Consumer advocate again demanding independent probe of FirstEnergy

By: - September 23, 2020 1:00 am

Davis Bees Nuclear Power Station with electricity pylons, Ohio. Getty images.

Ohio’s official consumer advocate is again asking that regulators mount an independent investigation into whether a Northern Ohio utility improperly used ratepayer funds to fuel what federal prosecutors called the biggest bribery scandal in state history.

The Office of Ohio Consumer Counsel on Monday objected to a directive last week by the Public Utility Commission’s attorney examiner — an administrative law judge — that Akron-based FirstEnergy itself show that it didn’t use ratepayer funds to pay for a scheme to pass a nuclear bailout last year.

U.S. Attorney David M. DeVillers in July charged then-House Speaker Larry Householder, R-Glenford, and four associates in what DeVillers called a $60 million bribery scheme. It was intended to make Householder speaker and pass House Bill 6 — a $1.3 billion ratepayer-financed bailout, which will mostly be used to prop up two failing nuclear power plants owned by Energy Harbor, a FirstEnergy spinoff, DeVillers said.

The U.S. attorney said that much of the money passed from “Company A” (FirstEnergy) and its affiliates to 501(c)(4) “dark money” groups. It was  then used for four purposes: to elect members to the House who would vote to make Householder speaker; to pass HB 6; to fight off a ballot initiative to repeal HB6, and to line the pockets of Householder and his associates, DeVillers said.

Nobody associated with FirstEnergy has been charged in the case, although in July DeVillers stressed that the investigation was far from complete.

Earlier this month, the Ohio consumer counsel made several filings with the PUC asking, in essence, for an independent investigation to determine where FirstEnergy got the money used in the scheme. The office wasn’t pleased with Attorney Examiner Greg Price’s call last week to have FirstEnergy itself to show that it hadn’t used ratepayer money improperly.

“In a September 15 entry by Attorney Examiner Greg Price, the (Public Utilities Commission) responded to (the Consumer Counsel’s) consumer protection motions – by mostly not granting them,” the agency’s most recent filing said.

It added that such a “limited review and its reliance on self-reporting by FirstEnergy are inadequate for consumer protection. Indeed, the PUCO’s approach could enable FirstEnergy to thwart consumer protection. That is why (the consumer counsel) proposed broad and fair investigatory procedures… for checks and balances on FirstEnergy’s account of what happened.”

The filing noted that the federal criminal investigation is thought to be continuing and that the U.S. Securities and Exchange Commission has opened a probe of its own. In addition, Ohio Attorney General Dave Yost might be considering an investigation, several lawsuits by FirstEnergy shareholders have been filed and independent members of the company’s board of directors have ordered an internal review.

“But those investigations are for different purposes than a PUCO investigation for protection of FirstEnergy’s electric consumers,” the consumer counsel’s filing says.

Dan Tierney, press secretary to Gov. Mike DeWine, said his office didn’t have a comment on the consumer counsel’s request for an investigation.

PUCO spokesman Matt Schilling said that the most recent filing by the consumer counsel “is in a pending proceeding before the commission and is under review.”

The consumer counsel also is asking that the utilities commission reopen an investigation into $465 million FirstEnergy was allowed to collect from Ohio ratepayers in 2017 and 2018 as a “distribution modernization rider” — money intended to upgrade the electrical grid. An independent auditor found that FirstEnergy was allowing out-of-state utilities to borrow from the fund and that some of the money seemed to pay stock dividends, not to upgrade the grid.

The Ohio Supreme Court subsequently declared the charge to be unlawful, but the money wasn’t refunded to ratepayers. After the court ruling, the utilities commission shut down its investigation into the extra charge and how the money was used.

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Marty Schladen
Marty Schladen

Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He's won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.