Ohio Governor Mike DeWine is calling for state lawmakers to “repeal and replace” a 2019 law directing more than a billion dollars in subsidies to nuclear power plants after one of his senior staffers was linked to a nonprofit group that federal prosecutors allege played a role in a bribery scheme embroiling Ohio politicians and utility FirstEnergy.
DeWine’s call to overturn House Bill 6 at a Thursday press conference came just a day after he expressed support for the law, saying it is needed to retain zero-carbon energy output — and several thousand jobs — from the Davis-Besse and Perry nuclear power plants. FirstEnergy Solutions, the FirstEnergy subsidiary that owns the plants, filed for bankruptcy in 2018 and threatened to close them unless it received state aid.
DeWine’s change of heart on Thursday came hours after reports that DeWine’s director of legislative affairs, Dan McCarthy, was the principal of Partner for Progress, a 501(c)(4) believed to be one of the “pass-through entities” that funneled money to Generation Now, a nonprofit group that federal prosecutors say served at the heart of a criminal conspiracy organized by Ohio House Speaker Larry Householder.
Householder was arrested Tuesday on charges of masterminding the funneling of $61 million from FirstEnergy to Generation Now. That money funded election campaigns in exchange for lawmakers' support of his 2018 election to the speaker’s seat and the narrow passage of House Bill 6 last year. The money also helped to suppress a popular referendum effort seeking to overturn House Bill 6, as well as to pay for Householder’s legal and campaign fees and a house in Florida, prosecutors say.
House Bill 6 gutted Ohio’s energy efficiency and renewable energy standards. It also increased FirstEnergy ratepayer subsidies to direct hundreds of millions of dollars per year to support the two nuclear plants, plus coal plants that provide power to Ohio customers. FirstEnergy Solutions, which emerged from bankruptcy under the new name Energy Harbor in February, is expected to receive about $1.2 billion in nuclear subsidies.
U.S. Attorney David M. DeVillers said at a Tuesday press conference that the investigation, which has so far led to the arrest of Householder and four other men, is “by no means over.” FirstEnergy, referred to as "Company A" in the complaint filed by the U.S. Attorney’s Office of the Southern District of Ohio, revealed Tuesday that it has been issued a subpoena related to the investigation. FirstEnergy shares fell from $41.26 at the close of Monday trading to $27.33 at the end of trading Thursday.
McCarthy, Gov. DeWine's staffer, hasn’t been accused of wrongdoing in the complaint, and DeVillers said Tuesday that members of DeWine’s administration have not been implicated in the investigation.
It’s still unclear if Ohio’s Republican-controlled legislature will take up a repeal of House Bill 6, but lawmakers from both parties have already begun preparing legislation to overturn the law. The bill passed the state Senate on a 19-12 vote and the House of Representatives on a 51-38 vote. Most of the votes for the bill came from Republicans, but a number of Democrats also supported it.
“Support of HB 6 will very likely be a wedge issue for Ohioans this November when all House seats are up for grabs, as well as 16 Senate seats,” Rob Rains, analyst for Washington Analysis, wrote in a Thursday briefing. Republicans now control the House by a 61-38 margin and the Senate by a 24-9 margin.
Rains added that Democratic lawmakers may seek to reinstate the energy efficiency and renewable energy mandates undone by House Bill 6, as well as undo restrictive zoning provisions for wind turbines passed in 2014 that have stymied wind power development in the state.
“The legislative push to bail out legacy generation and roll back Ohio’s renewable energy commitments was always against the will of Ohioans, who overwhelmingly support renewable energy,” Andrew Gohn, Eastern state affairs director for the American Wind Energy Association, said in a Tuesday statement.