Ohio AG sues ‘unholy alliance’ to block nuclear subsidies

Source: By Jeffrey Tomich, E&E News reporter • Posted: Sunday, September 27, 2020

Ohio’s top lawyer has sued to block the payment of more than $1 billion in nuclear subsidies to Energy Harbor, the former FirstEnergy Corp. subsidiary that runs two nuclear plants in the state.

Republican Attorney General Dave Yost filed the lawsuit Wednesday in state court against a group of defendants referred to as the “unholy alliance” — FirstEnergy, Energy Harbor, former Ohio House Speaker Larry Householder and Householder associates who face federal racketeering charges.

Along with seeking to block nuclear payments, the lawsuit asks for unspecified damages to compensate the state for losses related to the public corruption scandal that prosecutors said was central to passage of the nuclear subsidies in H.B. 6.

The lawsuit is the latest fallout from federal charges announced in July that allege Householder and four associates masterminded a $61 million bribery and racketeering scheme to pass and defend H.B. 6 (Energywire, July 22).

The law requires Ohio utility customers to begin paying charges in January that will fund up to $150 million a year in subsidies for the Perry and Davis-Besse nuclear plants on Lake Erie. Utility customers would still pay monthly surcharges ranging from 85 cents for residential customers to $2,400 for large industrial energy users.

Yost had threatened to sue to block payments to Energy Harbor and seek other relief if the Legislature didn’t overturn H.B. 6.

With repeal legislation still pending, he’s seeking an injunction to halt the funds from flowing to Energy Harbor, a process that will likely begin in April.

“We are seeking a court order to prevent that money from being distributed to Energy Harbor because it is essentially ill-gotten gains,” Yost said Wednesday in a video news conference.

The lawsuit doesn’t affect the many other provisions in H.B. 6, including the payment of subsidies to a pair of aging coal plants along the Ohio River.

Jason Copsey, a spokesman for Energy Harbor, said the company is reviewing the legal challenge but its policy is not to comment on lawsuits.

FirstEnergy, meanwhile, said the lawsuit “unjustly targets the company for lawfully participating in the political process and advocating for policy that is consistent with our interests.”

“The attorney general’s complaint is without legal merit, and the company intends to vigorously defend itself,” spokeswoman Jennifer Young said in an emailed statement.

Legislative committees in the state House and Senate have held hearings on proposals to repeal the energy law but haven’t indicated when or if they’ll vote to advance a bill. The pace of repeal proceedings has frustrated Democrats, who have accused Republican leaders of “slow-walking” the bills (Energywire, Sept. 17).

Yost, however, said a repeal of H.B. 6 is more complicated that it might seem, and the lawsuit shouldn’t be viewed as an indication that lawmakers are moving too slowly.

“This is going to require some serious skull sweat to unwind it in an appropriate and fair manner,” he said. “I think they are doing what they ought to do, which is carefully consider and deliberate.”