FirstEnergy CEO Steven Strah retired without warning at roughly the same time that an internal management review related to the corporation’s 2019 bribery scandal was completed.
The company provided no information on the timing of the retirement. In a press release Sept. 15 FirstEnergy said John W. Somerhalder II, chairman of FirstEnergy’s board of directors, has been named interim president while remaining chairman.
In an email, FirstEnergy spokeswoman Jennifer Young said the company won’t make the management review public.
The management review was part of a $180 million settlement agreement proposed in May to resolve a lawsuit brought by FirstEnergy shareholders in the fallout of a $60 million bribery scandal involving the state legislature.
FirstEnergy was found to have paid Ohio House Speaker Larry Householder (R) and four political power-broker allies to shepherd House Bill 6 through the Ohio legislature in 2019, forcing Ohio’s ratepayers to subsidize two financially struggling FirstEnergy reactors in the state. The subsidies totaled $1.3 billion over several years.
The money was used to elect Householder as speaker of the state House of Represetnatives and to pass House Bill 6, which raised customers’ monthly electric bills, and to provide $150 million in annual subsidies to keep the Davis-Besse and Perry nuclear reactors afloat. The Ohio General Assembly later repealed House Bill 6.
The FBI arrested Householder and his four allies in 2019. Householder and one ally are facing trial. Two have pleaded guilty. The fifth killed himself. FirstEnergy paid a $230 million settlement to the feds and state rather than go to trial.
“Mr. Strah will receive no severance payments or severance benefits. However, as is the case generally for executive officers who retire from the Company, Mr. Strah is eligible to receive certain retirement benefits,” said FirstEnergy’s Thursday’s filing with the U.S. Securities and Exchange Commission.
In late August, the Energy and Policy Institute obtained emails that showed that Strah was involved in a lesser-known plank of House Bill 6, called a decoupling provision.
The provision guaranteed FirstEnergy a $102 million annual profit, regardless of actual electrical consumption in Ohio. The $102 million was based on FirstEnergy’s most profitable year, 2018. Under House Bill 6, FirstEnergy was allowed to boost rates to meet a minimum profit guarantee. In 2021, FirstEnergy refunded $26 million raised under the decoupling provision.
