Ohio Utility Watch: ‘Power corrupts’ and regulatory cases continue

Welcome to Ohio Utility Watch, a periodic newsletter tracking developments in Ohio’s ongoing public-corruption saga, often referred to as the House Bill 6 scandal. Sign up for the newsletter.

It’s over. Well, partly.

As of today, customers of regulated utilities in Ohio will no longer pay subsidies for two old coal plants — but the saga of the coal and nuclear bailout law at the heart of Ohio’s largest public-corruption scandal continues.

Six years ago, FirstEnergy and others used dark money — funds given to groups whose ultimate source for political spending can’t be publicly traced — to route roughly $60 million in bribes to public officials and alleged coconspirators in exchange for their help passing and protecting House Bill 6. That legislation mandated the coal plant subsidies plus more than $1 billion in ratepayer charges for two nuclear power plants. Ohio lawmakers repealed the nuclear subsidies back in 2021.

Here are new developments from the last two months:

Power corrupts

While the FirstEnergy case involves massive amounts of money, utility corruption isn’t unique to Ohio, said author Richard Munson, former director of Midwest clean energy for the Environmental Defense Fund. Besides undermining democracy and raising electric bills, corruption interferes with competitive markets, he told Canary Media.

Basically, bailouts for fossil fuels and nuclear power impose a disadvantage on cheaper, clean sources like wind and solar. ​“If the outmoded is being subsidized, that innovation will not be able to advance,” Munson said.

For now, it’s unclear whether Ohio’s Public Utilities Commission, or PUCO, will impose meaningful consequences on FirstEnergy’s utilities for alleged regulatory violations. Also in doubt is what will happen with the commission’s reviews of charges already paid by customers for the coal plants, which managers often ran even when doing so increased the facilities’ financial losses.

“Ohio PUCO unfortunately appears to be an example of what were supposed to be guard dogs becoming lap dogs,” Munson said. 

Read more:

House Bill 15, passed in May, ends HB 6’s ratepayer subsidies to two 1950s-era coal plants as of today, Aug. 14. Customers of AEP Ohio, Duke Energy Ohio, AES Ohio, and FirstEnergy’s three Ohio utilities have already paid more than half a billion dollars since HB 6’s subsidies began in January 2020, according to the Office of the Ohio Consumers’ Counsel.

Regulatory cases and an Ohio Supreme Court case continue. Among the issues is whether the PUCO improperly pressured an independent auditor to tone down conclusions about the plants’ decision to run even when it was clear they would lose money.

Another half billion dollars or more in potential penalties is at stake in three of the PUCO’s four HB 6 cases, in which briefing wrapped up Aug. 4. FirstEnergy’s utilities claim they should pay far less.

One case asks whether the utilities violated an Ohio law requiring the separation of regulated utilities and their unregulated affiliates that produce electricity. The other two deal with alleged improper spending of money collected for two bill riders, which are extra charges that can only be used for specified purposes.