Login | October 27, 2020

Watchdog seeks more scrutiny of utility's spending in scheme

This April 4, 2017, file photo shows the entrance to FirstEnergy Corp.'s Davis-Besse Nuclear Power Station in Oak Harbor, Ohio. A nuclear plant bailout law should be repealed immediately, Democratic members of the Ohio House announced Wednesday, July 22, 2020, as a bribery scandal involving one of the state’s most powerful lawmakers unfolded over the law’s passage. (AP Photo/Ron Schwane, File)

MARK GILLISPIE
Associated Press

Published: October 1, 2020

CLEVELAND (AP) — Ohio's consumer watchdog has asked the state's regulator for public utilities to increase its scrutiny of FirstEnergy Corp.'s spending in what federal authorities say was a $60 million bribery scheme to obtain a $1 billion bailout for two struggling nuclear power plants owned at the time by a corporate subsidiary.
In a motion filed last week, the Ohio Consumers' Counsel said a Public Utilities Commission of Ohio order doesn't go far enough. The commission has given FirstEnergy until Sept. 30 to show whether ratepayer money was used to fund the bribery scheme through charitable and political spending.
"The PUCO's limited review and its reliance on self-reporting by FirstEnergy are inadequate for consumer protection," Consumers' Counsel attorneys wrote.
The watchdog agency early last month asked PUCO to authorize an independent investigation and audit of FirstEnergy, surrounding its support of legislation that provided the bailout. A new, private group created by creditors of FirstEnergy Solutions, a subsidiary of the corporation which operated the nuclear plants, in bankruptcy court took ownership of the nuclear plants earlier this year.
PUCO spokesperson Matt Schilling said that other interested parties have five days to respond to the Consumers' Counsel's latest filing.
Federal authorities have accused FirstEnergy of spending $60 million to fund a scheme to get a powerful state politician elected House speaker, put him in position to push the bailout bill through the Legislature, and then thwart an effort by bailout opponents to get the issue on the Ohio ballot.
House Speaker Larry Householder and four others have since been indicted on federal racketeering charges. Householder was removed as speaker days after an FBI affidavit was made public in July. The Legislature is working to repeal the bailout bill and possibly replace it.
FirstEnergy CEO Chuck Jones has said the company committed no wrongdoing.
The company is facing scrutiny beyond the federal investigation. Independent members of FirstEnergy's board of directors are conducting an internal investigation. The U.S. Securities and Exchange Commission is also investigating the company, although no information about what that probe entails has been made public.
The Consumers' Counsel, in its latest filing, also renewed its call for PUCO to reopen a 2017 case involving an independent audit of a PUCO ruling that allowed FirstEnergy to charge customers for modernizing its electric grid.
The audit found peculiarities, including the commission not stopping FirstEnergy from using modernization charges to create a pool of cash from which its affiliates — including corporate entities located outside Ohio — could borrow money.
The Consumers' Counsel and others had filed an appeal with the Ohio Supreme Court to overturn the grid modernization charges, which had cost customers roughly $465 million by the time justices ruled the charges were unlawful and revoked them.
PUCO complied with the court's ruling, but did not order FirstEnergy to pay back the money.
Schilling has said the grid modernization case is a pending matter that will allow for responses to the Consumers' Counsel motion.


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