Ohio’s FirstEnergy electric utility holding company has agreed to disgorge some $26 million it collected under legislation (HB 6) passed to rescue two of the company’s uneconomic power plants with more than a billion dollars in subsidies after it became clear the legislation passed as a result of a utility-led $60 million bribery scheme.
Akron-based FirstEnergy said it would refund the money to customers just after Republican Gov. Mike DeWine March 31 signed legislation repealing most of the bailout bill. The Cleveland Plain Dealer reported, “HB128 also repeals an HB6 “decoupling” provision that allows FirstEnergy Corp. to collect a comparatively high amount of money from customers, as well as a separate measure making it easier for FirstEnergy to pass state limits on significantly excessive profits.”
HB 6 would have given FirstEnergy some $150 million per year to subsidize the plants, which have been unable to win support in competitive capacity auctions in the PJM Interconnection, based on a $0.85 charge on monthly bills, and a $1.50 monthly charge to bills from the multi-utility Ohio Valley Electric Corp. (OVEC) for two coal-fired plants in Ohio and Indiana.
Last month, the Ohio Consumers Council, the state’s consumer advocacy agency, called on the company to refund the money it had already received from customers of three of its Ohio companies, arguing that the refund would “remedy what would be a miscarriage or perversion of justice.” The company responded that the refund had no legal basis. DeWine’s signature on the repeal legislation negated that utility argument.
OCC’s Bruce Weston said, “Ohio should not allow FirstEnergy to walk away from House Bill 6 with even a penny of consumers’ money,” the Toledo Blade reported. Toledo is the home of one of the two nuclear plants that would have benefitted from HB 6, Davis-Besse. The other is the Perry plant. Neither have been successful in bids in the PJM Interconnection’s capacity market auctions.
The Blade noted that the legislation DeWine signed does not affect the two coal-fired plants getting blessed in HB 6, 1950s-vitage units in Ohio and Indiana. OVEC owns those plants, with the largest shareholder Columbus-based American Electric Power.
The Associated Press reported, “The company said in a release that it is ‘committed to engaging in a holistic and transparent manner’ as part of a months-long review undertaken after the arrests in July of then-Ohio House Speaker Larry Householder, a Republican, and four others alleged to have been involved in the bribery scheme.”
In a related matter, the Ohio Senate began considering a bill that would overturn a 1957 state supreme court ruling that utilities aren’t required to refund payments later deemed illegal. According to the Plain Dealer, the Ohio General Assembly in 2017 and 2018 passed similar legislation, which ultimately failed.
–Kennedy Maize
(kenmaize@gmail.com)