The pair of 1950s-era coal plants bailed out under Ohio’s House Bill 6 law are likely to remain unprofitable even after a surge in grid operator payments to generators, experts say. 

The PJM Interconnection grid market makes capacity payments to line up power to meet expected demand in the years ahead. Aging, uneconomical coal plants are being retired at a time when data centers and manufacturers are starting to use more electricity, causing future power generation prices to rise.

But even record-high prices in PJM Interconnection’s recent capacity auction won’t cover the hundreds of millions of dollars in subsidies paid by ratepayers to cover Ohio utilities’ costs for the Ohio Valley Electric Corporation’s Kyger Creek and Clifty Creek power plants.

“Even with a super high price, OVEC is still going to be in the red,” said Neil Waggoner, Midwest manager for the Sierra Club’s Beyond Coal campaign.

The ratepayer subsidies are a result of HB 6, the 2019 state law at the heart of the largest corruption scheme in Ohio’s history. Republican legislative leaders have blocked all efforts to repeal the coal subsidies from coming to a floor vote.

This year alone, ratepayers are on track to pay nearly $200 million to prop up the two plants, one of which is in Indiana. By 2030, total ratepayer costs from the bailout could exceed $1 billion, according to RunnerStone, a consultant for the Ohio Manufacturers’ Association.

Starting next summer, the payments for generators to be ready to supply electricity when PJM Interconnection needs it will jump to about nine times the current rate for most of the grid operator’s service region. 

“Put simply, the market pays participants for the promise to produce electricity when called upon by PJM,” said Daniel Lockwood, a spokesperson for the regional grid operator. An auction sets the levels for each year’s capacity payments, and the payments go to generators that bid the clearing price or less.

A spokesperson for the power plants did not directly answer the Energy News Network’s question about whether both cleared the latest PJM auction, although he described the auction results as “positive.”

“The auction results were a positive development for the OVEC plants and are more broadly a signal to the market that additional generation resources are needed in the PJM region,” said Scott Blake, a spokesperson for American Electric Power and Ohio Valley Electric Corp. While the HB 6 rider charges depend on multiple factors, the impact of the 2025/2026 capacity pricing “is expected to be positive for customers,” he said.

AEP is OVEC’s largest shareholder, along with other utility companies in Ohio and other states.

HB 6’s OVEC subsidies currently require Ohio’s residential utility customers to pay between $1.30 and $1.50 per month, depending on whether their utility is owned by AEP, AES Ohio, Duke Energy or FirstEnergy, according to PUCO data from spokesperson Brittany Waugaman. Businesses pay for the rider, too. The HB 6 rider’s net total costs last year were more than $148 million.

Doing the math

While capacity payments will reduce the OVEC plants’ total costs to Ohio ratepayers, the revenue won’t, in itself, make the plants profitable.

Expert testimony from a Michigan case last year found the OVEC plants would need capacity payments averaging about $418/MW-day for several years to become economical. Last month’s record-high price that will take effect next summer was about $270/MW-day.

Economic analyst Devi Glick of Synapse Energy Economics testified in the case on behalf of the Sierra Club.

“To massively oversimplify the economics of the OVEC plants, there are two categories of costs and two categories of revenues,” Glick told Energy News Network. “Costs are on one side of the equation and revenues on the other.”

Based on then-current projections for costs and energy market revenue, Glick calculated what the plants’ capacity revenues would have to be for the equation to balance out.

Several caveats would apply, Waggoner acknowledged, including any differences from last year to this year that could affect projected energy revenues. Nonetheless, he noted, a significant gap would remain.

Glick’s estimate of about $418 as a break-even capacity price for the OVEC plants is realistic and may even be conservative now, said John Seryak, managing partner for RunnerStone.

“PJM is no longer paying for a coal plant’s full power capacity anymore under new rules it created just prior to this capacity auction,” Seryak explained. “That could mean that OVEC needs even higher-priced capacity and energy to be profitable.”

“Future energy market prices, OVEC’s future coal costs, and OVEC’s environmental compliance costs will also be important factors determining the extent of its losses or profitability,” Seryak continued. “All that said, we do not anticipate OVEC operating at a profit without further price increases.”

Meeting energy demand

Blake emphasized the OVEC plants’ role as a “reliable generation resource for our customers and for our region,” adding that the HB 6 rider “ensures that customers in Ohio receive electricity from OVEC for what it costs to produce it and the funds are used to pay down debt with no proceeds going to shareholders.”

That’s not exactly correct, said attorney Kimberly Bojko at Carpenter Lipps, who represents the Ohio Manufacturers’ Association in cases at the Public Utilities Commission of Ohio. “Customers pay the cost to operate and run OVEC and the power produced from OVEC is then sold into the wholesale electric market,” she said. Any revenue offsets the costs of HB 6’s coal subsidy.

The Ohio Manufacturers’ Association also has disputed the use of the HB 6 rider to pay down the OVEC plants’ debt in cases before the PUCO.

“By using ratepayer funds to pay down its debt, AEP Ohio is essentially shifting its bad debt to the Ohio ratepayers,” Seryak said. “It’s akin to if a person forced their neighbor to pay for their mortgage payment.”

“Customers pay for more than just OVEC’s debt, though,” Seryak added. “Customers also pay for losses in the energy market OVEC incurs. When this occurs, it means the electric grid does not need OVEC for reliability. Instead, OVEC is burning coal pointlessly at a loss and charging it to Ohio’s ratepayers.”

Ohio coal plant subsidies still a bad deal for ratepayers despite growing generation demand, experts say is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Five years after Gov. Mike DeWine signed House Bill 6 into law, Ohio citizens and ratepayers are still paying the price. 

Ohio lawmakers still haven’t taken steps to repeal the rest of the nuclear and coal bailout bill, which is the focus of what prosecutors say was a roughly $60 million bribery scheme by utility FirstEnergy and its affiliates. Cases continue to wind through the courts, and two men implicated in the scandal have apparently taken their own lives. 

“It’s been really painful, and we’re still living with the consequences of House Bill 6,” said Catherine Turcer, executive director of Common Cause Ohio.

Shepherded by former Ohio House Speaker Larry Householder, the bill swept through the legislature in 2019, passing just 3 and a half months after its first introduction and despite massive opposition from consumer advocates, environmental groups, renewable energy interests and others.

The law called for more than $1 billion in subsidies for two nuclear plants for which FirstEnergy had been seeking bailouts since 2014. Additional provisions included subsidies for two 1950s-era coal plants known as the OVEC plants, along with gutting of the state’s renewable energy and energy efficiency standards. A referendum effort that would have let voters reject the law under Ohio’s constitution was ultimately thwarted amid claims of misleading ads, harassment of signature collectors and other problems.

One year after the bill passed, federal agents arrested Householder and others on charges under the Racketeer Influenced and Corrupt Organizations Act, known as RICO. The complaint outlined a $60 million criminal enterprise scheme funded by dark money, most of which came from FirstEnergy or its affiliates — roughly four times as much as the Energy News Network and Eye on Ohio had been able to track before the arrests.

Sam Randazzo resigned his position as chair of the Public Utilities Commission of Ohio months later, following an FBI raid on his home in November 2020. In July 2021, FirstEnergy entered into a deferred prosecution agreement with the Department of Justice, admitting it had bribed Householder and Randazzo.

Neil Clark, a lobbyist indicted in the scandal, apparently committed suicide in Florida in March 2021. Randazzo did the same in a Columbus warehouse he owned in April of this year, as he faced indictments on both federal and state criminal charges, along with loss of his license to practice law.

Calls for a full repeal of HB 6 came immediately after the 2020 arrests, but languished for months. Months after the next election, lawmakers finally repealed the law’s nuclear subsidies and a provision for guaranteed utility revenue, but left the rest of the law intact.

Bills to repeal the coal plant subsidies still have not gotten a full vote, and the state’s clean energy standards remain gutted. And full information about the corruption scandal has yet to come out, including answers to questions about Gov. Mike DeWine’s and Lt. Gov. Jon Husted’s involvement.

“The legislature hasn’t done anything to create greater transparency, to address dark money, to ensure we aren’t ripped off,” Turcer said.

“There’s this interesting intersection of dark money and gerrymandering and general decision-making and accountability at the statehouse,” Turcer continued.

Dark money refers to political spending that can’t be readily traced, and gerrymandering is the drawing of voting districts to advantage one political party over another. Together, both can undermine democracy and have delayed progress on climate change.

Still subsidizing coal

“The fact that we’re still bailing out the coal plants is just insane to me,” said Neil Waggoner, Midwest campaign manager for the Sierra Club’s Beyond Coal program. The Kyger Creek plant is in Cheshire, Ohio, and the Clifty Creek plant is in Madison, Indiana. Both plants consistently lose money.

“Those coal subsidies are costing consumers $500,000 per day,” said Ohio Consumers’ Counsel Maureen Willis. Her office estimates Ohioans have paid more than $330 million since January 2020. RunnerStone, a consultant for the Ohio Manufacturers’ Association Energy Group, projects the HB 6 coal subsidies could reach $1 billion by 2030.

The utilities that own the plants defend their continued operation.

“Customers in Ohio receive electricity from OVEC for what it costs to produce it and the funds are used to pay down debt with no proceeds going to shareholders,” said Scott Blake, a spokesperson for American Electric Power, which owns the largest share of OVEC, with other utilities inside and outside ofn Ohio owning shares. More than 500 employees work to make sure the plants operate as efficiently as possible, he added.

Since 1999, however, Ohio law has generally let consumers choose their electricity supplier. “And recent testimony by Duke executive [Amy] Spiller confirms the coal plants will continue to operate even if the subsidy ends,” Willis said.

The question comes down to whether the companies that made bad business decisions to keep noncompetitive plants running should pay their expenses, “as opposed to the public eating the cost,” Waggoner said.

Higher bills

HB 6 not only added subsidies to consumers’ electric bills. It also axed clean energy standards whose net savings for Ohioans had been about $9 per month.

“The elimination of the energy efficiency programs never made sense because they helped customers reduce their electricity usage,” said Rob Kelter, an attorney with the Environmental Law & Policy Center. “They lowered their bills. And they reduced pollution.”

Yet a legislative analysis claimed cutting those programs to pass HB 6 could save Ohioans’ money, a position that was further buttressed by testimony from then-PUCO chair Randazzo. Those arguments left out customers’ savings from avoiding wasted energy and lower overall capacity costs, Kelter said.

A bill to allow some permissive energy efficiency programs finally passed in the Ohio House last month, but passage in the state Senate isn’t guaranteed.

Regulatory scrutiny

Randazzo not only played a key role in shaping HB 6 and getting it passed. He also shaped the PUCO’s piecemeal response after Householder and others were arrested. That approach has continued, even after criminal charges were brought against Randazzo in federal and state court.

“Even after the revelations of what former PUCO Chair Sam Randazzo did for FirstEnergy in the halls of the PUCO, the agency itself has not had to answer to the public,” Willis said. “Case decisions issued while the former Chair led the agency have not been examined.”

“Why has there not been a management audit at the commission?” asked Ashley Brown, a former PUCO commissioner who subsequently headed the Harvard Electricity Policy Group. “Something clearly went wrong. We know that the chairman was bribed. We know that the other people went along.”

Agency spokesperson Brittany Waugaman noted the PUCO has four ongoing investigations in cases relating to FirstEnergy, but did not respond to questions about whether regulators plan to conduct an internal review of its own operations or otherwise review decisions in which Randazzo had participated.

Moreover, “the PUCO too often has made it difficult to get to answers for consumers,” Willis said. “Adverse discovery rulings, unrealistic case schedules, and limited audits, are a few of the problems for consumers.”

Who else?

The federal Department of Justice asked for three delays in discovery for the state regulatory cases, but after the initial 2020 arrests Randazzo was the only additional individual to face federal criminal charges, and he is now deceased. Meanwhile, Ohioans remained on the hook for charges. So in Brown’s view, the delays made sure consumers continued to be victimized by the crime.

The state did file criminal charges earlier this year against former FirstEnergy executives Chuck Jones and Mike Dowling, along with Randazzo and companies he controlled, as well as Householder. Company lawyers previously identified Jones and Dowling as having paid the bribes behind HB 6. But it remains unclear whether they or others will ever face federal criminal charges, said Dave Anderson, policy and communications manager for the Energy and Policy Institute.

Anderson and others also have questions about the involvement of American Electric Power, which paid $900,000 to dark money groups that supported HB 6.

Blake, the AEP spokesperson, said “management does not believe that AEP was involved in any wrongful conduct in connection with the passage of HB 6.” 

Anderson rejects that notion.

“While AEP has not been charged with any crime in connection with HB 6, disturbing new details about the financial relationship between Householder and the utility emerged during the convicted former Ohio House Speaker’s trial last year,” Anderson responded. And the company also has acknowledged it may face civil penalties from a SEC investigation, he added.

“I don’t how AEP defines wrongdoing, but common sense should tell AEP’s customers and regulators that something stinks here,” Anderson said. “AEP owes ratepayers answers, and unfortunately the PUCO has completely failed to investigate AEP’s role in the HB 6 scandal.”

Some bright spots

As consumers continue to face consequences from HB 6, so do Householder and lobbyist Matt Borges, Turcer said. Both are in federal prison while they appeal their criminal convictions in federal court from last year.

FirstEnergy might have to allow some credits or pay penalties as a result of the four pending PUCO cases, Anderson noted. That would be in addition to a $230 million penalty paid to the federal government and class action settlements in a few court cases.

Quarterly reporting requirements under the deferred prosecution agreement of donations to nonprofit groups also may have reined in some of FirstEnergy’s political influence in Ohio, Anderson said. FirstEnergy spokesperson Jennifer Young said the company plans to continue reporting donations, even after the deferred prosecution agreement’s term ends.

Young also highlighted other company reforms including enhanced controls, separation of functions for its top ethics and legal officers and better transparency to stakeholders.

“Today, FirstEnergy is a different, stronger company with a sound strategy, a highly effective compliance program and a companywide culture of ethics, integrity and accountability,” Young said.

Yet the company’s claims about transparency have fallen short, Willis said. “Lawyered-up FirstEnergy… continues to block efforts to publicly disclose their internal investigation reports produced in the wake of the HB 6 scandal.”

Energy policy

Ohio’s energy policy continues to feel impacts from HB 6 as well.

“It does make me wonder where we would be with renewable energy if HB 6 had been completely repealed, or if there hadn’t been this orchestrated campaign, not just to bail out nuclear plants or subsidize coal plants, but also to diminish our commitment to renewable energy and our funding for renewable energy,” Turcer said. Yet now, “the air we breathe is actually dirtier.”

HB 6 “cast such a long shadow over energy policy in Ohio,” said Tom Bullock, executive director for the Citizens Utility Board of Ohio. The energy industry is going through the greatest change in a century, with technological innovations in how energy is produced and stored, as well as new business models, he noted.

“We need to be thoughtful, so that we can grow industry and keep prices affordable and convert to clean and smart and distributed energy,” Bullock said. Otherwise, “We’ll be the last in the Midwest to get there if the way we make energy policy decisions is based on the wish list from traditional energy interests.”

Consequences continue as bill at center of Ohio utility corruption scandal marks fifth anniversary is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

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Ohio utility regulators will continue to consider four FirstEnergy cases related to HB 6 separately, despite requests by the utility, customer advocates, and others to combine the cases. Meanwhile, intervenors say the timeline set in two of the cases puts them at a disadvantage as they struggle to keep up with several hundred thousand pages of discovery documents.

Other recent developments in Ohio’s ongoing utility corruption scandal include: 

• Text messages show Gov. Mike DeWine played a more active role in soliciting money from FirstEnergy than was previously known.
• A former FirstEnergy executive plans to call both DeWine and Lt. Gov. Jon Husted as witnesses at his criminal trial.
• Former Ohio House Speaker Larry Householder is advancing a new argument on appeal from his criminal conviction in federal court last year.

Piecemeal approach continues at PUCO

The Public Utilities Commission of Ohio is sticking with a piecemeal approach to four HB 6-related cases despite requests earlier this month from the company and challengers asking for different degrees of consolidation.

FirstEnergy wanted issues in three HB 6 cases to be considered together next year, and would have split a fourth case over whether the company improperly used ratepayer money to subsidize affiliated businesses, including FirstEnergy Solutions’ unregulated coal and nuclear plant operations.

The Office of the Ohio Consumers’ Counsel, Ohio Manufacturers’ Association Energy Group and several other parties urged the PUCO to consolidate all four HB 6 cases. In addition to the corporate separation case, one case requires FirstEnergy’s utilities to show ratepayer money was not used for charitable or political purposes, and the other two deal with the company’s use of funds from two riders. 

Regulators stayed all four cases in mid-2022 after a request from the federal prosecutor’s office. Administrative Law Judge Jacky St. John ruled last week that the commission would not order further consolidation beyond its combination of the two rider cases when the stay was lifted in late February. 

“The Commission is vested with broad discretion to manage its dockets,” she wrote, adding that more delay was not warranted.

Critics see the decision not to combine the cases as a missed opportunity for a big-picture review of FirstEnergy’s operations and governance in the wake of HB 6.

“I don’t understand the logic,” said Ashley Brown, a former PUCO commissioner. “It’s hard to find any public policy or private interest not to consolidate.”

Multiple cases also require duplicative efforts and increase legal costs. “The commission is making us try HB 6 cases multiple times,” said Kim Bojko, an attorney for the Ohio Manufacturers’ Association Energy Group. 

The PUCO “seems like it’s still piecemealing it and kicking some of the can down the road, while trying to fast-track the rest,” said Dave Anderson, policy and communications manager for the Energy and Policy Institute. He noted the commission’s limited approach to addressing the HB 6 case began under former PUCO chair Sam Randazzo, who died from an apparent suicide this spring after criminal indictments in federal and state courts, plus charges of legal ethics violations.

Read more:

• Eye on Utilities: All hush-hush (Energy News Network)
• Freeze of regulator’s HB 6 cases could further harm Ohio consumers (Energy News Network/Eye on Ohio)

A ‘punitive’ schedule

The PUCO set schedules in its June 21 orders which call for testimony in the rider cases to be filed in early August, with an evidentiary hearing set to start later that month. 

Testimony in the corporate separation case must be filed in September, with a hearing to start in October. The PUCO also said it would move ahead in that case without an additional audit on the HB 6-related issues. A 2021 report by Daymark Energy Advisors found no major violations of corporate separation, but noted the company hadn’t gotten numerous documents for the time period relevant to HB 6. 

An independent audit still has not been completed in the political and charitable spending case. That case doesn’t have a hearing date yet. 

Several intervenors have raised concerns about the pace, noting that it’s still unclear when pre-hearing fact-finding will wrap up. The commission put that process on hold for a year and a half after federal prosecutors asked for a pause in state regulators’ investigations as they pursued criminal cases related to HB 6.

FirstEnergy still has not produced all the documents parties in the four cases asked for nearly three years ago, because the PUCO didn’t require the company to comply with earlier document requests when it stayed the cases.

From February through mid-June of this year, FirstEnergy produced roughly 725,000 pages of documents. “We just got another 500 pages last week,” with more still to come, Bojko said. Yet now she and other parties will have to file witnesses’ testimony in roughly six weeks without knowing whether they’ll have all the documents.

“It’s punitive,” Bojko said, adding that lawyers for intervening parties are still scrambling to try to review the materials they’ve recently gotten. In her view, factors that frustrate intervenors’ ability to prepare their cases will work to FirstEnergy’s advantage.

Maureen Willis, agency director for the Office of the Ohio Consumers’ Counsel, said the office is evaluating the PUCO’s approach to the cases. 

“OCC will continue to advocate for a fair process that allows all the facts to come out,” Willis said.

FirstEnergy spokesperson Jennifer Young declined to comment due to the ongoing nature of the proceedings.

Read more:

• Regulators’ foot-dragging on public records hides the full story behind Ohio’s utility corruption scandal (Energy News Network/Eye on Ohio)

Spotlight on DeWine and Husted

Newly revealed documents show Gov. DeWine played a larger role in soliciting money from FirstEnergy executives than was previously known.

FirstEnergy and its affiliates gave roughly $4 million to dark money groups supporting DeWine and Husted’s 2018 campaigns. Less than a month before the election, DeWine texted Chuck Jones, then CEO of FirstEnergy, to set up a call. Three days later, Mike Dowling, then a FirstEnergy vice president, texted Jones to let DeWine know $500,000 was going to a dark money group called State Solutions.

Other texts recently obtained by journalists show Husted trading statements about Ohio energy policy with Dowling in the summer of 2018. Documents produced earlier show Husted also performed “battlefield triage” to assure the appointment of Randazzo to chair the PUCO.

DeWine claimed he didn’t remember the call. Spokesperson Dan Tierney told the Energy News Network the texts “all document legal campaign fundraising and independent expenditures,” which have been previously reported. “The Governor follows all applicable campaign finance laws,” he added. Husted spokesperson Hayley Carducci did not respond to Energy News Network’s request for comment.

The newly produced documents don’t show a bribe or quid pro quo, and neither DeWine nor Husted has been named as a defendant in any criminal or civil cases relating to HB 6.

However, the timing so close to the election raises questions, Anderson said, because DeWine’s campaign staff likely knew FirstEnergy executives and the company’s political action committee would already have reached their limits for direct campaign contributions. Under federal campaign finance law, candidates are not supposed to coordinate fundraising or other activities with groups that make so-called independent expenditures in political races.

Read more:

• ‘Call Mike DeWine on the $500k:’ Governor’s text sparked dark money payment, texts show (Cleveland.com)
• Phenomenally corrupt or insanely incompetent? What is Ohio Gov. Mike DeWine’s deal? (Ohio Capital Journal)
• Text messages link DeWine to FirstEnergy dark money payment (Dayton Daily News)
• Gov. DeWine says he doesn’t remember text soliciting FirstEnergy for campaign cash (Toledo Blade) 
• New texts allegedly show Ohio Lt. Gov. Jon Husted leading FirstEnergy’s push for House Bill 6 (News 5 Cleveland)

On the witness list

Dowling, the former FirstEnergy vice president, listed both DeWine and Husted as potential witnesses in a June 18 filing in the state of Ohio’s criminal case against him, Jones and two companies that were controlled by Randazzo. The two also have received subpoenas in civil cases filed by FirstEnergy shareholders.

Others on Dowling’s witness list include former American Electric Power executives Nicholas Akins and Tom Froehle. AEP holds the largest interest among Ohio electric utilities in the two 1950s coal plants that ratepayers continue to subsidize as a result of HB 6. An estimate by RunnerStone for the Ohio Manufacturers’ Association found Ohioans will pay nearly $1 billion for those subsidies through 2030.

Jones was also named as a defendant in the case against Dowling, along with Randazzo and two companies he controlled before his death. The state is still pursuing charges against those companies, said Steve Irwin, press secretary for Ohio Attorney General Dave Yost.

Read more:

• Ex-FirstEnergy executive lists DeWine, Husted as possible witnesses in bribery trial (Columbus Dispatch)
• FirstEnergy VP Dowling plans to call DeWine and Husted to the stand in corruption trial (News 5 Cleveland)

Householder and Borges appeals

Former Ohio House Speaker Larry Householder wants to add an argument to his appeal of a criminal conviction in federal court last year. A June 11 filing argues Judge Timothy Black erred in instructing Householder not to talk about his ongoing testimony while he was still under oath during an overnight break on March 1 last year. Householder’s lawyers did not object to the instruction, and the judge told Householder he could otherwise talk with his attorneys.

The government has objected to allowing the extra argument, first raised months after Householder’s initial brief of more than 16,000 words was filed in late February. Even if the court doesn’t allow the extra argument, a June 21 filing said the government still needs another four weeks to file its response.

Briefing in lobbyist Matt Borges’ appeal from his criminal conviction in last year’s federal trial should wrap up by the end of this month, unless his lawyers ask for more time to reply to the federal government’s brief.

Householder is currently serving a 20-year sentence, and Borges is serving a five-year sentence. Their appeals are pending before the Sixth Circuit Court of Appeals.

HB 6 Updates: Ohio regulators continue piecemeal review is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Ohio Gov. Mike DeWine’s claim to not know about the millions an Akron utility spent supporting his 2018 campaign for governor simply isn’t credible, an Ohio political scientist said in a recent interview. A spokesperson for DeWine pushed back.

FirstEnergy provided that support, then spent more than $60 million to pass and protect a $1.3 billion ratepayer-financed bailout that mostly benefited the utility. In 2019, DeWine signed the law within hours of its passage. 

But now that two GOP officials are in federal prison as part of the scandal and two others involved in the scheme have died by suicide, DeWine and Lt. Gov. Jon Husted are downplaying what they knew about FirstEnergy’s support for their campaigns. They’re also downplaying connections between their administration and the utility.

They say they supported the unpopular bailout because they thought it was good public policy to protect nuclear generation in Ohio.

However, a batch of records turned over in response to a records request by a group of news organizations — including Floodlight, the Energy News Network, the USA Today Network and the Capital Journal — are showing that the support they’ve gotten from FirstEnergy is greater than previously known.

Big, dark money

The company made donations totaling $1 million to 501(c)(4) dark money groups supporting Husted in 2018 before he dropped his gubernatorial bid and joined the DeWine ticket. The records also reveal that the company gave as much as $2.5 million to dark money groups supporting DeWine the same year.

Husted’s office wouldn’t say whether the lieutenant governor knew about the contributions at the time they were made. DeWine Press Secretary Dan Tierney last week denied that DeWine knew about the trove of newly revealed FirstEnergy contributions. 

University of Cincinnati political scientist David Niven said there’s a “zero-percent chance” that DeWine’s claim is true. He explained that in 2018, there was a nationwide backlash against the presidency of Donald Trump and support for Democrats was surging. That meant a “razor-wire thin” election for DeWine, a Republican running in a state Trump carried by eight points two years earlier, Niven said.

DeWine “was running in an election cycle when the tide was going against his party,” Niven said. “The notion that he was just this fumbling, naive grandpa who has no idea about seven-figure flows (supporting) his campaign is perhaps the single most far-fetched thing he’s ever said.”

There’s also the fact that it’s questionable for a company to make such a huge expenditure and not make sure the public official benefiting from it knew about it That seems especially true of FirstEnergy, which later admitted to paying an outright bribe of $4.3 million to Sam Randazzo just before DeWine nominated him to regulate the company and other Ohio utilities.

A state indictment of Randazzo and two former FirstEnergy executives says that on Dec. 18, 2018, the executives had dinner with Gov.-elect DeWine and Lt. Gov.-elect Husted and went from there to Randazzo’s condo to arrange the bribe. Randazzo, who was accused of helping to draft and lobby for the corrupt bailout, died by suicide earlier this month.

Return on investment

Tierney, DeWine’s press secretary, was asked last week why FirstEnergy would spend millions supporting his boss and not make sure DeWine knew about it. Tierney cited rules prohibiting dark-money groups from coordinating their activities with campaigns. 

“Regarding your question regarding why donors to independent expenditures might not engage candidates directly on the independent expenditures, my guess is that this goes back to the fact that it is illegal for candidates to coordinate with 501 (c)(4) independent expenditure groups,” Tierney said in an email. “I would guess that entities that frequently make such donations are aware of those legal restrictions. I don’t believe you were trying to accuse the Governor of illegal conduct, as he follows the law, but I would vociferously push back on any such innuendo as there is no basis for it.”

However, merely informing a candidate of a contribution to an independent group doesn’t seem sufficient to meet the state’s definition of “coordination.” That applies to communications “made pursuant to any arrangement, coordination, or direction by the candidate, the candidate’s campaign committee, or the candidate’s agent… ” the Ohio Revised Code says.

Some special interests have made pious claims that they spend millions supporting candidates not to buy influence, but because they wish to support good governance. Niven, the political scientist, said such a claim would be laughable in the context of FirstEnergy and Ohio’s 2018 gubernatorial election.

“This is all about return on investment,” said. “This isn’t even primarily about affecting the outcome of the election, it’s about affecting the behavior of the elected.”

And, Niven said, given that FirstEnergy’s expenditures in 2018 and 2019 won it a billion-dollar bailout, “The return on investment on this thing is spectacular.”

Who benefits?

In an email, Tierney questioned press coverage implying that groups supporting DeWine received all of the $2.5 million in dark money FirstEnergy put up in 2018. The donations were made to a dark money group affiliated with the Republican Governors Association, but only $500,000 was specifically labeled “DeWine.”

“… I am sure Ohio political reporters are laser-focused on Ohio matters, I would point out that FirstEnergy operates in seven states,” Tierney said. “Some of those states have Republican governors, others have had recent Republican governors, and even more have had competitive gubernatorial elections recently as well.”

However, of those states, only four — Ohio, Pennsylvania, New York, and Maryland — had gubernatorial elections in 2018. And of those, Ohio’s was by far the closest and thus the most likely to be affected by big expenditures. It’s also the the state that had two nuclear plants that FirstEnergy was desperate to bail out.

DeWine beat Democrat Richard Corday by 3.7 percentage points. The next-closest race was in Maryland, where Republican Larry Hogan beat Democrat Ben Jealous by 12 points — or more than triple the margin in the Ohio race.

In addition, among the documents obtained by the news organizations are messages that demonstrate FirstEnergy’s interest in plowing dark money into Ohio’s 2018 gubernatorial election. One, from FirstEnergy Vice President Michael Dowling, attempted to ease worries over the company’s massive expenditures through the Republican Governors Association to help DeWine and Husted.

“Theoretically, DeWine/Husted could have a balance of $10M in their campaign account and the RGA could spend $40M in support of DeWine in Ohio,” Dowling said in an email first reported by the Cincinnati Enquirer. “My point is that comparing the size of a contribution to the RGA to what the DeWine campaign has raised or what the DeWine Campaign’s current balance is can be done, but I’m not sure is logical.”

Other claims

In addition to pleading ignorance of FirstEnergy’s dark money, the governor and his staff haven’t explained what senior members of his administration who had close connections to the company knew about about a vital part of the scandal — the relationship between FirstEnergy and the man DeWine picked to regulate it.

The governor and his staff have claimed that connections between Randazzo and FirstEnergy were common knowledge when DeWine took office in 2019. However, there’s little evidence to support the claim. 

Meanwhile, Randazzo’s state indictment says Randazzo and FirstEnergy had a long, secret partnership that paid Randazzo millions even before his $4.3 million payoff in 2019. It also lays out evidence that both parties were anxious to keep it hidden. 

Throughout the scandal, DeWine and his staff have staunchly maintained that the governor supported the FirstEnergy bailout not out of any ulterior motive, but because he thought it was good public policy. To support that, Tierney last week pointed to the fact that Cordray, DeWine’s Democratic challenger, also supported keeping FirstEnergy’s nuclear plants open.

But there’s some important context. FirstEnergy gave dark money to support DeWine and oppose Cordray. In addition, DeWine’s chief of staff, legislative-affairs director and his choice to regulate the industry all had lucrative financial connections to the company either contemporaneously or in the recent past.

“It’s just laughable,” Niven said. “They find themselves in the literal center of the biggest corporate-political swindle in the state’s history and their answer is, ‘Well anybody would have done this.’”

Ohio Gov. Mike DeWine said he didn’t know of millions in FirstEnergy support. Is it plausible? is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

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Attorneys representing FirstEnergy shareholders say the company is needlessly dragging out pre-trial discovery by taking “up to eight bites at every apple,” while the death of a key figure in the Ohio’s House Bill 6 scandal underscores a growing sense of urgency among plaintiffs and prosecutors to gather evidence and testimony before it’s lost to time.

Here are the key developments since our last newsletter:

• Sam Randazzo, Ohio’s former top utility regulator, was found dead of an apparent suicide soon after a second criminal indictment and an ethics complaint were filed against him. FirstEnergy admitted in 2021 that it bribed Randazzo, although he denied liability.
• A newly revealed company email shows FirstEnergy gave $1 million to a group that supported Lt. Gov. Jon Husted’s 2017 gubernatorial campaign before he eventually became Gov. Mike DeWine’s running mate and worked behind the scenes to win support for the HB 6 power plant bailout. 
• A special master in the HB 6 shareholder cases recommends letting discovery move ahead for fact witnesses but delaying depositions of experts until after an appeals court rules on whether the litigation should move ahead as a class action.
• Larry Householder, the former Ohio House speaker currently serving a 20-year sentence in federal prison, faces additional charges in state court, including allegations about criminal activity even after his arrest on the federal charges in 2020.

Regulator’s death leaves questions unanswered

Columbus firefighters found Randazzo’s body April 9 during a wellness check after he missed a scheduled court check-in. Randazzo had faced state and federal criminal charges, including allegations of corruption and embezzlement. He also was a defendant in the state of Ohio’s civil action, in which the Ohio attorney general took action to freeze various assets.

Randazzo also faced disciplinary charges for alleged ethical breaches that could have cost him his law license after nearly 49 years as an Ohio lawyer. When Randazzo failed to answer those charges, the Ohio Board of Disciplinary Conduct had said it planned to make a finding of default and refer the case to the Supreme Court of Ohio.

Randazzo’s death makes it less likely the public will ever know the full extent of what actions he may have taken at FirstEnergy’s behest, both during the HB 6 scandal and in prior years, as well as how those actions may have increased charges for FirstEnergy utilities’ customers. 

Read more:

• Gov. DeWine, Lt. Gov. Husted won’t comment on Randazzo’s death amid largest corruption trial in Ohio history (News5/Cleveland)
• Ex-Ohio utility regulator Sam Randazzo could face discipline for breaking attorney rules (Columbus Dispatch)
• The 911 call requesting a wellness check for Sam Randazzo that led to his body being found has been released (WOUB)

FirstEnergy’s ‘Golden Boy’

Lobbyist and HB 6 co-defendant Neil Clark, whose 2021 death was ruled a suicide, once referred to Ohio Lt. Gov. Jon Husted as the “Golden Boy” for FirstEnergy. Newly revealed company emails obtained by a group of news organizations shed light on the utility’s relationship with the politician, including a $1 million payment to a dark money group that backed Husted’s 2017 campaign for governor.

Husted has not been charged with wrongdoing relating to HB 6, and a spokesperson said his campaign was not affiliated with Freedom Frontier, the group that received the $1 million. The spokesperson has not responded to other questions about when Husted learned about the donation or the group’s support for his first gubernatorial campaign.

The payment by FirstEnergy raises more questions about his behind-the-scenes actions to help the company get a bailout for struggling nuclear and coal plants. Also: What was Husted’s role at the December 2018 dinner with FirstEnergy executives just before they firmed up payment arrangements with Randazzo weeks before he became chair of the Public Utilities Commission of Ohio? 

Read more: 

• FirstEnergy gave $1 million to boost Ohio Lt. Gov. Jon Husted’s campaign before scandal, document shows (Energy News Network)
• FirstEnergy gave $1 million through dark money group to back ‘Husted Campaign’ (Cincinnati Enquirer)
• Ohio Lt. Gov. Husted won’t say if he knew about $1M dark-money contribution (Ohio Capital Journal)

Shareholders — and the public — want answers

Even before Randazzo’s death, the special master in FirstEnergy’s HB 6 shareholder cases noted how delays risk the further loss of evidence. “As time moves forward, memories fade, and this problem will likely worsen,” Special Master Shawn Judge wrote in a March 15 recommendation to let factual discovery resume in those cases.

“Moreover, as time has passed, potential witnesses [have] been indicted and one witness, Neil Clark, even committed suicide,” Judge added. Randazzo, who was not a party to the case, had fought against providing more documents and information before his indictments and subsequent death.

Fact-finding in the proceedings has been on hold since December 1, after FirstEnergy asked for a stay while appellate judges review whether the court properly let the litigation move ahead as a class action. Although Judge wants factual discovery to move ahead, he recommended continuing a stay on expert discovery, which could be affected by the higher court’s ruling.

Judge Algenon Marbley still needs to approve the special master’s recommendation, as well as his rulings on other issues, such as production of FirstEnergy’s internal investigation report.

Objections by FirstEnergy and other defendants prompted shareholders’ lawyers to complain in an April 8 filing that FirstEnergy was taking “up to eight bites at every apple” throughout the case, leading to unnecessary delays. “FirstEnergy is burying the Court in paper, making it near impossible for it to render decisions in a timeframe that would allow the merits of this matter to be decided in a timely manner,” they wrote.

Attorneys are not supposed to file motions solely for purposes of delay, although lawyers have an ethical obligation to represent clients diligently within the bounds of the law. Resolving each round of objections, motions for stay and requests for reconsideration takes time. 

“We are unable to comment on ongoing litigation,” said FirstEnergy spokesperson Jennifer Young.

Meanwhile in state court…

A March 29 filing by Ohio Attorney General Dave Yost details how prosecutors allege that former FirstEnergy executives Chuck Jones and Michael Dowling, together with Randazzo and companies run by him, engaged in a “largescale covert scheme” starting in 2010 to criminally corrupt the chair of the PUCO, steal millions from a utility company and a group of large energy users, fake a contract to cover up a side deal in a ratemaking case, and tamper with government records for financial and lobbying disclosures.

A potential witness list in the case includes current and former PUCO commissioners and other current and former FirstEnergy executives and lobbyists. Others on the list include Gov. Mike DeWine’s counselor and former chief of staff, Laurel Dawson, whose husband lobbied for FirstEnergy and who apparently received a 198-page dossier that warned about the company’s ties to Randazzo before he was appointed to the PUCO. DeWine has supported Dawson even as she has declined to comment on Randazzo’s appointment. Dawson’s husband also is on the witness list.

Lawyers for Jones and Dowling have asked the court to delay a status conference in the case from April 19 until May 2. Both also asked the court to let them take part via Zoom if Judge Susan Baker Ross requires their attendance.

Former Ohio House speaker Larry Householder also now faces state criminal charges. While the charges arise out of the HB 6 scandal, they are distinct from the federal charges for which he is now serving a 20-year sentence.

Some of the indictment’s ten counts include claims that Householder continued to engage in criminal activity even after his arrest on federal charges in July 2020, including an alleged theft of $1.2 million from a campaign fund. Conviction on a related theft-in-office count could bar him from serving again in public office in Ohio if he winds up being released from federal prison.

In another twist, Dave Wondolowski, the grand jury foreperson who signed the Householder indictment, is known to have been a supporter of HB 6. Data from OpenSecrets also show the union Wondolowski leads gave $14,000 to Householder’s campaign in the 2019-2020 election cycle.

Read more: 

• DeWine’s adviser knew about a $4.3M payment to Randazzo. She isn’t answering questions (Columbus Dispatch)
• Editorial: Widen corruption probe (Toledo Blade)
• New charges filed against ex-Ohio House Speaker Larry Householder (Columbus Dispatch)
• Cuyahoga County grand jury foreperson lobbied publicly for House Bill 6. Why was he allowed to hear case against Larry Householder? (Cleveland.com)

HB 6 Updates: ‘As time moves forward, memories fade’ is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.