Householder and Borges plan to ask judge to reverse guilty verdicts and allow a new trial

Plus, other updates in the ongoing Ohio bailout, bribery, and corruption scandal

Larry Householder speaks after guilty verdict. Photo by: WEWS/WCPO.

This monthly newsletter provides updates on Ohio’s ongoing utility corruption scandal and is a joint project of Eye on Ohio, the nonprofit, nonpartisan Ohio Center for Journalism, and the nonprofit Energy News Network. Got a question? Story idea? Send tips or comments to [email protected].

Lawyers for former Ohio House Speaker Larry Householder and lobbyist Matt Borges said they would file post-verdict motions by April 24 in the federal government’s House Bill 6 criminal case. Jurors found both men guilty last month after seven weeks of trial.

The federal government may still file criminal charges against additional defendants. Based on that, unindicted individuals tied to the scandal surrounding Ohio’s nuclear and coal bailout law are seeking to stall pre-trial fact-finding, called discovery, and other civil case proceedings, even as they deny liability.

Among other things:

  • Judge Chris Brown will let the Ohio attorney general’s civil lawsuit move ahead against FirstEnergy, Energy Harbor and others — except for Sam Randazzo, a former chair of the Public Utilities Commission of Ohio.
  • Newly released financial documents show additional fossil fuel interests had ties to Generation Now, the primary dark money group in the HB 6 scandal.
  • Former FirstEnergy executives Chuck Jones and Mike Dowling want to block depositions — pre-trial questioning by opposing lawyers — in a shareholder lawsuit for damages.
  • The Office of the Ohio Consumers’ Counsel has asked Ohio regulators to reconsider their ongoing stay of four FirstEnergy cases.
  • FirstEnergy has asked Ohio regulators to increase charges for consumers, including an extension of a charge called a “delivery capital rider.” An audit in one of the stayed cases found that roughly a quarter of the charges reviewed there were improper.
  • Electricity generation charges will also go up for FirstEnergy utility customers who don’t shop for their own electricity, starting in June, unless those customers pick another supplier or are in a community with an aggregation plan, such as NOPEC.
  • A federal court judge dismissed HB 6 shareholder claims brought on behalf of the company against officers and directors of American Electric Power.

Guilty verdict challenges

Post-verdict motions are due April 24 from former Ohio House Speaker Larry Householder and lobbyist Matt Borges in the federal government’s HB 6 criminal case.

Filings for both Householder and Borges, a former chair of the Ohio Republican Party, say they plan to file motions for a judgment of acquittal. Those motions would ask U.S. District Court Judge Timothy Black to reverse his prior ruling and find that the evidence at trial was not enough to support a guilty verdict.

The lawyers’ filings also say they plan to ask for a new trial. Those motions would try to persuade the judge that he made significant errors in his rulings before or at trial. Those likely would focus on whether the judge properly let certain evidence in or kept it out. For example, Householder tried unsuccessfully to prevent the jury from hearing recordings of deceased alleged co-conspirator Neil Clark. Householder also wanted to provide more evidence about the common use of dark money groups in politics and arguments about HB 6’s merits.

Preparation of pre-sentencing reports is also underway. Those reports guide judges in determining if, how long, and under what conditions defendants should be in prison or subject to other penalties.

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FirstEnergy wasn’t the only one

Although most money in the HB 6 scandal came from FirstEnergy or its affiliates, others paid smaller amounts. For example, Murray Energy’s $100,000 payment to a dark money group called Hardworking Ohioans came to light soon after Householder and Borges were arrested in 2020. And Generation Now’s contributors included a group funded by American Electric Power and a few labor unions.

But there were more, including additional fossil fuel interests.

On March 29, the Energy and Policy Institute, a watchdog group, released bank records the city of Cleveland had subpoenaed as part of an HB 6 investigation in 2021. A company linked to coal producer Wayne Boich paid $250,000 to Generation Now in 2018, in addition to previously reported donations from Boich and his wife.

The Karen Buchwald Wright Revocable Trust also gave $250,000 in 2018. At the time, Wright headed a company that makes compressors for natural gas. She and her husband also have ties to The Empowerment Alliance. The group pushed to define natural gas as “green energy,” which Ohio’s lawmakers did in 2022. The Energy and Policy Institute has also linked the group to a political action committee that spent more than $1 million on Ohio’s 2022 elections.

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Partial thaw in state case

Franklin County Judge Chris Brown is letting the Ohio attorney general’s HB 6 civil case move ahead, except against former PUCO Chair Sam Randazzo.

Randazzo denied liability in the case. Nonetheless, his lawyers argued, the claims in the civil case and public statements from the Ohio attorney general “are predicated upon their alleged criminal conduct.

“The public interest strongly weighs against a stay in this case,” Brown concluded after weighing multiple factors. With respect to Randazzo, however, he noted that the Ohio Supreme Court has stayed an appellate court ruling relating to the case.

Proceedings at the Ohio Supreme Court deal with whether Brown properly let the Ohio attorney general’s office restrict Randazzo’s disposition of various assets before a judgment can be rendered in the case. Briefing in that case should wrap up by April 24.

In another trial court ruling, Brown gave the Ohio attorney general’s office until April 21 to file an amended complaint, if it chooses. That filing could potentially include information from the criminal trial or name one or more new defendants.

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Also in the cross-hairs?

Lawyers for former FirstEnergy executives Chuck Jones and Michael Dowling balked at efforts by investors’ counsel to question the two under oath in a shareholder damages case related to HB 6, saying the two face “looming potential indictments.”

The court gave Dowling and Jones until April 17 to ask for a protective order, and the plaintiffs will get a chance to respond afterward. The process will further delay efforts to find out more about FirstEnergy’s actions relating to HB 6. Jones and Dowling are also defendants in the Ohio attorney general’s civil lawsuit.

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Consumer plea to PUCO

The Office of the Ohio Consumers’ Counsel has asked the Public Utilities Commission of Ohio to reconsider and reverse its March 8 order delaying any further action in four FirstEnergy regulatory cases for another six months.

The U.S. Attorney for the Southern District of Ohio requested an extended stay on Feb. 23. At that time, the Householder trial was still going on. The jury returned its guilty verdicts on March 9.

The consumers’ counsel argues, among other things, that the blanket stay ordered by the PUCO is too broad and that a stay is no longer necessary for FirstEnergy.

Issues in the four cases could shed light on whether FirstEnergy used ratepayer money for its HB 6 activities. For example, one case found that money from a so-called “distribution modernization rider” was not properly tracked. Intervening parties have argued the company should pay roughly $1.4 billion in penalties.

Another case found that roughly a quarter of the charges for a so-called delivery capital rider were improper.

FirstEnergy seeks more charges

Meanwhile, FirstEnergy has asked the PUCO to increase charges to its Ohio utility customers by an average of more than $3 per month.

FirstEnergy’s April 5 press release bases that estimate on an assumed average of 750 kilowatt-hours per month. However, Energy Information Administration data for 2021 indicates that Ohio’s average residential monthly consumption was 879 kWh per month.

The additional charges would be part of FirstEnergy’s Electric Security Plan. Ohio law has allowed such plans since 2008 as a way to let utilities collect riders or other fees from customers without going through a formal ratemaking process.

The new filing asks the PUCO to approve the requested hikes in charges for eight years, through 2032. That’s consistent with the current plan, said FirstEnergy spokesperson Lauren Siburkis.

Among other things, the utilities plan to continue the delivery capital rider. There would be some modifications to the annual revenue caps and changes to incorporate impacts from future base rate reviews, Siburkis noted. “The companies plan to file their next base distribution rate review in May 2024,” she added.

It’s also unclear how the eight-year plan would mesh with the base rate case. Traditional ratemaking cases generally review all company revenues and expenses. The last time FirstEnergy had a full ratemaking case was more than a dozen years ago.

Pricier power

Apart from the new filing, FirstEnergy customers who don’t get their electricity generation from another supplier can expect to pay about double for that electricity starting in June. Other Ohio utility customers are also bracing for higher electricity generation charges this summer.

The bump will be smaller for customers in communities that are part of NOPEC or some aggregation plans. Unless NOPEC customers opt out, their generation charges will be 6.5 cents per kWh for electricity generation, versus the 10.2 cents FirstEnergy’s non-shopping customers will pay.

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Coal subsidies continue

Ohio Reps. Casey Weinstein, D-Hudson, and Sean Brennan, D-Parma, introduced a new bill last month to repeal HB 6’s subsidies for two 1950s-era coal plants. Prior bills stalled in legislative committees. Meanwhile, Ohio ratepayers continue to pay utilities for those plants, one of which is in Indiana.

Charges for the two plants are supposed to be reviewed by the PUCO. However, the regulatory agency still has not resolved cases involving charges for the plants going back to 2018.

Additionally, regulators waited until April 7 to set a schedule for comments on an audit of charges from 2020 — nearly two years after that case began. Those comments are due by May 8.

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AEP litigation update

A March 21 order by Judge Sarah Morrison dismissed shareholder claims brought on behalf of American Electric Power against various officers and directors of the company. The complaint alleged AEP’s board knew about funds going to a dark money group that in turn helped fund efforts to pass and protect HB 6.

The judge found the complaint did not have enough specific facts to support that claim. If Morrison’s ruling stands, it could lower the bar for director and officer oversight of corporate political spending.

For now, dismissal of the case blocks more facts about AEP’s involvement with HB 6 from coming out. Further information could come from any action by the Securities and Exchange Commission after it reviews documents subpoenaed from the company or from subsequent cases brought by shareholders.

This article first appeared on Energy News Network and is republished here under a Creative Commons license.



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Kathiann M. Kowalski, Energy News Network
Kathiann M. Kowalski, Energy News Network

Kathi is the author of 25 books and more than 600 articles, and writes often on science and policy issues. In addition to her journalism career, Kathi is an alumna of Harvard Law School and has spent 15 years practicing law. She is a member of the Society of Environmental Journalists and the National Association of Science Writers. Kathi covers the state of Ohio.