OHIO | How two state legislatures passed two FirstEnergy bailouts on the same day

By Jake Zuckerman

Ohio Capital Journal

In a 24-hour span last summer, two state legislatures passed two separate bailouts that will divert millions of taxpayer dollars annually into FirstEnergy coffers.

In Ohio, lawmakers passed House Bill 6 on July 23, 2019, which tacks an 85-cent monthly surcharge on ratepayers and $2,400 for industrial customers to bail out two FirstEnergy Solutions nuclear plants.

Federal prosecutors, who arrested the Ohio House speaker and four allies last week in connection to an alleged racketeering scheme to pass the bill, said the legislation was worth about $1.3 billion for FirstEnergy and its subsidiaries.

Across the river that same day in West Virginia, lawmakers passed House Bill 207, which exempts a FirstEnergy plant outside Parkersburg from $12.5 million from the state’s business and occupation tax. Company officials told lawmakers the bailout would save 160 jobs. 

Allegations of foul play linger over both bills, which were passed by their respective states July 23, 2019.

Federal prosecutors alleged FirstEnergy funneled $61 million through a “criminal enterprise” controlled by Ohio House Speaker Larry Householder to guarantee HB 6’s passage. The money was allegedly used to fund preferred candidates, pressure their votes, enrich the conspirators personally, and thwart any effort to recall the legislation through a ballot referendum.

In West Virginia, Gov. Jim Justice’s added HB 207 to a slate of bills he wanted considered in a special legislative session on a weekend’s notice.

What Justice didn’t tell lawmakers was FirstEnergy was in active litigation with a coal company he owns. FirstEnergy alleges Bluestone Energy Sales Corp. owes the company $3.1 million for a breach of contract when a deal turned sour. The lawsuit is ongoing.

The Akron-based utility also employs Larry Puccio, a close Justice adviser, as its lobbyist in West Virginia. Puccio lobbies for two of Justice’s private companies as well.  

Ben Salango, a Democrat challenging Justice for governor, issued a statement last week calling on the incumbent to “come clean” and release information about his dealings with FirstEnergy.

Justice, who has received $4,000 in contributions from FirstEnergy PAC and the company’s CEO since HB 207 passed, responded to Salango’s statement at a press conference.

“From the standpoint of hinting toward that we would, me, that I would take a campaign donation and everything, and do it inappropriately is so ridiculous it’s off the charts,” he said. “There’s no chance in all the world that I would do such a thing.”

Lame duck Republican Senate President Mitch Carmichael said he recalled the local county commissioners were the bailout’s largest supporters, given the 160 jobs that would have been lost without the bailout.

“It should impact how [Justice] handles it, it wouldn’t impact how we handle it,” Carmichael said.

FirstEnergy has not been charged with a crime. Its CEO Charles Jones denied allegations of wrongdoing to shareholders on Friday, according to the Columbus Dispatch. However, he said the company would cooperate with investigators. 

“This is a serious and disturbing situation,” he said in his first public comments on the case. “Ethical behavior and upholding the highest standard of conduct are foundational values for the entire FirstEnergy family and me personally.”

Jake Zuckerman is a statehouse reporter. He spent three years chronicling the West Virginia Legislature for The Charleston Gazette-Mail after covering cops and courts for The Northern Virginia Daily. Read more Ohio Capital Journal stories here.

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