A Federal Energy Regulatory Commission financial audit has found Ohio-based FirstEnergy improperly accounted for many expense items, including its spending on the controversial and now cancelled legislation (HB6) to bail out two uneconomical nuclear power plants and a coal plant. As a result, the company will have to refund, by its calculation, at least $9.5 million to its Ohio customers.
The audit found that the Akron-based company improperly accounted for and reported lobbying expenses and other costs associated with HB6. The utility’s stealth support for the legislation, and its opposition to a ballot initiative to overturn the law, resulted in the defenestration of Republican House Speaker Larry Householder and subsequent federal criminal charges against him of racketeering and bribery.
The depths of FirstEnergy’s involvement in the scandal reached even into the Public Utility Commission of Ohio and the office of Ohio’s Republican Gov. Mike DeWine, who killed the legislation when the scandal broke.
The FERC audit, as reported by Youngstown, Ohio, TV station WBKN, raised additional problems with FirstEnergy’s financial accounting, including allocating construction work in progress and funds used during construction, fuel and accounting (including consulting services), billing, vegetation management, and amortization of regulatory assets. A FirstEnergy spokesman told the Associated Press that the company accepted the audit findings and will make changes in its accounting practices.
Dave Anderson, manager of policy and communications for the utility watchdog Energy and Policy Institute, in a Twitter thread, commented, “A key takeaway from FERC audit of FirstEnergy: What started off as a ‘$60 million bribery scandal’ is now more like a $133 million scandal.” He wrote, “FirstEnergy, after it signed an agreement with federal prosecutors, revealed additional political payments to FERC’s audit team, including $22.8 million paid to two for-profit entities associated with former PUCO chairman Samuel Randazzo.” In addition, “FirstEnergy also disclosed to auditors that it paid a total of $70.9 to groups connected to the HB6 bribery scandal, including Generation Now, Partners for Progress, and Hardworking Ohioans,” and that “the FERC audit doesn’t even account for most of payments to outside firms employed by FirstEnergy Solutions due to jurisdictional limits on FERC’s authority.”
He concludes, “Update: Okay, maybe it’s more than $133 million.”
FirstEnergy has utilities in five states, Ohio (Ohio Edison, the Illuminating Company, and Toledo Edison); Pennsylvania (Met-Ed, Penelec, Penn Power, and West Penn Power); New Jersey (Jersey Central Power and Light ); and West Virginia and Maryland (Mon Power and Potomac Edison). [Disclosure, I am a customer of Potomac Edison].
–Kennedy Maize
kenmaize@gmail.com