FirstEnergy refusing to return subsidy cash to customers
CLEVELAND (AP) — An Ohio electric company under scrutiny for its role in what federal authorities say was a $60 million bribery and corruption scheme has told state energy regulators that it should not have to refund customers $30 million collected from a revenue guarantee provision included in a tainted energy bill.
The millions in question were paid by customers of Akron-based FirstEnergy Corp.’s three Ohio electric utility companies, guaranteeing that they receive the same amount of annual revenue they collected in 2018, a year of extreme weather and high electric use.
The Ohio Consumers’ Counsel earlier this month asked the Public Utilities Commission of Ohio to order FirstEnergy to “remedy what would be a miscarriage or perversion of justice” if the company would be allowed to keep the rate guarantee money.
“As we see it, the PUCO or the legislature shouldn’t allow FirstEnergy to walk away from the House Bill 6 scandal with even a penny of Ohioans’ money, and certainly not with the $30 million it charged consumers for recession-proofing,” Consumers’ Counsel Bruce Weston said in a statement.
FirstEnergy attorneys responded by saying the consumers’ counsel legal strategy is flawed and there is no basis for returning the money.
Former CEO Chuck Jones told investors after the passage of the energy bill in July 2019 that the rate guarantee made a portion of the company “recession proof.”
The guarantee, called decoupling, is one of the less-discussed provisions in the energy bill. The legislation is best known for a $1 billion bailout for two aging Ohio nuclear power plants operated at the time by a wholly-owned FirstEnergy subsidiary.
The plants and other FirstEnergy assets were transferred to an independent company in February 2020 in a deal struck in bankruptcy court. The new company, Energy Harbor, recently indicated to legislators that it does not want the money.
Ohio Attorney General Dave Yost in early February announced that FirstEnergy had agreed to forgo collection of the rate guarantee to settle a lawsuit Yost had filed against the company.
Then-U.S. Attorney David DeVillers announced last July the arrest of Ohio House Speaker Larry Householder and four others for using the $60 million secretly funded by FirstEnergy to win passage of the energy bill and to engage in a dirty tricks campaign to stop a referendum voter drive to get the issue on the ballot.
Householder and four others were arrested and indicted on federal racketeering charges last July. Householder has pleaded not guilty.
While FirstEnergy initially denied wrongdoing, it has acknowledged in securities filings that the company is being federally investigated.
Earlier this week, FirstEnergy said in SEC filing that the energy commission has opened an investigation of FirstEnergy’s lobbying and governmental affairs activities surrounding its role in the energy bill’s passage.