PUCO expands scope of FirstEnergy audit; Ohio utility at center of $60M bribery case

PUCO expanded the scope of a third-party audit of FirstEnergy Corp., which is the Ohio-based utility that advocated passage of the controversial House Bill 6 bailout and is at the center of a $60 million bribery case.
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PUCO expanded the scope of a third-party audit of FirstEnergy Corp., which is the Ohio-based utility that advocated passage of the controversial House Bill 6 bailout and is at the center of a $60 million bribery case.

The Public Utilities Commission of Ohio on Wednesday expanded the scope of an ongoing audit of an Ohio-based utility at the center of a $60 million bribery case.

The commission directed its third-party auditor to examine whether FirstEnergy Corp. collected any funds from customers that was used for payments disclosed in a recent 10-K filing submitted to the Securities and Exchange Commission.

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It its filing, First Energy identified “certain transactions … that were either improperly classified, misallocated … or lacked supporting documentation.”

This is the fourth proceeding related to allegations surrounding FirstEnergy, according to a release from PUCO.

Separate proceedings regarding political and charitable spending, corporate separation, and an audit of FirstEnergy’s distribution modernization rider remain ongoing,” the release stated.

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The commission on Nov. 4, 2020, opened its annual audit of the Delivery Capital Recover rider for FirstEnergy holdings, which include Ohio Edison, Cleveland Electric Illuminating Company and Toledo Edison. The rider allows utilities to recover costs related to annual distribution system and infrastructure investments.

The audit is among a long list of investigations and inquiries FirstEnergy faces over its advocacy of the controversial House Bill 6. It benefited from the $1.3 billion bailout for Ohio’s two nuclear plants signed into law in July 2019 and paid for by all Ohio electricity customers.

Federal prosecutors alleged that Ohio House speaker Larry Householder, R-Glenford, took nearly $61 million in bribes to gain political power and then pass and defend House Bill 6 from a referendum attempt. The federal complaint does not name the utilities involved but descriptions identify them as FirstEnergy, FirstEnergy Services Co. and Energy Harbor.

Householder, lobbyist Neil Clark and Former Ohio GOP chairman Matt Borges have pleaded not guilty to federal racketeering charges.

Householder’s political strategist Jeff Longstreth, Energy Harbor lobbyist Juan Cespedes and Generation Now, a 501(c)4 nonprofit used as a funnel for political money, have pleaded guilty.