How controversial Ohio energy plan became law

Citizens group working to let voters have final say on $1 billion bailout.

The story of COLUMBUS — how House Bill 6 a $1 billion-plus

— bailout for aging nuclear and coal-fired power plants became state law

— involves rivalry, campaign cash, strange bedfellows and an epic political comeback.

Utilities that stand to benefit from HB6 donated $1.6 million to the campaign coffers of Ohio politicos and a dark-money group spent $9.5 million on ads designed to sway public opinion in favor of the bill. Scores of lobbyists stalked the Ohio Statehouse for weeks. Environmentalists and oil and gas interests — usually on opposite sides — fought against HB6.

Prelude to this debate was a power struggle over which Republican would become speaker of the Ohio House of Representatives: Larry Householder of Perry County or Ryan Smith of Gallia County. With the help of Democrats, Householder won and became the first Ohioan in nearly six decades to recapture the position and only the third man to do so in Ohio history, according to the Ohio Politics Almanac.

House Bill 6 started and ended as a way to help Akronbased FirstEnergy Solutions keep open two power plants along Lake Erie that had been slated for shutdown.

Gov. Mike DeWine said the new law will save power-plant jobs, give consumers a small break on their electricity bills and maintain energy generation capacity that does not emit carbon.

While DeWine and Ohio Senate President Larry Obhof, R-Medina, supported keeping the nuclear plants open, Householder was the champion on House Bill 6. Householder made a forceful case for saving the plants.

By July 23, Householder delivered a law that will give FirstEnergy Solutions $150 million a year from Ohio’s 4.8 million ratepayers for six years — $900 million. Another subsidy from ratepayers will go to Ohio Valley Electric Corp.’s two coal-fired plants, in which DP&L, Duke Energy and American Electric Power hold ownership stakes. Estimates on what the coal subsidy will cost are unclear, but they all exceed $350 million.

Leading up to the debate and votes on HB6, campaign money flowed from utilities to Ohio politicians. From 2017 to 2019, companies that stand to benefit from the new subsidies donated $1.65 million to politicians and political parties, according to an analysis by Energy and Policy Institute, which opposed HB6. That includes $322,777 given to House members who voted for the bill. Money flowed to the campaigns of the state’s top three political leaders: Householder, $67,416; Obhof, $24,300; and DeWine, $57,708, plus another $20,000 to inauguration events, the group found.

“FirstEnergy and its allies bought a bailout by spending millions of dollars on a combination of campaign contributions, lobbying and advertising. Householder’s rise was fueled by this spending,” said Dave Anderson of the Energy and Policy Institute.

Householder spokeswoman Gail Crowley said there is no connection between campaign contributions and legislative activity. “Here are the facts: HB 6 will save Ohio’s electric ratepayers $1.3 billion — that’s according to the non-partisan Ohio Legislative Service Commission — while preserving Ohio jobs and protecting Ohio’s environment. This plan is good for Ohio,” she said.

Now the same companies may have to defend the law against a citizen-initiated referendum.

Ohioans Against Corporate Bailouts LLC formed July 17, hired Columbus-based Battleground Strategies and filed the initial paperwork for a statewide referendum on July 29. If petition wording is approved, opponents will have to collect 265,774 valid voter signatures by Oct. 21 to qualify for the November 2020 ballot.

DeWine said he is not concerned with the prospect of a referendum.

“We always have opportunities for people to get enough signatures to put something on the ballot and make their case to the people of Ohio,” DeWine said.

House Bill 6 wasn’t the first attempt to craft a bailout for the nuclear energy plants owned by FirstEnergy Solutions. Earlier bailout bills – supported by First Energy CEO Chuck Jones — failed to gain traction under previous legislative leadership.

In 2018, a series of darkmoney groups — organizations not required to disclose donors — helped elect Householder allies into legislative seats, positioning Householder to recapture the speaker’s post he held in 2001-04.

Growth & Opportunities PAC, whose treasurer is D. Eric Lycan, ran ads supporting Householder and his allies for legislative seats in 2018. Lycan is also treasurer of Generation Now, a group that spent $9.5 million on ads for House Bill 6 in 2019. The principle address listed on Generation Now paperwork is property owned by Jeff Longstreth, a political adviser to Householder. Generation Now used Strategic Media Placement, which is owned by Rex Elsass.

In 2017, Householder planned his return to speaker from office space in downtown Columbus that he subleased from Elsass.

While Householder laid out his strategy, then-Speaker Cliff Rosenberger suffered a series of public blows — news stories that he stayed at a luxury condo owned by Ginni Ragan, a wealthy heiress and GOP donor; his former aide got a private mortgage from Ragan for another condo purchase; and the FBI was investigating him. In April 2018, Rosenberger resigned, exposing a rift in the Ohio House GOP caucus: those who backed Householder versus backers of Smith, R-Gallipolis.

In January 2019, Householder out-maneuvered Smith — who opposed HB6 — to capture the speaker post. Householder later named Jamie Callender, R-Concord, as chair of the Public Utilities Committee. Callender told his hometown newspaper that sitting in the chairman’s spot “will put me in the best position in order to try to protect the Perry Nuclear Power Plant, which has been slated for closure.”

The new law will impact every Ohioan who pays an electricity bill. It will put two charges on residential monthly bills: 85-cents for nuclear subsidies and $1.50 for subsidies to help the coal-fired plants. Fees will be higher for commercial and industrial customers. But charges for renewable energy, energy efficiency and peak-demand reduction programs will drop off.

Supporters of HB6 say it’ll save Ohio consumers, on balance, $1.3 billion over several years. Opponents say it’ll actually cost ratepayers money since the law scales back renewable energy and conservation programs that save money in the long run.

It also will keep open multiple power-generation plants. Days after DeWine signed the bill into law, FES announced it was canceling plans to close the Perry and Davis-Besse nuclear plants along Lake Erie as well as close the Sammis coal-fired plant in Stratton.

Ohio passing subsidies for coal and nuclear power has attracted national attention from media and environmental groups. Dan Sawmiller of the Natural Resources Defense Council said the new Ohio law is far outside the bounds of what other states are doing.

“This is one of the worst pieces of energy legislation I’ve worked on. It’s unfortunate that in 2019 we’re taking steps in Ohio to stop what has been really good progress made on both energy efficiency and renewable energy,” Sawmill said. “It’s a lost opportunity.”