A class-action lawsuit was filed today in the Cuyahoga County Court of Common Pleas on behalf of more than 80,000 customers alleging that Cleveland Public Power illegally charged a hidden monthly fee on electric bills for environmental-compliance equipment that was never purchased. “CPP had no legal right to take this money from customers. It was billed under false pretenses and it was not used for the purpose it was intended,” said consumer-rights attorney Jack Landskroner of Landskroner Grieco Merriman, LLC. “We believe CPP has defrauded residents and businesses out of tens of millions of dollars.”
CPP’s authority to charge customers for electricity is created by city ordinance. The law allows CPP to charge an “Ecological and Environmental Adjustment,” but that money can only be used for “apparatus and equipment required for compliance with … environmental protection laws and directives.” If the money is not spent on this specific purpose, the assessment is illegal and must be refunded to consumers. According to the lawsuit, for more than a decade, CPP diverted the money into its general operating fund and spent it on whatever CPP officials wanted, regardless of whether it had anything to do with environmental compliance. Some examples from 2012 include snow removal, landscaping, printer cartridges, and garbage disposal.
The lawsuit further contends that CPP engaged in this scheme in order to increase its revenues and grow its budget without triggering the scrutiny of Cleveland City Council or Cleveland voters. Rather than seek rate hikes which may have been politically-unfeasible, CPP illegally supplemented it general operating fund with environmental adjustment funds.
“Plain and simple, this is fraud,” said Landskroner. “Not only did they tack on this illegal charge, they never disclosed it on customers’ monthly statements. So even the most diligent consumer would have no reason to question the charge.” The lawsuit alleges customers never saw an “Ecological and Environmental Adjustment” charge on their bills because CPP buried it in an unrelated charge called an “Energy Adjustment Charge,” which is supposed to cover fluctuations in the cost of energy.
The lawsuit names both CPP and the City of Cleveland as defendants, accusing them of negligence, fraud, breach of contract, and violation of Ohio’s consumer-protection laws. It seeks actual damages and interest for every member of the class and also asks the court to issue an injunction prohibiting the practice in the future. The lawsuit was brought by Tremont homeowner Clint Yoby, who has been a CPP customer since 2004.