Fix for troubled Ohio energy law coming down to the wire

Former PUCO commissioners call for changes

State lawmakers are split into multiple camps over how Ohio should change an energy law that is at the center of an alleged $60-million bribery scheme.

Millions of Ohio ratepayers in January are scheduled to start paying a new monthly fee that will generate $150 million a year to bailout two nuclear power plants owned by Energy Harbor.

A Franklin County Common Pleas Court judge on Monday issued a preliminary injunction to block collection of the fees. It is unclear if that order may be appealed.

Legislative leaders said now Energy Harbor may not want the subsidy.

A federal rule blocks companies that receive state subsidies from being able to sell their energy on a market that is designed to provide extra energy capacity if needed.

Energy Harbor officials did not respond to messages seeking comment.

Cleveland.com reported that the Ohio House is considering a new plan to collect the subsidy and then give Energy Harbor the option of taking it.

Senate President Larry Obhof, R-Medina, said state senators are reluctant to embrace any HB6 fix that hasn’t been thoroughly vetted. “There is a lot of reasons to be cautious,” he said.

Ohio State University economic development professor Ned Hill said it’d be “sheer lunacy” to let Energy Harbor decide whether it wants the subsidy. “It’d be, ‘Let’s allow the party that tried to bribe the Legislature decide which present it’s going to get.”

ExploreFight over energy bailout law delayed

In July 2019, Gov. Mike DeWine signed House Bill 6 into law. A coalition of groups mounted a statewide referendum campaign to overturn it but failed after facing a fierce counter campaign.

In July 2020, the FBI arrested then Ohio House speaker Larry Householder, R-Glenford, and four other men. Federal prosecutors allege that utility companies funneled more than $60 million in bribes through dark money political groups to elect pro-Householder legislators, position Householder to become speaker, and pass and defend House Bill 6. Householder and two others have pleaded not guilty; two others entered guilty pleas.

Although federal prosecutors don’t name the utility companies, descriptions identify them as Akron-based FirstEnergy Corp. and its former subsidiary FirstEnergy Solutions, which is now called Energy Harbor. FirstEnergy and Energy Harbor have both said they are cooperating with federal investigators.

Sam Randazzo, who was appointed by DeWine to head the Public Utilities Commission of Ohio, resigned in November after the FBI searched his home and FirstEnergy told the Securities and Exchange Commission that it fired three top executives because of a $4 million payment to end a consulting deal with someone who subsequently became an Ohio utility regulator.

There is more than $2 billion riding on whether HB6 remains Ohio law or is repealed. The law requires payments by customers across Ohio:

— $1.3 billion to subsidize nuclear power plants owned by Energy Harbor, through 2027;

— $444 million to subsidize coal plants owned by Ohio Valley Electric Corp. through 2030;

— $355 million in ‘decoupling’ revenues to FirstEnergy through 2024; and

— $140 million in subsidies for large solar projects though 2027.

Lawmakers are split over a full repeal, a partial repeal or a delay in the nuclear plant subsidies.

DeWine on Monday repeated that he thinks the bill should be repealed and replaced because it became law through an “unseemly” process.

“It really kind of stinks up the whole room,” he said of the law.

Lawmakers are scheduled to hold the final legislative voting day Tuesday but it’s unclear if an agreement can be reached on an HB6 fix. The two-year legislative session must conclude by Dec. 31.

Three former PUCO commissioners sent a letter to DeWine on Monday, calling for a broad investigation of FirstEnergy.

“The allegations and facts and circumstances of the actions that have occurred in the recent past require that specific, credible actions be taken to restore the public trust,” said a letter signed by Ashley Brown, Todd Snitchler and J. Michael Biddison.