Ohio Energy Scandal Emblematic of a Larger National Crisis

Last year, the state passed what was deemed by some as “the worst energy bill of the 21st century”. The law — which bailed out nuclear and power plants while gutting clean energy standards — essentially removed any incentive to transition toward clean energy, sending ripple waves across the nation. 

On July 21st, the FBI revealed that House Bill 6 was the direct result of bribery and corruption in the state. FirstEnergy, an Akron-based electric utility with a deep-rooted history of climate denial, had bribed Speaker of the House Larry Householder and dozens of other legislators in the state to champion HB 6. After the FBI investigation, Householder and four others were arrested, and Governor Mike DeWine has since called for the law’s repeal. 

What’s important to recognize is that corruption is not just an Ohio problem — it’s a fossil-fuel-industry-funding-climate-denial issue, it’s a politicians-are-literally-being-out-bought-by-corporations issue. What happened in Ohio over the past year therefore must be examined and discussed, because it’s a truly pervasive issue spanning the nation. 

How did we even get here?

Let’s go back to where it all began. In 2017 and early 2018, FirstEnergy lobbied the Ohio General Assembly to pass a nuclear plant bailout, ultimately failing to do so. The company invested millions into Republican primary candidates in 2018 that had promised they would support Representative Householder in his bid for Speaker of the House — as Speaker, Householder championed HB 6, a measure that initially removed clean energy mandates and bailed out two nuclear plants.

However, the bill still didn’t have enough votes at the legislative session’s end, so policymakers amended it to bail out two coal plants owned by Ohio Valley Electric Corporation. After Householder called legislators back for a special session, the bill passed both chambers and was signed into law by Governor DeWine last July.

After the bill’s passing, a group of owners tied to competing power plants launched a petition campaign to let voters decide on the law. Supporters of HB 6 immediately hired “blockers” who worked to disrupt petition gathering and launched a media campaign that pushed the conspiracy that the repeal effort was “part of an attempt by the Chinese government to take over the state’s electric system”. So, to the dismay of climate advocates, the bill became state law. 

What happened last week? 

Last week, the FBI arrested Householder and four associates, including Republican Chairman Matt Borges, lobbyists Neil Clerk and Juan Cespedes, and political consultant Jeff Longstreth. 

An 82-page FBI affidavit outlined the stunning and specific details of corruption. Ultimately, the affidavit alleged that FirstEnergy paid Ohio state legislators more than $61 million in bribes in order to support a bill that made very little sense from an energy standpoint. The utility did this through an organization called Generation Now, which was supposed to be a social welfare organization, but was actually funneling dark money towards political ads and lobbying in support of HB 6. 

In the affidavit, it was revealed that FirstEnergy sent millions to 21 candidates who pledged to support Householder’s rise to power. Householder also received financial compensation, at least $100,000 of which went toward his Florida vacation home and $300,000 of which was used to settle a lawsuit against him. As it turns out, when the ballot initiative campaign began, groups wired $38 million in funds to Generation Now, funding bribery, harassment, and physical assault upon people collecting signatures. Householder has yet to resign, and intends to fight the allegations. 

On July’s State Carbon Pricing Network National Call, Former Ohio regulator Mike Ahern described the events as a “tectonic change.”

“This has been a true pay-to-play scheme that’s rocked the State House, and has potentially affected future energy policy in Ohio for years to come,” Ahern said. 

What did the law do?

HB 6 is shockingly counterproductive, and not just because it’s a major step back for climate regulation — it literally cost ratepayers billions of dollars. The bill did four main things: 

    • Bail out two nuclear plants: From 2021 to 2027, Ohio ratepayers would pay a monthly charge on their electric bills that would be used to subsidize two big nuclear plants that would have otherwise closed in the next few years. 
    • Bail out two coal plants: FirstEnergy customers across the state would pay an additional surcharge to bail out two old coal-fired power plants owned by the Ohio Valley Electric Corporation. 
    • Gut renewable energy standards: Ohio law previously required utilities to generate 12.5% of their electricity from renewables by 2027, which was one of the oldest renewable portfolio standards (RPS) in the country. This bill reduced that target to 8.5% by 2026, and gutted the RPS after 2026. 
    • Gut energy efficiency standards: Ohio law previously required utilities to reduce consumer’s energy use by 22% from 2008 levels by 2027 through energy efficiency programs. These standards, which would have saved ratepayers $4 billion over ten years, were slashed to just a 17.5% requirement. 

In a Vox article, author and professor Leah Stokes described HB 6 as a “multi-billion dollar gift” to FirstEnergy. She also importantly noted it was not just a nuclear bailout, but a utility scheme to stop the clean energy transition. 

What does this mean more broadly?

What happened in Ohio is an explosive, headline-grabbing story. But it’s symptomatic of a larger, systemic issue that spans far beyond the confines of the state. Across the country, private utilities are actively resisting the clean energy transition and contributing financially to politicians who will do the same. 

In her book Short Circuiting Policy, Stokes outlined examples of utilities engaging in bribery and corruption to disincentivize the deployment of renewables. In Arizona, for example, the FBI investigated how a private electric utility company, Arizona Public Service, funneled more than $700,000 through a dark money group to the Arizona’s Corporation Commission Chair’s son’s bid for secretary of state. 

The utility watchdog Energy and Policy Institute outlines countless other cases where electric utilities are resisting the clean energy transition. Just last week, Illinois utility ComEd, an Exelon subsidiary, engaged in bribery and agreed to pay a $200 million fine. 

Governor DeWine has called for Householder’s resignation and for the repeal of this law, though he noted he supported the essence of the legislation. 

“The standard rationale was that the process used to pass the bill was so compromised that it undercut public confidence in the legislation itself,” Ahern said on Wednesday’s call. “However, he reiterated that he thinks a replacement bill supporting nuclear energy in the state is still sound policy.” 

Repealing the bill might be a quick fix in this particular situation, but at the end of the day, until politicians pledge to stop taking money from the fossil fuel industry, these instances of blatant corruption will continue. Voters must hold their elected officials accountable by pushing them to support the No Fossil Fuel Money Pledge, and watchdog organizations should continue to hold utilities accountable for their bribery and corruption.

Featured Image: Photo by Jason Mowry on Unsplash