Ohio Legislature advancing on repeal of tainted energy law

By Mark Gillispie - Associated Press

CLEVELAND (AP) — The Ohio Legislature appears to be making progress on eliminating most of the provisions included in a corruption-tainted energy bill now the subject of federal investigations.

The Ohio Senate on Wednesday voted unanimously to approve a bill that removes the most scrutinized provision: a $1 billion bailout for two Ohio nuclear plants that were operated by a subsidiary of Akron-based FirstEnergy Corp. when the energy bill was approved in July 2019.

A new company called Energy Harbor took ownership of the two plants along the Lake Erie shoreline in February 2020 in a U.S. Bankruptcy Court deal with the subsidiary, FirstEnergy Solutions. Energy Harbor has indicated to lawmakers it no longer wants the subsidy that would have been funded by electric customers from across the state.

“In retrospect, there needs to be valuable lessons learned from this,” said bill cosponsor Rob McColley, a Republican from Napoleon. “This is something that in my view will undo something that did an awful lot of damage not just to our institution, but to the state of Ohio.”

The damage wrought by the energy bill known as HB6 is still being calculated. Then-Ohio House Speaker Larry Householder and four others were arrested and indicted in July 2020 on federal racketeering charges for what has been called the biggest corruption scandal in state history.

Householder is accused of leading a $60 million bribery scheme secretly funded by FirstEnergy to get the energy bill approved and to conduct a dirty tricks campaign to prevent a referendum on the bill from reaching the ballot. Householder has pleaded not guilty while two of his alleged co-conspirators have entered guilty pleas.

In the wake of the indictments, FirstEnergy fired a number of top officials, include CEO Chuck Jones. Current FirstEnergy officials say they are cooperating with the U.S. Justice Department and U.S. Securities and Exchange Commission in their investigations.

The state Senate last month unanimously approved legislation that would eliminate another provision viewed by critics as a FirstEnergy giveaway. That provision guaranteed revenue for FirstEnergy’s three Ohio utilities based on what they earned in 2018, a year of weather extremes and high electricity use.

In a settlement agreement with Ohio Attorney General Dave Yost last month, FirstEnergy said it would forgo collecting guaranteed revenues from customers.

Senate President Matt Huffman, a Lima Republican, said after Wednesday’s vote that he had “general conversations” with House Speaker Bob Cupp late last year about how the two chambers might proceed in repealing the energy bill’s provisions. The measures approved by the Senate are a start, he said.

The Ohio House has been holding hearings on a separate bill that would eliminate the nuclear plant subsidies along with a $20 million annual subsidy for five large-scale utility farms, none of which are producing power yet. The House is expected to vote on the measure next week, Cupp said.

It’s likely that members of both chambers will form a conference committee to negotiate the final provisions of a repeal bill they will send to Republican Gov. Mike DeWine.

The one provision of the tainted energy bill that has not been addressed in any pending legislation is the subsidy being paid by nearly all Ohio electric customers to support two aging coal-fired power plants, one of which is located in Indiana.

The plants owned by a consortium called the Ohio Valley Electric Corp. were built in the 1950s to provide power to a uranium enrichment facility in Piketon, Ohio. Government contracts with OVEC ended in 2003 but the plants continue to operate, typically selling electricity to the grid at a price that’s less than what it costs to produce.

Before the energy bill took effect in 2020, only customers of AEP-Ohio, Dayton Power & Light and Duke Energy paid to subsidize the plants. Customers from FirstEnergy’s three utilities also began paying for that subsidy starting last year.

Critics have pointed out that AEP-Ohio, which owns the biggest share of the OVEC plants, initially opposed the nuclear plant bailout then gave its support when the coal plant subsidy was added to HB6.

By Mark Gillispie

Associated Press