing at such date shall be considered a source so developed. (3) For the purpose of this section, the term “ residential customer ” means urban, suburban, and rural patrons of gas companies and natural gas companies

insofar as their needs for gas are limited to their residence.  Such term includes those patrons whose rates have been set under an ordinance adopted

pursuant to sections 743.26 and 4909.34 of the Revised Code or Section 4 of Article XVIII, Ohio Constitution . (B) A purchased gas adjustment clause may not allow, and no such clause may be interpreted

to allow, a gas company or natural gas company that has obtained an order from the

public utilities commission permitting the company to curtail the service of any customer

or class of customers other than residential customers, such order being based on

the company's inability to secure a sufficient quantity of natural gas, to distribute

the cost of any special purchase made subsequent to the effective date of such order,

to the extent that such purchase decreases the level of curtailment of any such customer

or class of customers, to any class of customers of the company that was not curtailed,

to any class of residential customers of the company, or to any class of customers

of the company whose level of curtailment was not decreased and whose consumption

increased as a result of, or in connection with, the special purchase. (C)(1) The commission shall promulgate a purchased gas adjustment rule, consistent with

this section, that establishes a uniform purchased gas adjustment clause to be included

in the schedule of gas companies and natural gas companies subject to the jurisdiction

of the public utilities commission and that establishes investigative procedures and

proceedings including, but not limited to, periodic reports, audits, and hearings. (2) The commission shall not require that a management or performance audit pertaining

to the purchased gas adjustment clause of a gas or natural gas company, or a hearing

related to such an audit, be conducted more frequently than once every three years.  Any such management or performance audit and any such hearing shall be strictly

limited to the gas or natural gas company's gas or natural gas production and purchasing

policies.  No such management or performance audit and no such hearing shall extend in scope

beyond matters that are necessary to determine the following: (a) That the gas or natural gas company's purchasing policies are designed to meet the

company's service requirements; (b) That the gas or natural gas company's procurement planning is sufficient to reasonably

ensure reliable service at optimal prices and consistent with the company's long-term

strategic supply plan; (c) That the gas or natural gas company has reviewed existing and potential supply sources; (3) Unless otherwise ordered by the commission for good cause shown and except as provided

in division (D) of this section: (a) The commission's staff shall conduct any audit or other investigation of a natural

gas company having fifteen thousand or fewer customers in this state that may be required

under the purchased gas adjustment rule. (b) Except as provided in section 4905.10 of the Revised Code , the commission shall not impose upon such company any fee, expense, or cost of such

audit or other investigation or any related hearing under this section. (4) Unless otherwise ordered by the commission for good cause shown either by an interested

party or by the commission on its own motion, no natural gas company having fifteen

thousand or fewer customers in this state shall be subject under the purchased gas

adjustment rule to any audit or other investigation or any related hearing, other

than a financial audit or, as necessary, any hearing related to a financial audit. (5) In issuing an order under division (C)(3) or (4) of this section, the commission

shall file a written opinion setting forth the reasons showing good cause under such

division and the specific matters to be audited, investigated, or subjected to hearing.  Nothing in division (C)(3) or (4) of this section relieves such a natural gas company

from the duty to file such information as the commission may require under the rule

for the purpose of showing that a company has charged its customers accurately for

the cost of gas obtained. (D) A natural gas company that does not sell natural gas under a purchased gas adjustment

clause shall not be subject to this section. (E) Nothing in this section or any other provision of law shall be construed to mean

that the commission, in the event of any cost distribution allowed under this section,

may issue an order pursuant to which the prudent and reasonable cost of gas to a gas

company or natural gas company of any special purchase may not be recovered by the

company.  For the purpose of this division, such cost of gas neither includes any applicable

franchise taxes nor the ordinary losses of gas experienced by the company in the process

of transmission and distribution. (F) The commission shall not at any time prevent or restrain such costs as are distributable

under this section from being so distributed, unless the commission has reason to

believe that an arithmetic or accounting inaccuracy exists with respect to such a

distribution or that the company has not accurately represented the amount of the

cost of a special purchase, or has followed imprudent or unreasonable procurement

policies and practices, has made errors in the estimation of cubic feet sold, or has

employed such other practices, policies, or factors as the commission considers inappropriate. (G) The cost of natural gas under this section shall not include any cost recovered by

a natural gas company pursuant to section 4929.25 of the Revised Code .