Ohio’s largest ever corruption scandal shows that power is political and why your energy bill is anything but boring.
Former House Speaker Larry Householder (along with four others) has been implicated in a $61 million bribery scandal surrounding the passage of House Bill 6 (HB 6), in particular subsidies to the state’s nuclear plants operated by FirstEnergy subsidiary, Energy Harbor.
Energy efficiency, weatherization, appliance rebate, and energy audit programs were all scrapped by HB 6.
Despite wide-ranging support in favor of repealing the bill, legislative gridlock continues to delay proceedings as Ohio Republicans mull over a response, while Columbus and Cincinnati sue FirstEnergy.
2020 has not been kind to Ohio. As the state continues to battle the ravages of COVID-19, it is also reeling from the fallout of the largest corruption scandal in state history.
The House Bill 6 (HB 6) scandal has sent shock-waves through Ohioan politics and the energy sector, with utilities such as FirstEnergy implicated in a web of bribery. The fallout from this scandal demonstrates that your electricity bill is neither apolitical nor uninteresting, as the serious money at play clearly shows.
This scandal also indicates that how we produce, manage, and use energy are endless, dynamic questions.
A household(er) name for all the wrong reasons
The HB 6 fiasco has already seen the downfall of former House Speaker Larry Householder, implicated in a $61 million bribery ring along with four others. Specifically, several utility companies are accused of funneling $61 million into dark money groups supporting Householder’s 2016 return to politics, as well as the campaigns of his allies.
One dark group, Generation Now, also funded an aggressive campaign against a citizen-led referendum to overturn HB 6. Householder is accused of ensuring the passage of HB 6, a bill which dumps billions in taxpayer dollars into the lap of FirstEnergy et al. Widespread condemnation has followed, with Vox calling HB 6 “[…] the worst energy bill of the 21st century.”
To understand how this all came to pass, let’s take a step back and look at what HB 6 entails and why it resulted in such a dramatic political climax.
HB 6 was already controversial when it was passed in 2019, as it ended popular energy efficiency programs offered by American Electric Power (AEP) and other utilities, which helped customers save money on their electricity bills.
These programs helped customers with weatherization, offered rebates on appliances, cut costs for LED bulbs, helped remove old refrigerators, and provided energy audits. AEP’s annual costs for its program ran to around $60 million, but helped Ohioans save $2.3 billion on their energy bills between 2009-2019.
Statewide, similar programs have saved Ohioans over $7 billion, while helping create 114,000 jobs in energy efficiency and related fields.
Despite enjoying immense political capital and public opinion backing, the HB 6 repeal process has been treading water for months, the victim of indecision and looming political deadlines.
With all these benefits, it may seem surprising that Ohio’s government sought to ax the aforementioned programs. Part of the reasoning (aside from the now blatant influence peddling) was that canceling said programs would lower Ohioan energy bills, as the energy efficiency programs added an average of $3.36 to monthly bills.
The problem for proponents of the programs is that savings were not clearly visible on customer bills. This hid the fact that for each dollar of program spending, customers reaped $2.65 in savings, resulting in an average savings of $7.71 each month.
Those in favor of HB6 argue that ending these programs (not accounting for attendant savings) saves $2.3 billion in payments Buckeye state residents have been paying since 2008. HB 6 also includes over $2 billion in new bailouts and energy subsidies, notably $1.3 billion to subsidize nuclear power plants owned by Energy Harbor (a FirstEnergy subsidiary) through 2027.
Additional line items include: $444 million in coal plants subsidies through 2030; $355 million in decoupling revenue to FirstEnergy through 2024; and $140 million in subsidies for large solar projects through 2027.
Householder’s arrest in July 2020 not only torpedoed his political career, but also severely undermined support for HB 6 in the Ohio legislature, with dozens of lawmakers co-sponsoring a repeal bill. Despite enjoying immense political capital and public opinion backing, the HB 6 repeal process has been treading water for months, the victim of indecision and looming political deadlines.
GOP lawmakers are currently at odds as to the best course of action: “it’s a multifaceted problem for the Republican caucus,” notes Democratic representative David Leland. Some Republicans still support HB 6 as the debate continues as to which parts of the bill to keep or cancel. Republican Jim Hoops, explains that “you don’t want to react so quickly that you end up making a bigger mess.”
HB 6 repeal process treading water
As things stand, come January 2021 Ohioans will see a new $0.85 charge on their energy bills to pay for the (now politically toxic) nuclear plant bailout. The Ohio legislature already missed a key deadline in early October which would have enabled repeal legislation to come into effect before the session ends in December.
Initially, lawmakers only had two to three weeks for changes to pass the House and Senate, and be signed into law by the governor by October 1st. This is because there is a 90 day waiting period to implement new laws in Ohio. Technically the legislature could bypass this waiting period if it secured a two-thirds majority in both houses.
That being said, lawmakers would have to have a coherent repeal bill in the first place even to start considering this course of action.
Fears that a pre-election lull will segue into the 2020 lame duck period, have led some municipalities to take things into their own hands.
A further hurdle to repealing HB 6 before 2021 has been the 2020 presidential campaign, as the legislature is less willing to act until after the election activities have fully ceased.
While government business tends to wind down in the weeks before elections, some worry that this lull in activity may just be the beginning. Kevin Murray, executive director of Industrial Energy Users of Ohio, laments that “quite frankly, once we get past the general election, I think there will be less pressure on the General Assembly to do anything at all.” Fears that a pre-election lull will segue into the 2020 lame duck period, have led some municipalities to take things into their own hands.
In response to the legislature’s dithering response to HB 6, the cities of Columbus and Cincinnati announced on October 27th that they are suing FirstEnergy to stop HB 6 from coming into effect. Speaking on the issue, Cincinnati mayor, John Cranley said that “we will aggressively work to seek an injunction from the courts to stop the unconstitutional corrupt statute from taking effect in January 2021.”
Ohio Attorney General Dave Yost is also suing to prevent FirstEnergy from receiving any ratepayer subsidies.
On October 29th, two defendants pleaded guilty in federal court to racketeering charges, putting further pressure on Ohio legislators. “I think that the dominoes falling in this criminal conspiracy is going to put more pressure on Republican leadership to repeal House Bill 6,” argues Leland.