Hard To Follow The Money When It’s Dark
By Nick Rogers
Chardon, Ohio - As the HB 6 rabbit hole continues to deepen, the disgraced company at the heart of it all, Akron-based FirstEnergy – after its deferred prosecution agreement in which it admitted guilt and paid $230 million in fines to officially avoid criminal liability – continues its push to raise their rates in the name of “grid modernization.”
Consumer advocate group The Ohio Consumer’s Council (OCC) filed a request with the Public Utilities Commission of Ohio (PUCO) to deny FirstEnergy’s “Grid Mod II” plan as they say it is “inextricably intertwined” with the HB 6 bribery scandal; specifically now-indicted former PUCO head Sam Randazzo who initiated the first iteration of the plan. A previous, similar request by the OCC to PUCO was denied in October, 2023.
If FirstEnergy’s request is granted, they would have permission to charge customers an additional $626.4 million for “grid modernization” and $144.1 million for “operation and maintenance expenses” over the next decade. This comes on the heels of PUCO agreeing, in 2016, to allow FirstEnergy to raise prices using a “distribution modernization rider.” And while the Ohio Supreme Court eventually blocked the tariff in 2019, customers had already paid almost $460 million in additional charges.
Publicly-released texts between former PUCO chair Asim Haque (currently Vice President of grid operator PJM) and now-indicted former First Energy Vice President Michael Dowling show that Haque knew the rate increase would, eventually, be deemed illegal, but that he also knew refunds would not be required because the regulator did not specify that at the time of the agreement. “…knowing that it would likely be found illegal and could not be refunded, I knew you [Dowling] would hold onto the funds,” Haque’s text reads. “Remember me fondly my friend.” Haque claims the text exchange was a joke.
Speaking of refunds, FirstEnergy did begin issuing some payments to customers as a result of a $50 million civil suit tied to the HB 6 scandal, but the payments are small and the money can only be spent online. The average payment is $15, and it cannot be added to a bank account. After one year, the card issuer, Tremendous, charges a $3.95 inactivity fee. “It’s about as useless as a rubber beak on a woodpecker,” FirstEnergy Customer John Makley said. “They just made the restrictions so tight, it’s hard to spend it – I think that’s a crime in itself.”
Discussions of Ohio “grid modernization” tend to center around Smart meter infrastructure (a proven health risk) via PUCO’s “Power Forward” program. Many of the Electric Security Plans (ESPs) – essentially rider tariffs added without true regulatory review – are justified through industry (and regulatory) claims of needed smart meter infrastructure. However, there has been no evidence produced showing that these ESPs have actually gone towards grid modernization. There is plenty of evidence, however, in the above-reference deferred prosecution agreement, that FirstEnergy used a “dark money group” called Generation Now to funnel the HB 6 bribery money. Implications have been made that much of this money came, in large part, from the 2016 rate increases, though an “independent” audit revealed “no documented evidence” that the funds were spent on illegal lobbying.
Daymark Energy – the group hired by PUCO to conduct the audit – stated, “We found no documented evidence that tied rider DMR spending to lobbying for the passage of HB 6. However, given the inability to trace how [the] funds were spent, we cannot rule out with certainty use of Rider DMR funds to support of the passage of HB 6.”
With all the corruption at the corporate and state legislature level, some good news has come to light. Rep. Rachel Baker has introduced HB 393, ostensibly to “Require refunds for utility customers for unlawful charges.”
FirstEnergy and PUCO appear to be a match made in heaven, and while the likes of Larry Householder and Randazzo have taken the fall, the incestuous energy behemoth network continues chugging away. Like Pfizer’s 2009 court-ordered fine, FirstEnergy’s punishment appears to be, more or less, a drop in the bucket relative to overall earnings. Less than three years removed from FirstEnergy admitting to egregious crimes at the expense of Ohio Citizens, they now find it appropriate to price-gouge once again. The dust from the HB 6 scandal has far from settled but, in the meantime, it behooves Ohioans to keep abreast of it all as it has direct ramifications on all of us. Let’s hope the likes of Rachel Baker actually have our best intentions in mind.
