Regulators are requiring FirstEnergy to show that its Ohio utility ratepayers didn鈥檛 foot the bill, 鈥渄irectly or indirectly,鈥� for or spending in support of the state鈥檚 nuclear and coal bailout bill. Yet that is much more lenient than the state鈥檚 official consumer advocate had sought.
Questions about possible improprieties arose after former House Speaker Larry Householder (R-Glenford) was arrested on July 21. That case involves an alleged criminal conspiracy by him and others to pass last year and then to defend it against a citizens鈥� referendum. The federal and allege that the defendants received approximately $60 million from 鈥淐ompany A鈥� 鈥� apparently FirstEnergy 鈥� and its subsidiaries and affiliates.
bills are in the General Assembly. Meanwhile, on September 8, the Office of the Ohio Consumers鈥� Counsel asked the Public Utilities Commission of Ohio to require an of FirstEnergy鈥檚 political and charitable spending. Before FirstEnergy鈥檚 utilities filed any formal response, the PUCO opened a new case and issued its September 15 order.
The PUCO told FirstEnergy鈥檚 utilities 鈥渢o show cause, by September 30, 2020, demonstrating that the costs of any political or charitable spending in support of Am. Sub. H.B. 6, or the subsequent referendum effort, were not included, directly or indirectly, in any rates or charges paid by ratepayers in this state.鈥�
鈥淲e are reviewing the PUCO order and will respond by September 30 as required,鈥� said FirstEnergy spokesperson Jennifer Young. She added that the company was 鈥渘ot aware of the criminal allegations, affidavit or subpoenas before July 21,鈥� and that it is cooperating fully in the federal investigation.
A "Baby Step"
Critics aren鈥檛 willing to take FirstEnergy鈥檚 word for it that the company did nothing wrong.
鈥淥hioans deserve an open, transparent investigation and an audit by an independent, third party into the actions taken by FirstEnergy 鈥� not just a report from FirstEnergy itself to the PUCO,鈥� said Miranda Leppla, vice president of energy policy for the Ohio Environmental Council Action Fund. 鈥淥hioans have a right to know that state-approved monopolies, like our electric utilities, are not misusing dollars collected from Ohioans鈥� electric bills, and if they are, that the PUCO acts swiftly to crack down.鈥�
before an Ohio House committee considering repeal of HB 6, PUCO chair noted that stakeholders could weigh in. However, it鈥檚 not clear how much more will be done.
The PUCO鈥檚 order is 鈥渁 baby step towards the direction of what the Consumers鈥� Counsel is suggesting,鈥� but it鈥檚 certainly not the same, said former PUCO member Ashley Brown, who now heads the Harvard Electricity Policy Group. Ohio regulators have wide leeway in investigating utilities鈥� activities, he noted, and the order doesn鈥檛 foreclose additional inquiries beyond whatever FirstEnergy files in response.
According to FirstEnergy spokesperson Mark Durbin, 鈥渢here were no expenses for political activity and lobbying for the years 2017-2020 included in customers鈥� rates at CEI, Toledo Edison, and Ohio Edison.鈥�
However, the PUCO鈥檚 September 15 order calls for the company to show that there was neither direct nor indirect funding of political and charitable giving. Indirect funding could happen if the parent corporation got more than the allowable rate of return from its regulated utilities, Brown said.
Even if the rate of return looks OK on paper, one might ask if personnel at the parent and affiliates charged for time related to lobbying efforts, Brown said. Likewise, the utilities鈥� electric security plans include some for unregulated activities.
Additionally, from 2017 through mid-2019, FirstEnergy鈥檚 utilities collected roughly from ratepayers for a that wasn鈥檛 tied to any services for ratepayers. Critics have questioned with those funds. The Ohio Supreme Court subsequently held the charge unlawful but .
鈥淭o do this audit correctly, you can鈥檛 just look at the accounts鈥� from the utilities, Brown said. 鈥淵ou have to look at what鈥檚 behind the reporting鈥� It really requires a professional auditing firm that has financial skills and management skills and forensics skills.鈥�
And, he added, if improprieties show up, the bigger question is how the corporation and its directors and officers might have allowed them to happen.
For its part, the Office of the Ohio Consumers鈥� Counsel hopes the PUCO order is a beginning, rather than a last step for an investigation.
鈥淭he Ohio legislature has granted the PUCO considerable powers to investigate utilities for the protection of the public,鈥� said spokesperson J.P. Blackwood at the Office of the Ohio Consumers鈥� Counsel. 鈥淲e hope the PUCO will more fully use those powers to broaden its announced 鈥榬eview鈥� of FirstEnergy's alleged conduct in influencing the passage of House Bill 6.鈥�
As it stands, Ohio utilities are 鈥渢he only entities in the state of Ohio that are guaranteed a profit,鈥� said state Rep. David Leland (D-Columbus), who is co-sponsoring one of the HB6 bills. 鈥淚t鈥檚 the Public Utilities Commission of Ohio鈥檚 responsibility to get to the bottom of what kind of corruption actually occurred at FirstEnergy.鈥�
In his view, the fact that it took nearly two months for the PUCO to act after Householder was arrested was 鈥渁n abdication of their responsibilities.鈥�
鈥淚t鈥檚 not timely, and it鈥檚 not expansive enough,鈥� Leland said.
Aligned Interests?
The PUCO order could matter even more in light of a , showing that FirstEnergy鈥檚 Political Action Committee made $158,000 in campaign contributions just days before Householder鈥檚 July 21 arrest.
The report鈥檚 of donations, based on filings with the Ohio Secretary of State, showed $10,000 and $5,000 going to campaigns for HB 6 co-sponsors Jamie Callender and Shane Wilkin, respectively. Campaigns for Ohio Supreme Court justices Judith French and Sharon Kennedy each were shown as getting $7,000.
Amounts exceeding $3,400 were also shown as going to campaigns for House Majority Floor Leader (R-Cincinnati); House Majority Whip Jay Edwards (R-Nelsonville); House Minority Whip Paula Hicks-Hudson (D-Toledo); state Sen. (R-Chagrin Falls); state Rep. Terrence Upchurch (D-Cleveland); state Sen. Kirk Schuring (R-Canton); state Rep. Bill Reineke (R-Tiffin); state Rep. George Lang (R-West Chester); Senate Democratic Caucus Leader Kenny Yuko (D-Richmond Heights); and Ohio Senate candidate Jerry Cirino (R-Lake County.)
Several campaigns have said they did the money, raising yet more questions.
鈥淔irstEnergy鈥檚 Political Action Committee supports both Republican and Democrat candidates and officeholders whose interests align with those of our customers, employees and shareholders,鈥� Young said. 鈥淔irstEnergy鈥檚 PAC contributions are legal and reported consistent with established federal, state and legal requirements.鈥�
Cirino had testified in support of HB6 in his role as a current Lake County Commissioner. showed that drafts of that testimony had been arranged by a FirstEnergy Solutions consultant who had previously been FirstEnergy鈥檚 external affairs director. That person, Murphy Montler, is now deceased.
鈥淭he former employee was working as a consultant for FES,鈥� Young said. 鈥淚 can only speak for FirstEnergy Corp., and I am not familiar with the work referenced in the article.鈥�
鈥淓nergy Harbor does not have any comment at this time,鈥� said spokesperson Jason Copsey.
Energy Harbor is the successor to FirstEnergy鈥檚 former FirstEnergy Solutions subsidiary following the conclusion of its bankruptcy case in February 2020. The company is no longer considered an affiliate of FirstEnergy.
鈥淚 was acting as a county commissioner looking out for the economic health and employment situation in my county,鈥� Cirino said. 鈥淎t no time did I represent FirstEnergy and FirstEnergy Solutions鈥� Any implication that there was any financial interest on my part in supporting HB6 or whatever the solution might have been is absurd.鈥�
Cirino did not deny receiving the July donation from FirstEnergy, and he said that FirstEnergy Solutions had provided 鈥渢echnical鈥� supporting HB6.
鈥淲hen someone like Jerry Cirino has a documented history of simply taking marching orders from a large corporation and its lobbyists, no questions asked, we have to doubt whether he will ever ask the necessary hard questions,鈥� said Besty Rader, his rival in the race for the Ohio Senate.
Even after Householder鈥檚 arrest and revelation of the alleged racketeering scheme, Rader says 鈥淐irino took the political lead this August to support the flow of money鈥� . 鈥淭his sort of pay-to-play in Ohio politics has to end.鈥�
This article provided by , the nonprofit, nonpartisan Ohio Center for Journalism in partnership with the nonprofit . Please join our or the mailing list for as this helps us provide more public service reporting.
