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“Holy mackerel,” wrote John Swez, Duke Energy’s director for generation dispatch, in a recently released company email about losses from the old coal plants subsidized by House Bill 6, Ohio’s coal and nuclear bailout law. Critics say that and other emails show utilities knew the coal plants were run in a way that increased their losses and the resulting costs to consumers.

“Holy mackerel” can also apply to other developments in Ohio’s ongoing corruption scandal. Among other things:

• The case on coal plant charges also shows how overbroad confidentiality claims compound challengers’ problems in contesting allegedly unlawful and unreasonable charges.
• An 18-month stay on four HB 6 regulatory cases ended, but new issues have led parties to ask the Public Utilities Commission of Ohio to push out the schedule until criminal claims are resolved.
• A firm timetable has not yet been set in the state’s criminal case against former FirstEnergy executives Chuck Jones and Michael Dowling and former PUCO chair Sam Randazzo. Prosecutors are expected to produce roughly 100,000 documents to the defendants. Meanwhile, questions remain for the DeWine administration.
• Lawyers for former Ohio House speaker Larry Householder briefed their arguments for reversing his criminal conviction.
• A newly released email shows American Electric Power insisted on including coal plant subsidies in HB 6. An end to those subsidies could impact the company’s finances, its latest annual report says.

Coal plant costs

“Holy mackerel,” wrote John Swez, Duke Energy’s director for generation dispatch, in an April 2020 email. The recently released message came in response to losses for the two 1950s-era coal plants subsidized by HB 6, known as the OVEC plants. That and other emails in the chain show Duke Energy executives and others were told at the time that it was more expensive to run the coal plants continuously, rather than only when market conditions would let them break even or make a profit.

The Ohio Manufacturers’ Association Energy Group quoted from the emails in a March 5 brief, urging regulators to find more than $100 million in costs passed on to ratepayers for that year were imprudent and unreasonable. The Office of the Ohio Consumers’ Counsel likewise cited the emails, saying they “shine a clear spotlight on what the actors were thinking when the events unfolded.”

The emails highlight how utilities often assert overbroad claims for confidentiality. Duke Energy Ohio claimed everything in the emails was confidential all through pre-hearing fact finding, called discovery, and during an evidentiary hearing, too.

Only afterward did the hearing examiner tell lawyers for Duke, American Electric Power and AES Ohio to reconsider their broad confidentiality claims in the case. That led to filing of a publicly available redacted version of the Duke emails in late January. Earlier work by the Checks & Balances Project highlighted other confidentiality claims for information in an audit report that were already publicly available.

The two subsidized coal plants continue to lose more than half a million dollars daily, according to the Office of the Ohio Consumers’ Counsel. Since 2020 began, ratepayers have paid roughly $250 millionfor the plants under HB 6. Leadership in Ohio’s General Assembly has blocked votes on bills to repeal the coal plant subsidies.

Read more: 

• Ohio ratepayers shouldn’t have to pay for money-losing coal plants (Union of Concerned Scientists)
• Corruption tax? Policy expert says that’s basically what Ohio utility consumers have been paying (Ohio Capital Journal)
• HB 6 coal plant charges mount up again in Ohio (Energy News Network)

Putting on the brakes — again

The Public Utilities Commission ended an 18-month freeze of four HB 6-linked FirstEnergy cases last month. “The PUCO will continue to follow the facts wherever they may lead,” said Chair Jenifer French just before the prior stay order expired.

The Feb. 26 orders put three of the cases on a fast track for evidentiary hearings to start in June and July. However, the orders did not allow enough time for challengers to conduct discovery. And because of the commission’s complete freeze of the cases for 18 months, FirstEnergy still hasn’t produced hundreds of thousands of pages of documents, said a joint March 4 filing by the Office of the Ohio Consumers’ Counsel and the Ohio Manufacturers’ Association Energy Group.

A Feb. 29 letter from lawyers at the Ohio Attorney General’s office poses more problems. In it, the attorneys suggested an Ohio statute could provide former FirstEnergy executives Chuck Jones and Michael Dowling or former PUCO chair Sam Randazzo with immunity from criminal prosecution if they were forced to testify in the regulatory cases. All three are defendants in a criminal case filed by the state last month.

The statute’s language suggests the state’s lawyers have a legitimate concern, said Michael Benza, a criminal law expert at Case Western Reserve University School of Law. Moreover, the law’s language describes what’s known as transactional immunity. It’s very broad and “prevents all prosecutions under the umbrella of what the person testified to,” Benza said.

After the letter was filed, the PUCO ruled that any outstanding or requested subpoenas for Jones or Dowling would not go forward. The Consumers’ Counsel agreed not to require testimony from them or Randazzo before their trials in the criminal cases.

However, making challengers move ahead without a full opportunity for discovery would deprive them of due process rights, the Consumers’ Counsel and the manufacturers’ group argued.

Instead, they asked the PUCO to postpone the hearings until after completion of the current criminal cases and a fair opportunity for discovery. Meanwhile, regulators should require FirstEnergy to finish outstanding document production, they said.

One of the three cases deals with corporate separation requirements under Ohio law. FirstEnergy would have violated those requirements if it diverted ratepayer money from regulated Ohio utilities to benefit its former unregulated subsidiary, FirstEnergy Solutions.

Another case deals with a credit support rider that was held unlawful by the Ohio Supreme Court more than two years after FirstEnergy started collecting roughly $450,000 from ratepayers. The court ruled the unlawful charges are not refundable. However, problems noted in the audit and by other parties in the case could subject FirstEnergy to up to $1.4 billion in penalties.

A third case deals with a “delivery capital rider.” An audit found that millions of dollars which appear linked to the HB 6 scandal were improperly charged to ratepayers. FirstEnergy is looking to extend and increase that rider’s charges in a separate regulatory proceeding.

The fourth HB 6-linked case is a broader inquiry into whether FirstEnergy unlawfully used ratepayer money for political or charitable purposes. There is no evidentiary hearing scheduled yet. An audit report is now due from the accounting firm Marcum in late August.

Although using ratepayer money for political purposes is already unlawful, HB 444, introduced March 8, would require refunds and add new fines for violations.

Read more: 

• Ohio AG to PUCO: HB6 subpoenas could let Randazzo, FirstEnergy execs escape prosecution (Cleveland.com)
• Ohio AG and utility consumer rights counsel call for a halt to renewed PUCO HB6 hearings (Crain’s Cleveland Business)
• Ohio State Representatives introduce bill to stop utility providers from passing lobbying costs onto customers (WFMJ)

Ongoing criminal cases

A firm timetable has not yet been set in the state’s criminal case against Chuck Jones, Michael Dowling and Sam Randazzo, who have all pled not guilty to charges of bribery, theft, money laundering, telecommunications fraud, record tampering, and a pattern of corrupt activity. Filings in the case show where state prosecutors are expected to produce roughly 100,000 documents to the defendants. It’s also unclear when the federal government’s case against Randazzo will go to trial, or whether there will be more federal or state charges against others.

On Feb. 16, the Ohio Attorney General’s office asked a Franklin County court for a full stay on its HB 6 civil case against the three defendants, FirstEnergy and others. No party has opposed the motion, which argues that the state’s case against any defendant could hinge upon discovery from the others. Judge Chris Brown might still rule on multiple motions to dismiss or for partial summary judgment.

Gov. Mike DeWine’s administration also faces increased public scrutiny, with critics calling for a broader corruption probe. DeWine claims he didn’t know about the $4.3 million payment from Randazzo to FirstEnergy shortly before his appointment to the PUCO. Yet allegations in the indictment state that his former chief of staff, Laurel Dawson, knew about the payment.

Dawson’s husband had been a lobbyist for FirstEnergy, and she still works as an advisor to DeWine. His former legislative affairs director, Dan McCarthy, had been president of a nonprofit allegedly used to funnel funds from FirstEnergy to dark money groups controlled by Householder.

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)
• Ohio Gov. Mike DeWine stands behind aide while she stays mum about bribery scandal (Ohio Capital Journal)

Arguments on appeal

Lawyers for former Ohio House speaker Larry Householder briefed their arguments for reversing his conviction in the federal government’s HB 6 criminal case last year. Defense lawyers claimed federal prosecutors tried Householder as “a scapegoat for what it viewed to be a corrupt piece of legislation supported by undisclosed campaign contributions,” which they claimed were protected under the First Amendment.

“If using laundered bribe money from a major power company like FirstEnergy to pay off a legal settlement against your failed coal mining business is free speech, then our democracy is doomed,” said Dave Anderson, energy and policy communications manager for the Energy and Policy Institute.

Householder’s brief claimed the trial court erred in multiple ways, including its rulings on the admissibility of various pieces of evidence, the sufficiency of the evidence, jury instructions and dismissal of a juror. Other issues include the length of the 20-year sentence and a claim about the judge’s impartiality.

To get a reversal of their convictions, Householder and Borges, whose appeal is a separate case, must convince the Sixth Circuit Court of Appeals that the trial court erred in ways that adversely affected their defenses. The government’s response to Householder’s brief is due March 27, unless an extension is granted. The government’s brief in the Borges appeal is due April 8.

Read more: 

• Former Ohio Speaker Larry Householder files appeal, says bribe payment was within First Amendment rights (News 5)
• ‘Knowing winks and nods’ don’t prove Larry Householder was bribed, attorneys argue in appeal (Cleveland.com)

Material impact?

American Electric Power’s latest annual report, filed last month, warned shareholders that HB 6’s coal plant subsidies are under added scrutiny. AEP owns a larger share of OVEC than other Ohio utilities and noted that a repeal of the subsidies could impact its income, cash flow and financial condition.

AEP insisted on those subsidies, as shown by a recently released email from former chief operating officer Lisa Barton to Dowling at FirstEnergy. Charges for the coal plants like those for FirstEnergy’s nuclear plants were “essential” for support for HB 6, she wrote. Publicly, however, Barton and AEP touted the company’s renewable energy goals, as shown by remarks she made in 2020.

AEP’s annual report for 2022 had said its management “does not believe that AEP was involved in any wrongful conduct in connection with the passage of HB 6.” Now, its 2023 annual report says, the company has formed an independent committee to investigate whether actions by the directors or officers breached their fiduciary duties to the company. “Management is unable to determine a range of potential losses that is reasonably possible of occurring,” the report said.

The report also shows the company hopes to soon resolve possible claims by the Securities and Exchange Commission related to HB 6. The investigation has included testimony and information relating to Empowering Ohio’s Economy, a group that got about $8.7 million from AEP from 2015 through 2020. About $900,000 went from Empowering Ohio’s Economy to other groups linked to the HB 6 scandal.

Read more: 

• AEP hopes to resolve federal investigation into House Bill 6 role as it seeks new CEO (Columbus Dispatch) 

“Holy mackerel!” Emails shine light on money-losing coal plants 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’s public advocate for residential ratepayers wants the state’s high court to reverse a decision that blocked it from fully participating in a case it says adversely affected the rights of more than 1,000 people living in apartments.

The Ohio Consumers’ Counsel was denied intervenor status in a Public Utilities Commission of Ohio (PUCO) case over whether a company that provides billing and other electricity services for landlords is acting as a utility.

AEP Ohio accused the electrical submetering company Nationwide Energy Partners of usurping part of its role and offering services that infringed on its territory as a regulated, public utility.

The PUCO ruled last year in Nationwide’s favor, essentially stripping residents of five properties from several consumer protections and benefits that state law provides for utility customers. 

The consumer advocate has appealed the decision to the Ohio Supreme Court, saying that regulators should have let it represent the interests of the apartment residents.

The case now before the Ohio Supreme Court began in late 2021 when AEP Ohio objected to a request that it drop nearly 1,100 residential accounts for people living in five Columbus-area apartment complexes. Nationwide would buy electricity for each complex from the utility and resell it to residents at a higher rate. 

“From the customers’ perspective, Nationwide would be stepping into the shoes of AEP Ohio,” the complaint alleged. As such, it would be “mimicking a public utility and doing exactly what AEP Ohio currently does.”

The Consumers’ Counsel moved to intervene so it could represent the interests of the residents, who were not otherwise represented in the regulatory case. Nationwide objected, casting the case as just a commercial dispute.

While anyone can submit public comments in utility regulatory cases, formal intervenors become parties to the case and have a full seat at the table. The status includes rights to conduct pre-hearing fact-finding, brief legal issues, introduce evidence, and present or cross-examine witnesses.

Ohio Consumers’ Counsel Maureen Willis said utilities, marketers and submetering companies “will face far less resistance to their proposals” if the agency is precluded from doing its job. An Ohio statute says that job includes intervening in and representing residential consumers’ interests at the PUCO, in court and before other agencies.

What the tenants are losing

The PUCO “typically” grants the Consumers’ Counsel’s requests for intervention, said Ohio Deputy Consumers’ Counsel Angela O’Brien. “That being said, intervention by OCC is our statutory right and one that we closely guard in order to give consumers a voice on utility issues that matter to them,” she said. 

In this case, a 2022 PUCO order denied the Consumers’ Counsel’s motion to intervene. Interests in protecting consumers were “not the issues that will be litigated in this proceeding,” the order said. The commission ruled in September 2023 that Nationwide is not a public utility and reaffirmed its decision in December 2023.

Ashley Brown, a former PUCO commissioner, said it was “crazy” for regulators to keep the Consumers’ Counsel out of the case. The ruling that Nationwide is not a utility “create[s] this inferior species of consumer at the whim of the landlord,” he said.

Among other things, a forced switch of tenants away from utility service makes them give up their rights under metering rules, eligibility for percentage-of-income-payment plans (PIPP), procedures required before shutoffs, access to the PUCO’s call-in line and procedures for filing complaints against regulated electric companies, and more. Ratepayers of regulated electric distribution utilities also have a general right to choose a competitive electricity generation supplier.

The PUCO ruling also means residents won’t be guaranteed the right to benefit from time-of-day rates or other demand-side programs that could improve grid reliability, Brown said. Similarly, tenants won’t be eligible for utilities’ energy efficiency programs if pending legislation clears the way for those to start up again after the state’s 2019 nuclear and coal bailout law gutted Ohio’s prior clean energy standards.

Similar issues are presented in another regulatory case involving Duke Energy and Nationwide Energy Partners. The PUCO has not yet ruled on the Consumers’ Counsel motion to intervene there. Duke Energy Ohio supports the Consumers’ Counsel’s participation, while Nationwide opposes it.

AEP Ohio has sided with the Consumers’ Counsel, saying a forced switch will cause customers to lose rights they’ve had as ratepayers.

“We believe all customers in our service territory should be able to easily understand their bill and get all of the same regulatory protections when offered utility service by someone other than their landlord,” said spokesperson Scott Blake, adding that submetering companies generally don’t make the same types of low-income help available to residents.

What happens next

AEP Ohio has a separate appeal pending at the Ohio Supreme Court, where it challenges the PUCO’s finding that Nationwide is not a regulated utility. AEP Ohio also challenges parts of the PUCO’s order requiring it to place consumer-protection conditions in its contract with Nationwide. AEP Ohio’s filing describes those conditions as unworkable, unreasonable and unlawful, adding that any tariff requirements should be adopted through notice-and-comment rulemaking.

On Feb. 23, Nationwide moved to intervene in the Consumers’ Counsel’s appeal to the Ohio Supreme Court, as well as in AEP Ohio’s appeal. If the Consumers’ Counsel wins, Nationwide “will be forced to incur the cost of expensive and unnecessary re-litigation of the issues already decided by the PUCO,” lawyers for the company wrote.

“Unfortunately, we cannot comment on open dockets,” said Teresa Ringenbach, Nationwide’s vice president of business development, when asked if the company would have dropped its opposition to the Consumers’ Counsel’s intervention if it knew a denial would lead to the appeal before the state supreme court. She did say Nationwide is prohibited from offering PIPP for tenants, but some other payment assistance programs may be available.

“The commission speaks through its opinions and orders and other rulings,” PUCO spokesperson Matt Schilling said when asked for comment. “Each case is heard on its own merits on a case-by-case basis,” based on Ohio law and rules, he added.

The Consumers’ Counsel represents residential ratepayers in hundreds of cases, but the AEP Ohio and Duke submetering cases are not the only instances where it has been denied participation. A September 2023 ruling kept the Consumers’ Counsel from intervening in a case dealing with a $5.2 million increase in AEP Ohio charges to ratepayers to cover low-income assistance programs. 

The Consumers’ Counsel was also initially excluded from a case to settle price gouging claims, where some customers’ monthly bills were nearly $700 per month. The PUCO’s initial December 2023 order said the case involved “the resolution of fact-specific issues between Staff and Inspire Energy and only those issues.” The Consumers’ Counsel pushed for reconsideration, and the commission reversed that ruling on Feb. 7.

In Brown’s view, the Consumers’ Counsel should have had full party status from the get-go in both the price gouging case and the submetering case. 

“The whole idea of having a public utilities commission is that things are open, they’re transparent, they’re participatory. You give consumers access,” Brown said.

Karin Nordstrom, an attorney with the Ohio Environmental Council, said Ohio law favors broad intervention in PUCO matters. Also, she said, “consumers must have access to reliable utility service as we face more severe weather due to climate change.” Without discussing the merits of any particular case, she added that a well-funded consumers’ counsel with access to experts “is an imperative component of maintaining a fair and transparent utility process.”

For now, the Consumers’ Counsel’s brief in the submetering case is due at the Ohio Supreme Court later this month. That date might shift if a motion for extension is filed or if the Ohio Supreme Court consolidates the case with AEP Ohio’s appeal.

Ohio utility regulators’ decision disenfranchised apartment renters, consumer advocate says 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.

An Ohio judge has dismissed environmental groups’ appeal from commission decisions to lease parts of a state park and two wildlife areas for oil and gas drilling.

Judge Jaiza Page’s Feb. 23 order effectively denies the emergency stay the environmental groups had sought to stop the Ohio Oil and Gas Land Management Commission from acting on Monday to accept bids from companies to drill and frack under Salt Fork State Park, Zepernick Wildlife Area and Valley Run Wildlife Area.

Starting in January, the Ohio Oil and Gas Land Management Commission solicited bids from companies to drill and frack under the state park and wildlife areas. The commission is expected to act on bids at its Feb. 26 meeting.

Judge Page’s eight-page decision agreed with the commission that the court lacks jurisdiction over the appeal. She also agreed with the commission’s argument that the groups have no standing to contest its rulings.

“We are disappointed with the Court’s order. We are considering next steps with our clients,” said attorney Megan Hunter of Earthjustice, which has acted as counsel for Save Ohio Parks, the Ohio Environmental Council, the Buckeye Environmental Network and Backcountry Hunters and Anglers.

Energy News Network reached out to spokespeople for the Ohio Attorney General and the Ohio Oil & Gas Land Management Commission, but they have not yet provided comments.

Judge Page’s order noted the word “shall” in one part of ORC Ch. 155, suggesting the commission has a mandatory duty to lease state park lands. Yet she did not mention at all the requirement in another part of the law that says the commission “shall” consider nine factors in deciding whether to allow drilling on state-owned lands.

A key part of the environmental groups’ challenge was that the commission failed to consider all nine factors the law required it to consider. Those include environmental impacts, effects on visitors or users of state-owned lands, public comments or objections, economic benefits and other considerations.

The commission’s proceedings also have been clouded by the submission of hundreds of allegedly falsified pro-fracking comments. The commission announced in September that it would not consider those comments. But results of an investigation by the Ohio Attorney General’s office have not yet been announced.

It’s also unclear whether the commission considered and properly weighed concerns voiced by opponents of the leasing, whose comments raised worries about possible contamination from accidents, anticipated interference with their ability to enjoy state parks and wildlife areas, and more.

A separate case challenges the constitutionality of House Bill 507, the law passed by Ohio’s General Assembly late last year to kickstart the commission’s leasing process. The law also declared that natural gas is “green energy.” That case is before Judge Kimberly Cocroft.

In the HB 507 case, the state argued the constitutional challenge case is moot because the commission’s adoption of leasing terms meant there was no longer any mandatory duty to allow drilling on state-owned lands.

It’s unclear whether appellees will appeal Judge Page’s order or if another motion for stay will be filed. It’s also unclear when Judge Cocroft will rule.

Companies submitting any winning bids accepted by the commission will need to file a permit application with the Ohio Department of Natural Resources. The agency reviews those permits fairly quickly, so drilling could start this spring.

Court dismisses appeal to block drilling and fracking under Ohio park and wildlife areas 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.

A property-tax alternative chosen by an Ohio county will likely give it more total financial benefits from a proposed solar project than the property tax option would, according to an independent academic analysis.

The Ohio State University analysis undercuts recent claims by critics who have alleged the payments in lieu of taxes, or PILOT, plan for the 120 megawatt Frasier Solar project is a bad deal for Knox County.

Instead, the arrangement would boost the county’s revenue under all but one scenario evaluated by economics professor Brent Sohngen, who has been researching the economics of solar development and looked at the numbers after hearing about the debate.

The study is in contrast to an analysis in November by the conservative Buckeye Institute, which said the plan would “shortchange taxpayers.” 

But Sohngen, who has not taken a position on the project itself, said the Buckeye Institute declined to provide the data underlying its assumptions.

“As an academic, it’s my job to help explain the numbers, which is all I’m trying to do here,” Sohngen said. “The local community has a tough decision, but it’s made tougher when they are faced with confusing data and analysis where some of the proponents won’t even provide the basic data they are using.”

Benefits to both sides

Ohio’s program for payments in lieu of taxes allows developers or owners to remit payments to local governments which are generally level over the useful life of an energy project. Property tax amounts, in contrast, start out high but decrease over time due to depreciation.

Ohio lawmakers passed legislation last year extending counties’ ability to choose the arrangements. Solar and other energy projects can qualify if they meet certain criteria. Among other things, 70% of a solar project’s workers must be Ohio residents. Developers or owners of projects larger than 20 MW must also repair roads, bridges or culverts affected by construction.

The arrangements can provide financial benefits for both solar project developers and for counties. 

A project developer or owner can avoid very high payments in the first few years of operation, reducing costs and the prices they can charge for electricity. In return, counties get predictable payments, which can help in budgeting. 

Importantly, the payments also don’t reduce local governments’ needs-based education funding like property taxes would, Sohngen said. Solar developer Open Road Renewables estimated those cuts would come to about $8.5 million over the life of the Frasier Solar project.

Crunching numbers

Knox County’s commissioners unanimously approved the alternative payments for the Frasier Solar project last August. An analysis filed with the Ohio Power Siting Board last October shows the county will get approximately $1,080,000 annually for roughly 40 years. That time period is the project’s estimated life span.

Other materials filed by the company with the siting board show the payments would give the county $4.6 million more than property taxes would over the life of the project, with revenue exceeding estimated property taxes by year 16.

The Buckeye Institute faulted Open Road Renewables for not including a net-present value cash-flow analysis with its siting board filings. That would deal with the concept that $1 today is worth more than $1 in the future. The Buckeye review also suggested the payments wouldn’t break even with property taxes until the end of the project.

The Buckeye Institute generally sees the alternative payments as “a form of subsidy through near-term tax breaks to renewables,” said Trevor Lewis, who co-authored the Buckeye report with Rea Hederman. Comments filed by the group with the federal Office of Management and Budget had also urged it to use a higher discount rate for the value of money collected in the future, he said.

The Buckeye Institute analysis was cited at a Nov. 30 meeting held by Knox Smart Development. Jared Yost, who incorporated that opposition group in November, has said it’s a grassroots group but it does not want to disclose who its funders are. Speakers at the November meeting had multiple ties to fossil fuel interests, the Energy News Network found.

Counties generally don’t consider net present value for budgeting purposes, said Cyrus Tashakkori, president of Open Road Renewables. The company also pointed out to the Buckeye Institute that its analysis left out cuts in needs-based school funding if the county had picked property taxes instead. The school funding issue makes the payments worth more to the county, even when net present value was considered, he said.

“They got it wrong. And then instead of just correcting it, they very publicly doubled down,” said Tashakkori.

The Buckeye Institute’s December update noted the criticism, questioned the certainty of future school funding, and repeated its stance that alternative payments were not a “clear winner.” A Feb. 12 response to Sohngen’s analysis pushed for using a higher discount rate for the time value of money and anticipated inflation, even while acknowledging that it was above the rate in revised federal guidance last year.

“They won’t send anyone their underlying data, nor will they explain how they got it, so there is not much else one can do with their work other than wonder why they won’t provide it,” said Sohngen, who contacted the Buckeye Institute before publishing his work. 

Only in one scenario did Sohngen find property taxes would be “modestly” better for the county. However, that scenario wasn’t consistent with current federal guidance, and it assumed interest rates that haven’t been seen for decades, Sohngen said. 

“It was refreshing to see honest analysis by an expert confirmed what we had known based on our analyses,” said Craig Adair, vice president for development at Open Road Renewables.

Sohngen said no one from Open Road Renewables asked him to do his analysis, and Adair confirmed that.

Opportunity costs

Confusion about how solar projects will help local governments can increase negative perceptions, wrote Doug Bessette and others in this month’s issue of Energy Research and Social Science. Bessette heads the Energy Values Lab at Michigan State University’s Department of Community Sustainability. Better communication can help reduce confusion, the researchers suggested.

“The fact that Brent Sohngen’s calculations are all provided for readers and can be easily replicated if they choose to do so is the best we can ask for,” Bessette said. Different parties’ values and concerns can affect how people choose discount rates, but some quantitative analysis can help keep discussions focused on facts, he added.

Opportunity costs also matter. Ohio law taxes agricultural land at substantially lower rates than for residential or commercial property. The land for the Frasier Solar project currently generates only about $21,000 per year in property taxes.

“So whether you go the tax revenue approach or the PILOT approach, it’s far more money” for the county, Sohngen said. Open Road Renewables estimates the payments in lieu of taxes would bring the county more than 40 times as much revenue as it currently gets for the project’s proposed land area.

“Not deciding to go forward on a solar project is a choice. And that choice has consequences,” Bessette said. When neighboring counties adopt solar and increase revenue, they can use it to build better schools, hire more teachers or improve other local services. And communities that choose not to increase their revenue will ultimately lose out, he said. “You don’t want a race to the bottom.” 

With that said, addressing the positive and negative impacts of large-scale solar projects still presents challenges.

“Ensuring developers and local officials thoughtfully consider the costs and benefits of a proposed project is a good thing, not a bad thing,” Bessette said. “And making sure residents have an avenue to voice their concerns is crucial, as long as those concerns aren’t fictions. It’s just that it’s getting harder and harder to distinguish fiction from reality.”

Ohio county sees dueling studies on solar project payments, but only one disclosed its data  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.

This monthly newsletter provides updates on Ohio’s ongoing utility corruption scandal. Was this forwarded to you? Click here to subscribe.

The first criminal charges have been filed against two former FirstEnergy executives, nearly four years after the initial arrests of former Ohio House speaker Larry Householder and others in Ohio’s ongoing House Bill 6 corruption scandal. The company says it has taken significant steps to move forward. Yet issues related to HB 6 continue to play a role in the company’s push to raise ratepayer charges, ongoing shareholder litigation and more.

A flurry of filings over the last several weeks reflects additional developments:

• Sam Randazzo, the former head of Ohio’s utilities commission, was also named in the state of Ohio’s indictment against former FirstEnergy executives Chuck Jones and Michael Dowling. Randazzo now faces criminal charges in both state and federal courts.
• Ohio’s consumer advocate wants to freeze a FirstEnergy grid modernization case until questions are resolved about Randazzo’s tenure at the Public Utilities Commission of Ohio.
• Briefing wrapped up in an Ohio regulatory case that could let FirstEnergy collect $1.4 billion or more in added rider charges over an eight-year period.
• FirstEnergy continues to be under fire in shareholder litigation, where opponents say it has dragged its feet on providing its internal HB 6 investigation and other disclosures.
• FirstEnergy has dropped its pledge to cut greenhouse gas emissions 30% by 2030, just three years after making that commitment.
• Former Ohio House Speaker Larry Householder and lobbyist Matt Borges continue to pursue appeals from their criminal sentences. Borges filed his appellate brief in January, and the government’s reply is due next month.

Former FirstEnergy execs face charges

The state of Ohio’s Feb. 9 indictment against former FirstEnergy executives Chuck Jones and Mike Dowling marks the first time anyone from the company has been criminally charged in connection with the corruption scandal surrounding Ohio’s 2019 nuclear and coal bailout law.

Sam Randazzo, the former chair of the Public Utilities Commission of Ohio, was also charged, along with two pass-through companies linked to him. The story told by the 27-count indictment centers around the three men’s alleged “joint enterprise to hijack Ohio’s regulatory structure for the benefit of FirstEnergy,” Ohio Attorney General David Yost said.

The charges include multiple counts of bribery, theft, money laundering, telecommunications fraud, record tampering, and a pattern of corrupt activity. The allegations relate to House Bill 6 but also include other actions reaching back more than a decade.

The first criminal charges against Jones and Dowling are “critical and long-overdue steps forward in bringing justice for the people of Ohio,” said Rachael Belz, CEO of advocacy group Ohio Citizen Action. Federal charges against former Ohio House Speaker Larry Householder and others were filed nearly four years ago. Yet the state’s criminal prosecution seemed to be in slow gear until last spring, when the Ohio Organized Crime Investigations Commission began looking into the matter.

“Ohioans continue to bear the cost of corruption,” Ohio Consumers’ Counsel Maureen Willis said in response to the charges. She called for an immediate end to HB 6’s coal plant subsidies and a refund of all amounts paid.

The indictment also spurred the Ohio Environmental Council to renew its call for a full investigation into PUCO activities during Randazzo’s tenure. Beyond the 2019 law’s nuclear and coal plant subsidies, Randazzo played a role in HB 6’s gutting of Ohio’s clean energy standards. The charges have implications for current energy policy, too.

“Just this month, Ohio legislators debated allowing investor-owned utilities to own more generation under the guise of ‘reliability,’” said Nolan Rutschilling, managing director of energy policy for the group. “How can we justify giving our utilities more control over our energy system?”

The defendants have pled not guilty.

Read more: 

• Ohio AG Yost announces additional indictments in House Bill 6 bribery scandal (Spectrum News)
• Ohio AG announces indictments for ex-FirstEnergy execs, Randazzo in House Bill 6 scandal (Columbus Dispatch)
• New indictments announced in House Bill 6 scandal (19 News)

Randazzo charged in two cases

The state’s indictment means Randazzo now faces charges in two criminal cases. The federal government indicted him in December on 11 counts of bribery, embezzlement and other crimes. It’s unclear whether both cases will proceed against Randazzo at the same time, or whether one case will be put on hold while the other moves ahead.

A Feb. 13 notice in the state’s civil RICO lawsuit arising out of HB 6 told Judge Christopher Brown about the new criminal charges against Jones, Dowling, Randazzo and his companies. It’s possible the court might put the civil case against those defendants on hold, but let it continue against FirstEnergy, Energy Harbor and other defendants.

Just weeks before the new indictment, the Ohio Supreme Court said the Ohio Attorney General’s office could continue to freeze millions of dollars of Randazzo’s assets, which could be used to satisfy a judgment against him in the state case.

On Feb. 9, Randazzo asked the U.S. District Court for the Southern District of Ohio to transfer his criminal case from Cincinnati to Columbus. He cited health issues and inconvenience to himself, witnesses and family members as reasons for the shift.

The Feb. 9 filing also said likely witnesses in the federal case include current and former PUCO commissioners and staff, members of the Ohio executive branch, former state lawmakers, and current and representatives of FirstEnergy and Industrial Energy Users-Ohio (now called the Ohio Energy Leadership Council). 

The state’s indictment, filed that same day, alleges Randazzo told Gov. Mike DeWine’s chief of staff, Laurel Dawson, he got a $4.3 million payment from FirstEnergy due to a “consulting agreement.” DeWine and Lt. Gov. Jon Husted dined with Dowling and Jones the same day the FirstEnergy executives visited with Randazzo and finalized details of that payment.

Read more:

•  Ex-First Energy executives, Ohio utility regulator charged by state in bailout and bribery scandal (Ohio Capital Journal)
• DeWine’s chief of staff testified to grand jury in bribery case, spokesman says (Cleveland.com)
•  Ohio Supreme Court OKs freeze on millions from ex-state official Randazzo after bribery accusation (Cleveland.com)
• Ex-PUCO Chair Sam Randazzo requests to move criminal trial from Cincinnati to Columbus (WOSU)

Raising rider charges

Corporate spokesperson Jennifer Young said FirstEnergy can’t comment on the indictment against its former executives, but added that the company “has taken significant steps to move forward, including reconstituting our senior leadership team and instilling a culture of ethics, integrity and accountability at every level.”

FirstEnergy continues to push forward on its request for roughly $1.4 billion in added rider charges. The case now rests with the PUCO after the company and other parties filed reply briefs on Feb. 9.

The case stands out because it would extend one of the riders involved in the PUCO’s frozen HB 6-related cases, where a prior audit found millions of dollars of the reviewed charges were improper. The Ohio Manufacturers’ Association Energy Group has challenged the hearing examiners’ ruling to keep evidence about HB 6 out of the current case.

Multiple challengers have argued the company’s request for riders should be denied altogether or otherwise considered in the company’s full rate case later this year. The PUCO staff urged the commission to modify some riders and shorten the length of the company’s plan.

The Ohio Environmental Council, Citizens Utility Board of Ohio and Environmental Law & Policy Center did support a proposed rider for energy efficiency programs. Utility-run energy efficiency programs can cut greenhouse gas emissions when designed well. However, the PUCO has generally not allowed ratepayer-funded energy efficiency programs since 2020, after HB 6 took effect.

HB 6 gutted Ohio’s prior energy efficiency standard, which had been paused and weakened by a 2014 law. FirstEnergy began pushing to suspend the standard back in 2012.

In a separate proceeding, the Office of the Ohio Consumers’ Counsel asked the PUCO to freeze FirstEnergy’s case to collect more grid modernization money. The federal and state criminal cases against Randazzo include allegations that relate to a side deal in another case that gave rise to the grid modernization case. And Randazzo played a role in letting the case move ahead while he was at the PUCO.

Read more: 

• HB 6 updates: A new bill and fuzzy math (Energy News Network)
• How a Koch-linked group stalled a bipartisan Ohio energy efficiency bill at the last minute (Energy News Network)

Shareholder litigation continues

Pre-trial fact-finding remains temporarily on hold in shareholder class actions against FirstEnergy and others, as the trial court considers whether to hold such discovery in limbo while an appeals court reviews class certification issues. Lawyers for both sides presented arguments to Special Master Shawn Judge on Jan. 4.

Since then, FirstEnergy has opposed a motion by plaintiffs for the court to clarify its class certification order. Class certification matters because it lets a large group of similarly situated shareholders move ahead with claims that otherwise might not merit the costs of litigation.

Other filings continue FirstEnergy’s objections to turning over its internal investigation on HB 6, as ordered by the special master last fall.

It’s unclear how soon the court will rule on the stay and other issues. On Feb. 13, however, the court did overrule Energy Harbor’s privilege objections to providing materials the special master said it should provide to plaintiffs in response to a subpoena.

Read more: 

• FirstEnergy scolds shareholders for meddling ahead of key class action appeal (Reuters)

Continuing with coal

FirstEnergy has abandoned its 2020 pledge to cut greenhouse gas emissions 30% by 2030. FirstEnergy’s about-face comes as many companies operating in Ohio have stepped up work to reduce greenhouse gas emissions.

FirstEnergy’s Feb. 8 securities filing announced the change just over three years after the company made its commitment for cuts by 2030. At the time FirstEnergy had just ousted Jones, Dowling, and some other executives in the wake of the federal government’s arrests of Householder, Borges and others.

FirstEnergy’s updated website statement says the about-face is necessary so it can keep two aging coal plants in West Virginia running longer, consistent with that state’s coal-dependent energy policy. The company also cites resource adequacy in the PJM transmission region and changing market conditions. It claims it still plans to be carbon neutral by 2050.

FirstEnergy doubled down on coal power a dozen years ago, even as the boom for fracked oil and gas was underway. Bailout efforts in Ohio led to nearly half a billion dollars in ratepayer charges. The Supreme Court of Ohio ultimately held those charges unlawful, but they were not refunded. FirstEnergy similarly spent years lobbying to make West Virginia ratepayers cover costs for coal power there.

Read more: 

• FirstEnergy scraps 2030 climate goal in rare embrace of coal (Bloomberg)
• FirstEnergy surges after ditching 2030 climate goal in boost for coal (Seeking Alpha)

Borges and Householder appeals

Appealing his conviction in the federal government’s HB 6 criminal case, lobbyist Matt Borges filed his appellate brief on Jan. 9. Among other things, Borges took issue with the trial court’s jury instructions and rulings on evidence. He also argued the evidence does not support the government’s sole charge under the federal Racketeer Influenced and Corrupt Organizations Act.

Appellate courts generally defer to trial courts on weighing evidence, and here jurors found Borges guilty beyond a reasonable doubt. Yet some recent federal cases have tried to scale back what counts for a pattern of criminal activity under the RICO statute. Whether Borges’ case fits into any exceptions is unclear.

The government’s response in the Borges appeal is due March 8. Former Ohio House speaker Larry Householder’s appeal is a separate case. His brief is due Feb. 26.

Borges has so far served seven-and-a-half months of his five-year sentence at a federal prison in southeastern Michigan. Householder is serving a 20-year sentence and is at a federal prison in Lisbon, Ohio.

Read more:

• Appeal: Ex-Ohio GOP leader Matt Borges says feds abused their authority in bribery case (Cincinnati Enquirer)
• FirstEnergy lobbyist Borges asks appeals court to reverse five-year sentence over HB6 (Cleveland.com)
• ‘Every politician has got to have somebody that’s the hit man.’ (New York Times Magazine)

FirstEnergy forges ahead even as former execs are indicted 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.