Clean energy journalism for a cooler tomorrow

In Ohio, another attempt to repeal HB 6 coal subsidies

This month’s developments include Ohio lawmakers hearing testimony on bills that would finally axe HB 6 subsidies for two 1950s-era coal plants.
By Kathiann M. Kowalski

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Steam rises from a smokestack.
(Photo by Chris Rycroft/Flickr)

Welcome to Ohio Utility Watch, a monthly newsletter tracking developments in Ohio’s ongoing public-corruption saga, often referred to as the House Bill 6 or HB 6 scandal. I’m Kathiann Kowalski, a contributing reporter for Canary Media based in Ohio, and I’ve been following utility efforts to secure bailouts for over a dozen years.

If you’re new to the subject, here is an overview I wrote last summer on the fifth anniversary of the legislation. Common Cause Ohio also has a helpful timeline.

In brief: HB 6 is at the heart of the largest public-corruption scandal in Ohio history and among the largest utility scandals in U.S. history. Utility companies used dark money groups to route roughly $60 million in bribes to pass and protect legislation mandating more than $1.5 billion in ratepayer subsidies to aging, uneconomical coal and nuclear power plants.

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What are we following?

Major questions about accountability and transparency remain unresolved as courts, politicians, regulators, ratepayers, and advocates grapple with Ohio’s ongoing House Bill 6 saga. Here’s a list of some of the people and cases we’ve been tracking with this newsletter:

Criminal cases

  • In July 2020, a federal grand jury indicted former Ohio House Speaker Larry Householder, former Ohio Republican Party chair Matt Borges, veteran political strategist Jeff Longstreth, and lobbyists Juan Cespedes and Neil Clark on racketeering charges related to HB 6. Longstreth and Cespedes pleaded guilty in October 2020. Clark was found dead in March 2021. Householder and Borges were convicted in March 2023 and have both filed appeals.
  • In February 2024, a state grand jury indicted former Public Utilities Commission of Ohio chairman Sam Randazzo and former FirstEnergy executives Chuck Jones and Michael Dowling on bribery, money laundering, and other charges related to HB 6 fraud. Randazzo died by suicide in April 2024. Jones and Dowling’s cases remain in pre-trial.
  • In January 2025, a federal grand jury indicted Jones and Dowling on additional racketeering charges, alleging they participated in bribery, money laundering and obstruction to increase the company’s stock and enrich themselves.*
  • FirstEnergy Corp. also faced federal wire fraud charges but in July 2021 agreed to cooperate with prosecutors and pay a $230 million penalty in exchange for deferred prosecution.

Civil cases

  • Starting in September 2020, law firms announced class-action lawsuits against FirstEnergy and American Electric Power alleging securities fraud and seeking damages for investors. Claims against AEP were settled in July 2024. Litigation against FirstEnergy is ongoing.
  • Another set of lawsuits, known as shareholder derivative cases, accused FirstEnergy and American Electric Power management of breaching fiduciary duties to the companies. Both have settled those cases.
  • FirstEnergy and Energy Harbor, its former generation subsidiary, also faced a class-action lawsuit seeking damages for ratepayers. That case was settled in July 2023 when the companies agreed to reimburse customers a combined $49 million.
  • FirstEnergy, Householder, Jones, and others also face state civil claims, which are on indefinite hold until the criminal cases are resolved.

Regulatory

  • First Energy and AEP have each settled claims with the U.S. Securities and Exchange Commission related to communications with investors.*
  • Jones still faces a civil lawsuit from federal financial regulators alleging he committed fraud against the company’s shareholders.
  • PUCO has several active dockets related to FirstEnergy and HB 6:
  • A ​“corporate separation” audit to determine if FirstEnergy’s distribution and generation companies acted independently. Evidentiary hearing set for May 13.*
  • Customer rider audits to assess whether money was improperly collected or spent. One rider has already been found unlawful but not refundable. Evidentiary hearing set for May 13.*
  • A review of political and charitable spending to ensure HB 6 activity wasn’t funded with customer money.
  • The PUCO also audits spending under the HB 6 coal plant subsidies, including challenges to those charges. One case is on appeal to the Ohio Supreme Court.

Legislation

  • House Bill 15 and Senate Bill 2: Bills would repeal HB 6 coal subsidies and eliminate ​“electric security plans,” among other things. Both bills are currently in committee.*

* Updates in this month’s newsletter

Bills would end coal subsidies and rider plans

House Bill 6 mandated ratepayer subsidies of roughly $1 billion for two former FirstEnergy nuclear plants over the course of six years and more than half a billion dollars for two 1950s-era coal plants. Other provisions let utilities ​“recession-proof” their income by guaranteeing revenue even if electricity sales declined. The 2019 law also gutted Ohio’s standards for energy efficiency and renewable energy, which is still the case today.

Lawmakers repealed the nuclear subsidies and revenue guarantees in 2021, but the coal subsidies remain on the books. Utility customers have already paid more than $400 million for the subsidies, according to the Office of the Ohio Consumers’ Counsel. And ratepayers are on track to pay roughly $80 million more for just the first half of 2025, says a December 2024 analysis from the consulting firm RunnerStone. The total could top $1 billion by 2030, the analysis adds.

Multiple companies and groups testified before the Ohio House and Senate Energy committees this month in support of ending those subsidies. Unlike earlier attempts, House Bill 15 reportedly has the approval of Ohio House Speaker Matt Huffman. Senate Bill 2 is HB 15’s companion bill, although there are some differences. Gov. Mike DeWine has also said he hopes to end the coal subsidies.

Current versions of the bills would let utilities keep charging for the coal plants until their current rider plans expire. That could range from 2026 to 2028, so thousands of consumers might get only a year or two of relief before the coal subsidies otherwise end in 2030.

HB 15 and SB 2 would also end so-called electric security plans, a regulatory construct that has allowed utilities to impose various riders without the benefit of a full ratemaking case.

Read more:

Regulatory case update

The Public Utilities Commission of Ohio will hold a hearing on March 13 on Fifth Amendment claims by several witnesses who previously refused to answer questions under oath. Regulatory staff says the witnesses might now agree to answer if ordered by the PUCO. An outstanding question has been whether an Ohio law granting immunity would cover potential federal charges.

Consumer advocates, business groups and others have been pushing for more than four years for rate adjustments, penalties, or other relief in four regulatory cases related to the HB 6 scandal. FirstEnergy’s objections to turning over massive amounts of documents led to delays, and then the cases were stalled for a year and a half after a request by the Department of Justice. Part of one corporate separate case had an evidentiary hearing in the fall, but the rest of the cases remain unresolved.

Collectively, the cases question the legitimacy of hundreds of thousands of dollars in ratepayer charges. FirstEnergy also could face more than $1 billion in civil penalties.

Although document production has continued, stakeholders are still waiting for FirstEnergy to turn over an internal investigation. The PUCO so far has not required it in the regulatory cases, but a federal judge ruled it should be produced in shareholder litigation. FirstEnergy’s challenge to that order is pending in federal court.

For now, the PUCO plans to start an evidentiary hearing for three of the regulatory cases on May 13. One case deals with HB 6–related questions in a corporate separation case, including an alleged side deal between FirstEnergy and Randazzo back in 2015 that is also relevant to a rider in another case.

Audits in that other case found FirstEnergy failed to properly track spending for one of the charges. Customers paid roughly $450,000 before that charge was ultimately held unlawful. Although the court refused to allow a refund, parties in the rider case have asked for FirstEnergy to be charged more than $1 billion in civil penalties.

A third third regulatory case deals with improper spending under another rider, which was supposed to be for capital costs. The fourth case deals more generally with whether FirstEnergy unlawfully used ratepayer money for political or charitable purposes. An evidentiary hearing date has not yet been set there.

Read more:

New charges against FirstEnergy execs

The U.S. Attorney for the Southern District of Ohio filed charges against former FirstEnergy executives Chuck Jones and Michael Dowling in January. The Jan. 15 indictment marks the first federal criminal charges against individuals who allegedly paid bribes to others in the HB 6 scandal. FirstEnergy, as a company, already paid a $230 million penalty under a deferred prosecution agreement in 2021.

The same day the federal indictment against Jones and Dowling became public, Gov. DeWine announced the appointment of former Lt. Gov. Jon Husted to serve Vice President JD Vance’s unexpired term in the U.S. Senate. The executives dined with DeWine and Husted roughly seven years earlier, on Dec. 18, 2018. Earlier that day, Jones and Dowling met with Randazzo. And later that night, FirstEnergy finalized its plan to pay $4.3 million to a company controlled by Randazzo. Six weeks later DeWine picked Randazzo to chair the Public Utilities Commission of Ohio. FirstEnergy later admitted it paid the money with the expectation that Randazzo would help it on HB 6 and other matters. Randazzo also faced criminal charges in federal and state court when he died of an apparent suicide last spring.

Read more:

AEP settles securities charges

On Jan. 17, American Electric Power announced it had agreed to a $19 million civil penalty to resolve allegations by the Securities and Exchange Commission that it made material misstatements of fact about HB 6–related payments, omitted important information from securities filings, and otherwise failed to maintain proper records on the payments.

To date, no criminal charges have been brought against the company or its executives.

According to the SEC’s cease-and-desist order, the company contributed funds to a nonprofit organization it controlled, which in turn gave approximately $1 million to dark money groups designated by Householder to help pass and protect HB 6 and then to help him stay in office beyond Ohio’s term limits. Among Ohio utilities, AEP owns the largest share of the Ohio Valley Electric Corp., which runs the two HB 6-subsidized coal plants. One is in Ohio, and the other is in Indiana.

Read more:

Kathiann M. Kowalski is a contributing reporter at Canary Media who covers Ohio.

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