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First Energy Implicated in Ohio Bribery Scandal Ohio House Speaker Arrested

July 22, 2020 – In breaking news, Ohio House Speaker Larry Householder and four others were arrested yesterday and charged as part of a $60 million racketeering and bribery investigation.

The one-year-long investigation was tied to the financial rescue of two nuclear plants that were owned by First Energy’s former subsidiaries in what was described as a pure pay to play scheme.

According to David DeVillers, U.S. Attorney for the Southern District of Ohio, the bribery was quid pro quo in exchange for a $1 billion financial rescue of the two nuclear plants. Shortly after Householder became Ohio House Leader, he rolled out a new plan when previous attempts for a bailout failed in the Ohio Legislature. The Ohio legislation added a new fee paid for by electric customers in the state and directed over $150 million a year to through 2016 to the nuclear plants.

In a federal criminal complaint filed, First Energy was not mentioned specifically. However, according to a July 21, 2020 article in the (see link below), the complaint referred to “Company A as the corporation that funded the conspiracy to secure the $1.3 billion public bailout for two Ohio nuclear power plants owned by First Energy Solutions, now Energy Harbor.”

During a news conference, DeVillers said “I will not be mentioning the name of Company A because of our regulations and rules” but also said that “Everyone in this room knows who Company A is.” First Energy Solutions was spun off as part of a “good bank-bad bank” strategy by First Energy.

If this sounds familiar to you, that is because two years ago, New Jersey enacted a controversial nuclear subsidy law that will pay almost $1 billion in subsidy over a 3-year period to PSE&G, at the expense of all New Jersey customers, not just PSE&G’s customers.

The law was controversial for a number of reasons. First, PSE&G didn’t disclose appropriate financial information on why the subsidy was needed but threatened to close down the nuclear plants unless it receives the subsidy. By most accounts, the nuclear plants were profitable. There was also strong opposition to the bill before it was enacted. Almost all public comments were opposed to the bill – all except PSE&G that stood to gain $300 million annually for at least three years. Despite this, the bill was passed and signed into law on May 23, 2018.

See links below for articles regarding the PSE&G’s subsidy:

Let’s not forget that First Energy, with its headquarters in Ohio, also seek a $4 billion bailout in 2016, the same year that its subsidiary JCP&L proposed to build the unneeded and unwanted 230K volt transmission line through five towns in Monmouth County. Ohio legislature was ready to say yes until the Federal Energy Regulatory Commission (“FERC”) objected to the bailout, saying it was an illegal subsidy that would distort competitive electricity markets. In an attempt to skirt the jurisdiction of FERC, First Energy revised the bailout request and then asked for another $4 billion to reduce its debt and another $4 billion to keep its corporate headquarters in Ohio, for a total of $12 billion in bailouts.

The Public Utilities Commission of Ohio (“PUCO”) approved a $600 million electricity rate plan (just 5% of the $12 billion requested) to spend it on “grid-modernization programs” that it would approve in the future. However, PUCO didn't actually require that the $600 million be spent on grid modernization!

In the end, it is we, the consumers, that are paying for all this! Maybe it’s time to bring back Consumer Advocates!

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