Welcome to Ohio Utility Watch, a periodic newsletter tracking developments in Ohio’s ongoing public-corruption saga, often referred to as the House Bill 6 scandal. Sign up for the newsletter.
It’s over. Well, partly.
As of today, customers of regulated utilities in Ohio will no longer pay subsidies for two old coal plants — but the saga of the coal and nuclear bailout law at the heart of Ohio’s largest public-corruption scandal continues.
Six years ago, FirstEnergy and others used dark money — funds given to groups whose ultimate source for political spending can’t be publicly traced — to route roughly $60 million in bribes to public officials and alleged coconspirators in exchange for their help passing and protecting House Bill 6. That legislation mandated the coal plant subsidies plus more than $1 billion in ratepayer charges for two nuclear power plants. Ohio lawmakers repealed the nuclear subsidies back in 2021.
Here are new developments from the last two months:
Power corrupts
Ohio’s HB 6 conspiracy takes center stage in a new book, “Power Corrupts: Cleaning Up America’s Biggest Industry.”
While the FirstEnergy case involves massive amounts of money, utility corruption isn’t unique to Ohio, said author Richard Munson, former director of Midwest clean energy for the Environmental Defense Fund. Besides undermining democracy and raising electric bills, corruption interferes with competitive markets, he told Canary Media.
Basically, bailouts for fossil fuels and nuclear power impose a disadvantage on cheaper, clean sources like wind and solar. “If the outmoded is being subsidized, that innovation will not be able to advance,” Munson said.
For now, it’s unclear whether Ohio’s Public Utilities Commission, or PUCO, will impose meaningful consequences on FirstEnergy’s utilities for alleged regulatory violations. Also in doubt is what will happen with the commission’s reviews of charges already paid by customers for the coal plants, which managers often ran even when doing so increased the facilities’ financial losses.
“Ohio PUCO unfortunately appears to be an example of what were supposed to be guard dogs becoming lap dogs,” Munson said.
Read more:
Lots of demand, too little grid: The state of the US power sector (Canary Media)
Coal plant charges end
House Bill 15, passed in May, ends HB 6’s ratepayer subsidies to two 1950s-era coal plants as of today, Aug. 14. Customers of AEP Ohio, Duke Energy Ohio, AES Ohio, and FirstEnergy’s three Ohio utilities have already paid more than half a billion dollars since HB 6’s subsidies began in January 2020, according to the Office of the Ohio Consumers’ Counsel.
Regulatory cases and an Ohio Supreme Court case continue. Among the issues is whether the PUCO improperly pressured an independent auditor to tone down conclusions about the plants’ decision to run even when it was clear they would lose money.
Read more:
Ohio finally ends subsidies for two scandal-linked coal plants (Canary Media)
Regulatory violations
Another half billion dollars or more in potential penalties is at stake in three of the PUCO’s four HB 6 cases, in which briefing wrapped up Aug. 4. FirstEnergy’s utilities claim they should pay far less.
One case asks whether the utilities violated an Ohio law requiring the separation of regulated utilities and their unregulated affiliates that produce electricity. The other two deal with alleged improper spending of money collected for two bill riders, which are extra charges that can only be used for specified purposes.
Read more:
HB 6 regulatory cases weigh what FirstEnergy’s Ohio utilities should pay (Canary Media)
Ratemaking and the rate of return
Briefing also wrapped up this month in the rate case for FirstEnergy’s three Ohio utilities — their first full rate case since 2007.
FirstEnergy wants the PUCO to approve roughly $183 million more per year in rate charges for Ohio Edison, Toledo Edison, and the Cleveland Electric Illuminating Co. (CEI). In contrast, the Office of the Ohio Consumers’ Counsel and other challengers argue FirstEnergy’s customers, as a group, should pay $132 million less per year.
Much of the difference hinges on the rate of return on equity. FirstEnergy wants regulators to set that rate at 10.8%. The utility commission’s staff says the rate should range from 9.13% to 10.13%.
Opponents argue the return on equity should be even lower, with The Ohio Manufacturers’ Association Energy Group, the Office of the Ohio Consumers’ Counsel, and others calling for a cut of half a percentage point to reflect the poor management that enabled the HB 6 scandal. The consumers’ counsel also noted the company’s prior efforts to delay the rate case because executives expected rates would be dropped, creating an “Ohio hole.”
If regulators grant FirstEnergy’s request, roughly 70% of the increase will be borne by CEI’s approximately 745,000 customers, who make up only 35% of the three utilities’ 2.1 million customers. FirstEnergy spokesperson Hannah Catlett said the cost for that area is higher because, compared to the other utilities’ areas, “the Illuminating Co. service territory generally sees bigger storm impacts.”
The commission is expected to rule on the issues in the coming months.
Read more:
Ohio’s energy companies want rate hikes as testimony accuses PUCO of hiding information (Ohio Capital Journal)
Here’s what you need to know about FirstEnergy’s request for a rate increase (Signal Akron)
Ohio grid disparities leave some areas with older, outage-prone equipment (Canary Media)
Criminal case updates
The Sixth Circuit Court of Appeals on July 25 refused to reconsider its unanimous decision this spring upholding the criminal convictions of former Ohio House Speaker Larry Householder and lobbyist Matt Borges. Juries found both guilty in March 2023 of violating the federal Racketeer Influenced and Corrupt Organizations Act, known as RICO.
Former FirstEnergy executives Chuck Jones and Michael Dowling continue to face criminal charges in both federal and state court. Judge Susan Baker Ross has set the state court trial for Jan. 26, 2026. Pretrial fact-finding, called discovery, continues in the federal case.
Read more:
Appeals court rejects ex-Ohio House Speaker Larry Householder’s request for a second look (Columbus Dispatch)
Federal court rejects appeal of former House Speaker Householder in bribery scandal (WOSU)
Court rejects appeal for former Ohio officials Larry Householder, Matt Borges (Fox 28)
FirstEnergy bribery case set for trial after judge rejects dismissal motions (Signal Akron)
Theft charges dropped against ex-FirstEnergy executives in HB6 bribery scandal (Cleveland.com)
Join the discussion
Open questions in Ohio’s HB 6 corruption scandal are on the agenda for the 2025 Ohio Public Interest Environmental Law Conference on Sept. 26.
Canary Media’s Kathiann Kowalski will join Angela O’Brien, deputy consumers’ counsel at the Office of the Ohio Consumers’ Counsel, and Miranda Leppla, director of the environmental law clinic at Case Western Reserve University School of Law, for the continuing legal education program, which is presented by the Ohio Environmental Council with the Energy and Environmental Law Society at The Ohio State University’s Moritz College of Law.
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