Developers of gas-fired and wind projects were united in their fury and dismay last year when Ohio’s House of Representatives passed House Bill 6 – the state’s nuclear and coal bail-out bill. The recent bribery allegations only add fuel to the sense of righteous indignation.
At the center of the criminal case is House Speaker Larry Householder, whose non-profit Generation Now Ohio allegedly received $60 million in unregulated and unreported donations from FirstEnergy Solutions (now Energy Harbor) to support the bill, which also weakened renewable energy goals.
Deal watchers have commented privately on the situation in terms that could not possibly be published while the case is still unfolding. FirstEnergy Corp, the former parent company of FirstEnergy Solutions, has said it is “reviewing the details of the investigation and [intends] to fully cooperate.”
Meanwhile, market participants are attempting to assess the implications. “I’d be shocked if there was not a huge cry for repeal [of the bill], but I suspect the headlines may be oversimplifying the situation,” says a project finance banker.
HB6 had a major impact on the prospects for development in Ohio. LS Power said it would have to ditch plans for an expansion of its Troy gas-fired project in Luckey, while sPower abandoned a 200 MW wind farm in Seneca County earlier this year, saying “wind energy development has become increasingly difficult in the state” (PFR, 7/24/19, 1/22/20).
By coincidence, the Ohio bribery accusations emerged just days after Commonwealth Edison Co agreed to pay $200 million to settle separate bribery charges in Illinois.
The most surprising thing – if the accusations are well-founded – is that the big utilities feel the need to go through illicit channels to secure favorable legislation. Why run the risk, when they can achieve much the same effect through massive, legal, publicly disclosed donations and lobbying?