End HB 6 coal subsidies, probe utility influence – critical Ohio resolutions for the new

If any Ohioan doubts that tainted House Bill 6 is still exacting huge costs from them and other utility ratepayers, they need only go to the website of the Ohio Consumers’ Counsel, the state advocate for utility customers, and look at an OCC calculator that’s been running since HB 6 took effect. As of Friday, it showed nearly $172 million paid out by Ohio ratepayers to subsidize two money-losing coal plants, one of them in Indiana.

If those subsidies aren’t repealed — along with the rest of HB 6 that’s still in force — Ohioans could be on the hook for $700 million in coal bailouts by 2030 just to help deep-pocketed private electric utilities in Ohio and their shareholders. That’s wrong. That’s also Ohio.

Yet full repeal of HB 6 is only one part of the urgent 2022 to-do list that also involves getting to the root of illicit utility regulatory influence, and fixing those problems.

Those to-dos confront both the Ohio General Assembly and Gov. Mike DeWine – coincidentally, in a year when the governor will ask Ohioans to give him a second term.

The dilly-dallying and half-measures by the Public Utilities Commission of Ohio need to end. The commission has to muster vigor, heretofore lacking, in investigating all the regulatory tentacles of the alleged HB 6 bribery and pay-to-play scandal first revealed by the federal arrests of five Statehouse figures in July 2020. Among those five, former House Speaker Larry Householder and former Ohio Republican Party chair Matt Borges await trial, two have pleaded guilty and one has died, apparently by his own hand.

Last July, FirstEnergy Corp., the Akron-based utility at the heart of the alleged scandal, agreed to pay a $230 million federal fine as part of a deferred prosecution agreement that included acknowledging its role in illicit payouts, including to a firm owned by former PUCO Chairman Samuel Randazzo, who has not been charged.

What all did Randazzo do on behalf of FirstEnergy while he was PUCO chair — appointed by DeWine — from February 2019 until November 2020, when he resigned shortly after his home was searched by federal agents? That question remains to be answered.

Meanwhile, DeWine, who appoints the PUCO commissioners, and the General Assembly both – in theory – have oversight over the panel. The agency has almost 300 employees, according to legislative analysts, and will spend roughly $63 million this fiscal year.

It’s long past time for the PUCO’s overseers to get a move on. DeWine and the legislature must induce the PUCO to cut through what looks like procedural falderal so Ohioans can get a clear picture of the dealings of FirstEnergy and Randazzo.

As noted, Randazzo has not been charged with a crime. Still, his former business relationship with FirstEnergy – parent of the Illuminating, Ohio Edison and Toledo Edison companies – raises serious questions about the PUCO’s decision-making on matters pertaining to FirstEnergy.

Cleveland.com’s Andrew J. Tobias reported last summer that, in 2015, when Randazzo, a lawyer then in private practice, was leading a coalition of big electricity customers, he “received a huge personal windfall from FirstEnergy … in exchange for what the company has said was his agreement to change sides on a key state regulatory move sought by the company.”

Moreover, FirstEnergy officials revealed in court filings that they sent more money Randazzo’s way after DeWine appointed him to the PUCO. As Tobias reported it, “in exchange for a $4.3 million bribe, … Randazzo helped [the utility] push for changes worth hundreds of millions of dollars to the Akron-based company.”

What changes, exactly? Utility consumers in Ohio need to know and it’s part of the state’s duty to the public to find out — and for the PUCO to order ratepayer refunds where merited.

Another issue, as noted, is repeal of the subsidies for the two coal-fueled generating plants that scandal-scarred HB 6 still squeezes from Ohio electricity consumers.

The HB 6 law, enacted in a cross-party vote in 2019, required Ohio electricity consumers to subsidize two nuclear power plants owned by FirstEnergy – Perry, near Cleveland, and Davis-Besse, near Toledo. The bill also gave FirstEnergy and other utilities other regulatory and ratepayer benefits, many of them since repealed. But still on the books are HB 6 provisions requiring ratepayers to subsidize the coal plants, and releasing utilities from certain clean-energy obligations, including energy efficiency requirements that saved ratepayers money.

In contrast to Ohio’s inaction, Michigan’s Public Service Commission suggested in November its dim view of high-cost power from the two coal plants, which a Michigan subsidiary of Columbus-based American Electric Power Co. wants Michigan consumers to shoulder. (AEP’s Ohio subsidiary is Ohio Power Co.)

The Michigan commission “noted studies … that have found costs for output of the two [coal] plants to be tens of millions of dollars more expensive than purchasing electricity from the wholesale markets.” Yet HB 6 makes Ohioans cover those costs. That needs to stop – as must the PUCO’s leisurely pace in investigating the HB 6 scandal. Enough is enough.

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