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Many bailout-repeal bills were filed, only a half-measure appears to have a chance

Marty Schladen, Ohio Capital Journal

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Davis-Besse Nuclear Power Station in Ottawa County, Ohio

In July, Ohio was rocked by a massive scandal involving the billion-dollar bailout of two failing Northern Ohio nuclear reactors. It prompted indictments, guilty pleas, firings, resignations and calls for repeal.

At least five bills that would address the latter issue were filed, but with the legislative session wrapping up on Tuesday at the latest, only one appears to have a chance of making it across the finish line. And that one is at best a half-measure.

Federal authorities in July charged former House Speaker Larry Householder and four associates in what prosecutors called the biggest bribery scandal in Ohio history.

The scheme, in which two of the men pleaded guilty, involved funneling $61 million from Akron-based FirstEnergy and related groups through 501(c)(4) “dark money” organizations and into an effort to make Householder speaker. Householder, who resigned as speaker but remains in the legislature, then rammed through House Bill 6 — a law that increases electricity rates by $1.3 billion over a decade.

A little more than $1 billion of that is slated to prop up two nuclear plants owned by FirstEnergy successor Energy Harbor. Despite claims that the legislation was to support carbon-free generation, the rest of the money will prop up one aging coal-fired plant in Ohio and another in Indiana.

When the scandal broke, Gov. Mike DeWine — whose administration has several ties to FirstEnergy — initially condemned corruption, but said HB 6 was too important to repeal. A day later he reversed himself, saying the bill should be repealed and replaced with another bailout.

Five months later and with the lame-duck session of the General Assembly in its final days, repeal appears unlikely. Rather, House Bill 798 — which would delay collection of the nuclear subsidies for a year — was voted out of the House Select Committee on Energy Policy and Oversight by an 8-7 vote Wednesday.

“HB 798 is on the fast track…,” Rep, Mark Romanchuk, R-Ontario, said in a text message shortly after he had voted against the measure.

That fast track is coming at the expense of Romanchuk’s own legislation, House Bill 772.

Romanchuk is a longtime opponent of subsidizing the nuclear power plants, which have received more than $10 billion in subsidies since Ohio deregulated its generation market in 1999.

“Should Ohio be interfering with a deregulated, competitive generation market and should Ohio be bailing out corporations when they make bad decisions?” he asked late last month in a committee hearing as he introduced HB 772.

The bill has another important provision.

It would force utilities to refund monies it gets from rate increases if those increases are later ruled to be unlawful.

The state’s official consumer representative, the Ohio Consumers’ Counsel, reports that since 2009, ratepayers have doled out $1.5 billion in rate hikes to various utilities that were later struck down by the Ohio Supreme Court. There is no way to make the utilities repay that money.

In a recent interview, DeWine said requiring such monies to be refunded is “an issue we have not looked at. It’s certainly an issue that we will look at.”

As with an HB 6 repeal, such a look will  apparently have to wait for another legislative session.

In written testimony ahead of Wednesday’s committee hearing, Consumers’ Counsel Bruce Weston said the corruption behind HB 6 is so bad that even the ratings agencies are noticing.

“The taint on House Bill 6 is terrible and the response should include a repeal and a legislative investigation,” he wrote. “I’ve also asked for an investigation by the (Public Utilities Commission of Ohio), and that has been slow to materialize. The credit ratings agency, Standard & Poor’s, recently ha(d) this to say about the key proponent of House Bill 6, FirstEnergy:

“‘We believe these violations at the highest level of the company are demonstrative of insufficient internal controls and a cultural weakness. We view the severity of these violations as significantly outside of industry norms and, in our view, they represent a material deficiency in the company’s governance.’”

After the energy-oversight committee passed the non-repeal with his vote, Chairman James Hoops, R-Napoleon, looked ahead.

“This has been a very passionate and interesting issue,” he said. “I think it’s just the beginning when it comes to energy policy.


This story was republished from the Ohio Capital Journal under a Creative Commons license.

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