FirstEnergy Gives Up $102 Million Subsidy to Pause Ohio Suit

Feb. 1, 2021, 4:19 PM

FirstEnergy Corp. is giving up a $102 million-per-year subsidy in a deal that pauses an Ohio attorney general lawsuit alleging that the firm’s energy-saving incentive was part of a corrupt scheme to bribe state legislators.

“We’re not talking chicken feed here,” Attorney General Dave Yost (R) said during a Monday news conference announcing the deal. “This office and its actions are nearing a $2B savings for the citizens of Ohio, over the future years, that would have been taken out of the Ohio economy and consumers’ pockets.”

Under the agreement, FirstEnergy will ask the Public Utility Commission of Ohio to shrink its “decoupling” electricity rider to $0. Energy efficiency advocates usually support this type of fee which provides a utility a guaranteed rate of revenue, giving incentives to increase efficiency—and reduce emissions—to pocket even more cash.

But the fee was criticized because FirstEnergy was allowed the rider in HB6, a bill providing a $900 million subsidy to former FirstEnergy subsidiary Energy Harbor’s two Ohio nuclear power plants. Federal prosecutors have alleged the law was passed due to $61 million in political donations used as bribes.

FirstEnergy has denied its donations violated any laws. The company didn’t immediately respond to a request for comment.

In December, the Ohio Supreme Court blocked Energy Harbor from collecting its nuclear subsidies.

The case is Ohio v. FirstEnergy Corp., Ohio Ct. Com. Pl., No. 20-CV-6281, agreement announced between Ohio and FirstEnergy, 2/1/21.

To contact the reporter on this story: Alex Ebert in Columbus, Ohio at aebert@bloomberglaw.com

To contact the editor responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com

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