Columbus, Cincinnati sue to block House Bill 6 nuclear bailout fees, citing corruption probe

Source: By Andrew J. Tobias, • Posted: Wednesday, October 28, 2020

Steam plumes from the cooling tower of the Davis-Besse Nuclear Power Station in Oak Harbor, Ohio, in a 2017 file photo
In this April 4, 2017, file photo, plumes of steam drift from the cooling tower of the Davis-Besse Nuclear Power Station in Oak Harbor, Ohio. (AP Photo/Ron Schwane, File)AP

COLUMBUS, Ohio — Columbus and Cincinnati city officials are suing in an effort to block the $150 million in annual fees created by House Bill 6 from going into effect in January, citing the corruption that federal investigators say allowed the nuclear bailout bill to become law.

In their lawsuit filed on Tuesday in Franklin County Common Pleas Court, Columbus and Cincinnati officials argue the nuclear energy fee created through HB6 is an unconstitutional tax, given its allegedly corrupt origins. City officials said they’re looking for the courts to intervene since the Republican-controlled state legislature has yet to act, despite calls by Republican Gov. Mike DeWine and others to repeal the bill.

“Federal prosecutors have called this the largest bribery scheme ever incurred on the people of Ohio, so the people of Ohio should not have to pay this tax,” Cincinnati Mayor John Cranley, a Democrat, said in a news conference.

The lawsuit from Cincinnati and Columbus is the second government lawsuit filed over House Bill 6. Republican Ohio Attorney Dave Yost also has sued, seeking to block the HB6 subsidies from flowing to Energy Harbor, the former FirstEnergy subsidiary that now owns the plans.

But unlike Yost’s lawsuit, Columbus and Cincinnati officials said the new lawsuit seeks to prevent the fees from being collected at all.

“Columbus and Cincinnati are suing so the people of Ohio can keep the money in their own pocket, especially heading into the winter months amid a global pandemic,” said Columbus City Attorney Zach Klein, a Democrat who holds an elected position.

In a statement, Yost said of the new lawsuit: “Every person is a welcome ally in the fight to eradicate the fruit of this poisonous tree. But let’s be careful not to kill other things in the process—unintended consequences are still consequences.”

HB6 would send more than $1 billion to two Ohio nuclear plants formerly owned by FirstEnergy. Starting in January, the money will be raised by new fees tacked onto Ohioans’ electricity bills, offset by the elimination of different fees that pay for renewable energy and energy efficiency programs.

The bill is the center of a federal corruption investigation that in July led to the arrest of Larry Householder, a Republican who at the time was the speaker of the Ohio House and one of the state’s most powerful politicians.

The timing of the new lawsuit has heavy political overtones, coming just one week before the Nov. 3 election. Cranley is a Democrat who’s exploring challenging DeWine in 2022, while Klein is an ally of former Vice President Joe Biden, the Democratic nominee for president.

“Today’s not about politics. Today is about standing up for constituents,” Cranley said when asked about the timing. But, Cranley also railed against Republican leadership in the state government, saying they’re at odds with the approach taken by officials in Columbus and Cincinnati, two cities where he said the economy is growing.

Democrats running for state legislative seats more broadly have sought to capitalize politically off HB6, passed by the Republican-controlled legislature and signed in July 2019 by DeWine. Republicans meanwhile have tried to distance themselves from the bill, pointing out some Democrats voted for it and some also voted to elect Householder to his leadership role in the state legislature.

Federal prosecutors say Householder played a central role in a $61 million bribery scheme, paid by FirstEnergy and its affiliates, in exchange for Householder helping push through the $1 billion bailout bill for two nuclear plants, owned by a former FirstEnergy subsidiary.

Prosecutors allege the money was spent on ads and other political expenses, first to help Householder become House speaker, then to pressure the legislature into passing the bill and finally to defend it against a repeal effort.

The federal HB6 probe also has spawned reviews by the Ohio Elections Commission, the Public Utilities Commission of Ohio and the U.S. Securities and Exchange Commission. FirstEnergy customers and shareholders also have sued.

A spokeswoman for FirstEnergy said the company has not yet been served with the lawsuit, and would need to review it before commenting.