Mysterious nonprofit with AEP ties has $3 million to unload, tax records show
The American Electric Power building in downtown Columbus. Photo by Jake Zuckerman, OCJ.
Under shadow of a public corruption probe centered on the utility industry and its use of untraceable political spending, a nonprofit with close ties to American Electric Power disclosed harboring $3 million in the bank that it could unload as statewide elections loom.
Open Road Path — a nonprofit run by a lawyer and lobbyist who both have long histories with AEP — has $3 million in its accounts, according to its most recent tax documents filed in November with the IRS and obtained Wednesday by the Ohio Capital Journal.
All its funding leads back to another nonprofit, Empowering Ohio’s Economy, which was solely funded by AEP, according to contribution totals shared on an August 2020 earnings call by AEP’s CEO Nicholas Akins.
The nature of Open Road Path is unclear. Its address listed in tax records is the address of the law firm of one of its board members. It has no website. It has yet to disclose any political spending. As a 501(c)(4) nonprofit, it’s not required to disclose the source of its funding. These kinds of entities, especially when they deploy funds for political and electoral purposes, are commonly known as “dark money.”
Empowering Ohio’s Economy donated at least $900,000 to two nonprofits that supported House Bill 6, which bailed out coal-fired and nuclear power plants owned by Ohio utility companies. That includes $700,000 over three years to Generation Now, a nonprofit that has pleaded guilty to its role in the scandal. Former House Speaker Larry Householder was accused of secretly controlling Generation Now, which received about $60 million from Akron-based FirstEnergy Corp., and using the money for political gain, personal enrichment, and ensuring the passage of HB 6. Householder awaits trial, scheduled for January 2023.
In another connection to HB 6, Eric Lycan, an attorney who served as the treasurer of Generation Now and other nonprofits that supported the bill, also prepared Empowering Ohio’s Economy’s tax returns in 2016.
Akins disclosed that AEP provided $8.7 million to Empowering Ohio’s Economy after The Columbus Dispatch broke news, shortly after Householder’s arrest, of the AEP money flowing to Generation Now.
AEP’s dark money spending comes atop the roughly $726,000 its two corporate PACs have contributed to state candidates in the past five years, according to campaign finance records.
Neither AEP nor Empowering Ohio’s Economy have been named as defendants in criminal or civil cases related to HB 6. In June 2021, AEP announced it received a subpoena from the U.S. Securities and Exchange Commission seeking various documents relating to the passage of HB 6. The SEC, when asked for an update Wednesday, declined comment.
Open Road Path’s tax documents lists two board members: Tom Froehle and James B. Hadden. Froehle is an energy lobbyist who represented AEP before the General Assembly for at least 10 years. Hadden has represented AEP before the Ohio Supreme Court to defend against challenges to its “electric security plan,” a regulatory process that sets what costs utilities can pass on to their customers.
About two weeks after AEP received its subpoena, Froehle retired as the AEP Ohio’s vice president of external affairs, according to a posting on a company retirees’ website. His lobbyist registration for AEP was terminated July 1, 2021, per state records.
In an interview, Hadden said the money was transferred to Open Road Path because word had gotten out among political fundraisers that Empowering Ohio’s Economy had money to give out. He said he never received any sort of directive from AEP tied to the money to advance its political interests.
When asked about the $700,000 Empowering Ohio’s Economy provided to Generation Now, he said the donation was lawful.
“Any donation we ever made, we made clear that it was to be used consistent with Section (c)(4) of the IRS code,” he said.
As a regulated, investor-owned utility supplying power to about 1.5 million Ohioans, AEP has significant vested interests before the state political system.
It currently has eight lobbyists registered on its behalf. Some of them list as many as 20 bills on which they’re pushing for or against. Some would reshape how large a profit margin utility companies can earn, or how and whether costs are shifted from the utility to its customers.
House Bill 6 itself had major implications for AEP. The legislation gutted renewable portfolio standards, which required electric companies to increase the percentage of their power supply that comes from wind, solar and other renewable and non-fossil fuel sources. It also nixed energy efficiency programs, which incentivized utilities to help their customers use less power.
Most importantly, perhaps, HB 6 supercharged subsidies to two coal plants of which AEP owns 43% equity. State utility regulators had previously allowed Ohio’s power companies with ownership stakes in the Ohio Valley Electric Corp., which operates two old coal plants that are costing its owners millions in losses, to pass on those losses to their customers through 2024. The legislation codified the subsidies in state law, extended them through 2030, and spread the costs to all customers statewide.
While the nuclear bailouts — which have drawn the most focus in the criminal case — were repealed last year, the coal subsidies remain in law.
Under HB 6, all electric customers statewide pay a monthly fee ($1.50 per month for residential customers) to cover the plants’ losses. That pot of money is shared among AEP, Duke Energy (9% equity ownership), and AES Ohio (4.9%). AEP, as the largest equity owner by a wide margin, is entitled to the largest chunk of that money.
There are various legislative efforts to repeal the OVEC subsidy — $211 million in customer costs as of January and an estimated $700 million by 2030 — though the bills have largely stalled.
AEP spokesman Scott Blake did not respond to specific inquiries about Open Road Path, deferring comment to Hadden.
An earlier version of this report transposed Hadden and Froehle regarding Froehle’s retirement from AEP.
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