CLEVELAND (AP) — Ohio Attorney General Dave Yost announced Monday that his office had reached an agreement with FirstEnergy Corp. to stop the collection of a guaranteed profit subsidy included in a tainted energy bill that would have allowed the Akron-based company to collect $102 million from customers this year.
As part of the settlement, FirstEnergy filed a request with the Public Utilities Commission of Ohio on Monday to say it will forgo collection of what is known as the conservation support rider or decoupling charge.
Included in a $1 billion nuclear bailout bill that is now the focus of multiple federal and state investigations, the provision would have allowed the company a guaranteed annual profit of $978 million a year, which it earned in 2018 during a year of weather extremes in the state.
Yost during a Monday news conference called the agreement “a big win for consumers and frankly good for the economy” because of the significant impact collections could have had on manufacturers and large companies.
“A for-profit company, as a matter of reality, shouldn’t be allowed to guarantee its profits,” Yost said.
FirstEnergy spokesperson Jennifer Young said in a statement that Monday’s application to the utilities commission is “the first step toward a partial resolution” with Yost’s office and others.
“Working to constructively resolve this matter in cooperation with the Ohio Attorney General and other parties is part of decisive actions the Board and management are taking to position FirstEnergy for the future and continue to deliver safe, reliable electric service to our customers,” Young said. “FirstEnergy’s leadership is committed to transparency and integrity in every aspect of its business.”
A Franklin County judge in late December granted a temporary injunction in another state lawsuit to stop customer fees from being collected starting in January for a $150 million annual subsidy to support two Ohio nuclear power plants. That subsidy was also included in the tainted 2019 energy bill known as HB6 at a time when the plants were operated by a FirstEnergy subsidiary. A new company took ownership of the plants in February as part of a deal struck in U.S. Bankruptcy Court.
Yost at the news conference questioned the need for the subsidy by the new owner, Energy Harbor, when it sought permission to buy back $800 million of its stock after taking control of the plants last February.
“That’s hardly the move of entity that is cash starved and needed a subsidy,” Yost said. “They seemed to have lots and lots of cash that benefits shareholders and executives of the company.”
Preventing the decoupling charge and the nuclear plant subsidies from being collected could ultimately save Ohio customers $2 billion, Yost said.
Monday’s agreement calls for the attorney general’s office to stop seeking evidence in the decoupling lawsuit until after the conclusion of a criminal investigation by the U.S. Attorney’s Office for the Southern District of Ohio into an alleged $60 million bribery scheme secretly funded by FirstEnergy to obtain passage of the bailout bill, House Bill 6.
Ohio House Speaker Larry Householder and four others were arrested last July and subsequently indicted on federal racketeering charges for their roles in the alleged scheme. Two of his associates have pleaded guilty. Householder has pleaded not guilty.
FirstEnergy has since fired a number of top executives, including CEO Chuck Jones.
Democrats in the Ohio House reintroduced legislation Monday to repeal HB6, which was signed into law in July 2019. Lawmakers ended the previous two-year session in December without taking action on a similar bill.