By John Stang
The Public Utilities Commission of Ohio greenlighted the latest in a series of third-party audits of Firs Energy Corp.’s finances. A request for proposals for an independent auditor will go out soon, according to a PUCO order filed on Dec. 30.
“Today the Commission is ordering additional audits of FirstEnergy charges. This is the third such investigation into the utility’s rates or corporate governance underway,” Beth Trombold, the Public Utilities Commission of Ohio’s (PUCO) acting chairwoman, said in a news release.
The audit approved on Dec. 30 will cover FirstEnergy’s distribution modernization rider, which is essentially an additional charge on customers’ basic monthly rates that covers improvements to the Ohio utility’s electrical grid. That additional charge was in place from January 2017 to July 2019.
The other two third-party audits — approved in September and November of 2020 — address FirstEnergy’s alleged bribery of former Ohio House Speaker Larry Householder (R). All three audits were requested by the Office of the Ohio Consumers’ Counsel, which is the Ohio government’s utility residential customers’ watchdog. The first two audits address FirstEnergy’s corporate governance, plus its political and charitable spending.
On Thursday, FirstEnergy declined to comment on the audits.
Also on Dec. 30, the Office of the Ohio Consumers’ Counsel filed documents to tell PUCO that it is having difficulty in obtaining information from FirstEnergy.
Last summer, charges were filed in federal court against then-Ohio House Speaker Larry Householder (R), three lobbyists, and another political operator in an alleged scheme to funnel and launder $60 million from FirstEnergy to advance legislative action to prevent planned closures by May 2021 of the financially troubled Davis-Besse and Perry nuclear power plants.
The plants were owned by a bankrupt subsidiary, FirstEnergy Solutions, which has since become the stand-alone company Energy Harbor.
The money was allegedly used to support the elections of roughly 20 candidates in 2018 who became freshmen legislators in the Ohio House, who then successfully supported Householder becoming the House speaker. The FBI said the money was also used to pay bribes to Householder and the other four; to support the campaign for legislation passed last year to bail out the two plants; and to finance opposition to a proposed, ultimately failed, ballot initiative to repeal the rate hikes.
Householder allegedly oversaw writing of the legislation — House Bill 6 — that established a $150 million annual bailout for the Davis-Besse and Perry reactors. Another $74 million of bailout money is to go to subsidizing two FirstEnergy coal-fired power plants. The rate hikes established by the bill range from $0.85 per month for a home up to $2,400 per month for a large industrial business. All Ohio ratepayers must pay the rate hike, regardless of whether they are FirstEnergy Corp. customers. A court blocked the increases from going into effect as scheduled this month.
No FirstEnergy officials have been charged in this matter. However, CEO Charles Jones was fired. Householder lost his speaker’s post, but won re-election to the state House in November, running unopposed.
Two of Householder’s associates have pleaded guilty to the charges. Householder and two others maintain their innocence.
In a related matter, FirstEnergy announced Tuesday that it has appointed Hyun Park as its chief legal officer, Until now, Park was a partner and general counsel of LimNexus LLP. Prior to joining LimNexus in October 2019, he was Of Counsel at Latham & Watkins LLP, a corporate news release said.
Park replaces former chief legal officer Robert Reffner, who was removed last November.
