PUCO case: FirstEnergy spending on HB 6 under scrutiny

The Public Utilities Commission of Ohio has set a May 21 deadline for interested parties to file comments regarding the response of FirstEnergy to the commission’s review of the company’s spending in support of House Bill 6 and opposition to a later referendum effort to repeal the bill.
The PUCO last year directed the company’s three distribution utilities, Toledo Edison, Ohio Edison and Cleveland Electric Illuminating, to show that any political or charitable spending by the companies regarding the bill weren’t included in any rates or fees paid by consumers.
The Ohio legislature passed House Bill 6 in 2019. The bill provided ratepayer funded subsidies for coal and nuclear power plants, drawing criticism from environmentalists as well as some business groups.
According to a justice department criminal complaint filed in July 2020, from March 2017 to March 2020, millions of dollars were paid in exchange for the assistance of then Speaker of the House, Larry Householder, and four associates, in passing HB 6 and then working to defeat a ballot initiative that could have rescinded the legislation.
In all, about $60 million was funneled through Generation Now, an entity formed as a 501(c)(4) organization, from an “energy company and its affiliates during the relevant period,” the complaint says.
First Energy Solutions filed for bankruptcy protection in federal court in 2018 when it claimed its coal and nuclear power plants could not compete against cheaper energy sources such as natural gas.
Utility executives turned to the legislature for financial assistance and in April 2019 HB 6 was introduced and then passed three months later. Without a ratepayer subsidy, the utilities argued, the power plants, including Davis-Besse and Perry, would be closed.
In the PUCO case, the commission has granted motions to intervene to the Ohio Hospital Association, Interstate Gas Supply, Industrial Energy Users-Ohio, Northwest Ohio Aggregation Coalition, Environmental Law & Policy Center, Natural Resources Defense Council, Ohio Environmental Council, Citizens’ Utility Board of Ohio, Ohio Consumers’ Counsel and Ohio Energy Group.
The Consumers’ Counsel has raised challenges to the scope of the investigation, saying it needs to be more extensive, and has filed motions requesting more records from FirstEnergy.
Legislation that repeals sections of HB 6, including the subsidies to the utilities, has since been approved by lawmakers.
The PUCO is also conducting an audit of FirstEnergy’s compliance with Ohio’s corporate separation regulations, which are in place to ensure no undue preference or competitive advantage is provided by an electric distribution utility to an affiliate.
The audit is examining the time period leading up to the passage of HB 6 and the subsequent referendum.
The PUCO has stated it believes information FirstEnergy Corp. has filed with the Securities and Exchange Commission requires that the PUCO “take additional action to ensure compliance by the FirstEnergy utilities and their affiliates with the corporate separation provisions” of state law.
A third-party audit of the company is scheduled to be filed in the case by June 21.