The Energy and Policy Institute reports Ohio lawmakers have introduced a bill that would make it illegal for utilities to charge their customers for political activities.
The bill would introduce new transparency requirements to prevent utilities from secretly spending ratepayers’ funds on politics. The proposal comes after a wide-ranging bribery scandal that saw FirstEnergy spend $60 million in dark money and led to the conviction of the state’s speaker of the House earlier this year.
Senate Bill 149 is the latest in a growing trend of efforts around the country to protect customers from footing the bill for their utilities’ political influence activities. Like the Ohio bill, Colorado, Connecticut, and Maine all passed laws this year which prohibit utilities from charging customers for lobbying, trade association memberships, charitable contributions, advertising, and campaign contributions.
Three Democratic members of Congress have also introduced the Ethics in Energy Act to ban utilities from charging customers for political activities in rates approved by the Federal Energy Regulatory Commission (FERC).
The Ohio bill would require utilities to file itemized annual reports documenting their political influence spending; the Ohio legislation goes a step further by introducing a robust penalty regime for utilities that break the new rules. Any utility caught improperly charging customers for political activities would have to pay a fine amounting to a minimum of 20 times the charges, in addition to refunding the money with interest. The fine would go into a “political activity fine fund” and be disbursed to low- and moderate-income Ohio customers to help them pay their bills.
The bill comes three years after the arrest of then-Ohio House Speaker Larry Householder. Householder was convicted earlier this year in a racketeering case involving $60 million in bribes paid by the utility FirstEnergy in exchange for ratepayer-funded bailouts included in Ohio’s House Bill 6. A network of 501(c)(4) groups with names like Generation Now and Partners for Progress helped to conceal the FirstEnergy money that enabled the scheme.
Reporting by the Energy and Policy Institute and audits and investigations by state regulators have documented how FirstEnergy charged ratepayers, not only in Ohio but in other states including Maryland, New Jersey, Pennsylvania and West Virginia, for a host of the expenses related to its bribes and other campaigning for HB 6, as well as other expenses tied to the utility’s broader political advocacy.
A 2021 audit by the Public Utilities Commission of Ohio (PUCO) recommended $6.7 million in refunds to customers of FirstEnergy’s Ohio utilities who were wrongly charged for payments related to the H.B.6 scandal (a second PUCO audit and several cases related to FirstEnergy’s H.B. 6 political spending have been paused by PUCO at the request of federal prosecutors while the utility corruption investigation continues).
A 2022 Pennsylvania Public Utilities Commission audit found that FirstEnergy’s Pennsylvania utilities owed at least $2.4 million in refunds to customers that the utilities charged for H.B. 6-related payments.
Following an audit by the New Jersey Bureau of Public Utilities, FirstEnergy is proposing to refund approximately $10 million to New Jersey customers who it wrongly charged for lobbying, advertising, sponsorships and other expenses, while also proposing to raise those customers’ rates by $185 million.
After another state investigation led by the Maryland Office of the People’s Counsel, FirstEnergy’s Maryland utility proposed to refund nearly $1.7 million to Maryland customers who were charged for lobbying, advertising, and sponsorships, as part of a proposal to raise rates by $44 million.
A West Virginia Public Service Commission audit into FirstEnergy’s use of ratepayer money for lobbying is just now getting underway. Ahead of that audit, FirstEnergy proposed to refund $2.5 million to customers of the company’s West Virginia utilities who were wrongly charged for “non-recoverable costs,” which included sports sponsorships, as part a proposal to raise those same customers rates by $207 million.
Check out the full article on the Energy and Policy Institute website.