By John Stang
The Ohio government’s utility residential customers’ watchdog has requested that the state Public Utilities Commission investigate whether any ratepayers’ money was channeled to an alleged $60 million bribery scheme to preserve two nuclear power plants.
“The scope of that audit and investigation should include FirstEnergy’s corporate governance, its corporate relationships including its utility relationships with other FirstEnergy affiliated entities, and whether any money collected from consumers … was improperly used for any activities in connection with House Bill 6 (the bailout bill passed in 2019) instead of for electric utility service,” according to a motion filed Tuesday by the Office of the Ohio Consumers’ Counsel.
The consumer protection agency also called for the Public Utilities Commission – which regulates all utilities in Ohio — to hire an independent auditor to produce a public report of findings on FirstEnergy Corp. and recommendations for consumer protection.
The request also asks the PUC to look into a FirstEnergy special fee on ratepayers to modernize the corporation’s electric grid system — which was eliminated by the Ohio Supreme Court in 2019. However, the fee money was not refunded to ratepayers, even though not all of it has been used for the modernization work. The motion does not specify how much of the modernization money has not been spent.
The Public Utilities Commission did not respond to a query on the motion by deadline Friday for RadWaste Monitor. However, Cleveland.com quoted PUC spokesman Matt Schilling as saying other parties in the matter can respond to the OCC’s request before the commission makes its decision.
FirstEnergy Corp. declined to comment Thursday, but noted it will file a reply to the OCC’s request on Sept. 23. FirstEnergy and its officials have not been charged in this case.
On July 21, the FBI unsealed a criminal affidavit against then-Ohio House Speaker Larry Householder (R), three lobbyists, and another political operator in an alleged scheme to funnel and launder $60 million from “Company A” — universally acknowledged to be FirstEnergy — to advance legislative action to prevent planned closures by May 2021 of the financially troubled Davis-Besse and Perry nuclear power plants. The plants were owned by a bankrupt subsidiary, FirstEnergy Solutions, which has since become the stand-alone company Energy Harbor.
The money was allegedly used to support the elections of roughly 20 candidates in 2018 who became freshmen legislators in the Ohio House, who then successfully supported Householder becoming the House speaker. The FBI said the money was also used to pay bribes to Householder and the other four; to support the campaign for legislation passed last year to bail out the two plants; and to finance opposition to a proposed, ultimately failed. ballot initiative to repeal the rate hikes.
Householder allegedly oversaw writing of the legislation — House Bill 6 — that established a $150 million annual bailout for the Davis-Besse and Perry reactors. Another $74 million of bailout money is to go to subsidizing two FirstEnergy coal-fired power plants. The rate hikes established by the bill range from $0.85 per month for a home up to $2,400 per month for a large industrial business. All Ohio ratepayers must pay the rate hike, regardless of whether they are FirstEnergy Corp. customers. The increase goes into effect in 2021.
The Ohio House quickly removed Householder as speaker.
This is the latest in a number of legal actions and investigations that have erupted since late July.
There are at least eight class action lawsuits — five in federal court and three in county common pleas courts in Ohio — that seek unspecified amounts of damages because FirstEnergy and its top officers allegedly breached their fiduciary duties by pursuing the purported bribery scheme. The lawsuits alleged FirstEnergy actions led to rate increases and plummeting stock values.
Ohio Attorney General Dave Yost has ordered FirstEnergy to not destroy documents regarding House Bill 6 as it ponders whether to pursue legal action. The Ohio Elections Commission is studying the FBI’s criminal affidavit for potential campaign finance violations.
Meanwhile, Ohio Gov. Mike DeWine (R) and legislators have talked about repealing House Bill 6. Two bills to completely repeal the legislation are currently in the Ohio House Select Committee on Energy Policy and Oversight.
