Eye on Utilities: Trials lie ahead in Ohio’s HB 6 scandal

This article comes from Canary Media’s Ohio Utility Watch newsletter, a monthly update on Ohio’s HB6 power plant bailout scandal. Visit our newsletter page to sign up.

New developments in the saga surrounding House Bill 6, Ohio’s nuclear and coal bailout law, include:

• A nominating committee will meet on Feb. 4 to choose candidates for a vacancy on the Public Utilities Commission. Multiple members of the committee still have ties to companies or groups that supported HB 6.
• A civil case filing raises questions about text messages that former FirstEnergy CEO Chuck Jones apparently deleted from his personal electronic devices. Depositions begin this month in that case, with trial possibly starting in late summer.
• A six-week trial in the federal government’s criminal case against former Ohio House Speaker Larry Householder and lobbyist Matt Borges will likely start this fall. Pretrial motions are due Feb. 1, with responses and replies due later this month and in early March.
• Public Citizen has filed a protest with federal regulators about a financing deal between FirstEnergy and Blackstone, suggesting a potential for collusion between Blackstone and Icahn Enterprises.

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Who will be the next PUCO commissioner?

The Public Utilities Commission of Ohio Nominating Committee will meet on Feb. 4 to interview and choose candidates for the seat currently held by Daniel Conway, whose term ends in April. He has applied for a second five-year term. Six other candidates will go through interviews as well.

The Nominating Committee still has multiple members with ties to companies or groups that supported HB 6. Chair Michael Koren resigned on Jan. 25, citing health reasons. He was previously a lobbyist for FirstEnergy, and his position as committee chair had been criticized since late 2020.

Cheryl Burchard, Koren’s replacement, is at a law firm that represented a FirstEnergy utility that tried to block Cleveland Public Power’s purchase of solar energy from a facility in Brooklyn, Ohio. Lawyers at the firm also have represented Murray Energy and opponents in wind energy cases. The coal company gave $100,000 to a dark-money group called Hardworking Ohioans, which supported HB 6.

Among the other committee members, Steve Cuckler worked as a legislative aide and then deputy chief legal counsel for former Ohio House Speaker Larry Householder from 2000 to 2004. Others at Cuckler’s firm apparently did work in connection with forming Hardworking Ohioans. Dave Wondolowski is with a union that supported HB 6. Louis Terhar was a co-sponsor of HB 6.

Read more:

• Several House Bill 6 supporters still help pick Public Utilities Commission of Ohio members. (Cleveland.com)
• Ex-FirstEnergy lobbyist resigns from role helping to pick new utility regulators. (Columbus Dispatch)

Missing texts

Reminiscent of the missing 18 1/2 minutes of a tape recording from the Watergate era, former FirstEnergy CEO Chuck Jones ​“had not preserved” text messages from personal devices he got shortly after being fired in October 2020. Jones’ lawyers disclosed the issue just before New Year’s Day, according to a Jan. 27 filing in a shareholder class action case.

Efforts are underway to recover the texts, via forensic consultants, inquiries to his phone carrier, and examination of additional devices, including an Apple watch and Garmin golf watch.

In Jones’ case, the texts could potentially contain damaging admissions or other evidence that could be used by plaintiffs in that case. The plaintiffs hope to start trial by late summer. If the texts are recovered, parties in other proceedings might also call on Jones to produce them.

Read more:

• Forensic experts are working to recover texts deleted by ex-FirstEnergy CEO Chuck Jones after he was fired. (Cleveland.com)

Case against Householder and Borges moves ahead

Lawyers anticipate the criminal trial against former Ohio House Speaker Larry Householder and lobbyist Matt Borges will likely take six weeks. Pretrial motions are due Feb. 1, with responses and replies due later this month and in early March. The defendants presumably will ask the court to dismiss the charges or to keep out evidence the government may need to prove its criminal conspiracy case. Resolving those motions and other pretrial proceedings could take several months, so the trial likely won’t start until late fall.

Read more:

• Larry Householder House Bill 6 corruption case: New prosecutor named (Cincinnati Enquirer)

Deal or no deal?

Consumer advocacy group Public Citizen has filed a protest with federal regulators, challenging FirstEnergy financing deals announced in November. Public Citizen wants the Federal Energy Regulatory Commission to find out if there was any collusive agreement between Blackstone Inc. and Icahn Enterprises. Icahn Capital acquired a chunk of FirstEnergy voting securities and a say on its board last year. Icahn Enterprises’ portfolio manager Andrew Teno sits on FirstEnergy’s board and is a member of its finance committee, according to the protest.

As with Icahn, the November deals give Blackstone voting rights on FirstEnergy’s board. If there was collusion, the potential for cooperation by the two might trigger FERC’s ​“affiliate” rules, Public Citizen argued. The worry would be that the institutional investors could use their combined voting power and seats on the board to the detriment of FirstEnergy’s captive utility customers.

Read more:

• FirstEnergy Corp: A dilemma for value investors. (Seeking Alpha)
• Critics fear investors’ push for profits could thwart other FirstEnergy priorities. (Energy News Network)