CLEVELAND, Ohio – The Ohio Supreme Court on Monday postponed the collection of $170 million in fees involving House Bill 6, a move stemming from the legal fight over how state regulators set up charges to customers stemming from the tainted legislation.
The state’s high court ruled on litigation brought by the Ohio Manufacturers’ Association that challenged how the Public Utilities Commission of Ohio implemented the fees. The manufacturers’ group called the charges “unlawful, unjust and unreasonable.”
It has claimed that the fee structure of House Bill 6, a $1 billion bailout of two nuclear plants, will harm large businesses. The bill, which became law last year, is the focus of a federal bribery investigation.
The ruling means that the charges, set to begin next week, likely will be postponed until the justices make their decision. That could take two months or more.
Under the legislation approved last year, every Ohio electricity customer must pay a monthly surcharge that amounts to about 85 cents for residents and $2,400 for large industrial plants. The charges run through Dec. 31, 2027.
House Bill 6 requires the money collected from customers to be deposited into the Clean Air Fund, which the state treasurer would then keep. It would eventually be dispersed to Energy Harbor, which owns the Davis-Besse and Perry nuclear plants along Lake Erie.
A former subsidiary of FirstEnergy Corp., FirstEnergy Solutions, had owned the plants until the new company was formed after FirstEnergy Solutions filed for bankruptcy in 2018.
“This is a huge win because the charges won’t be collected from customers’ bills,” said Kimberly Bojko, an attorney for the Ohio Manufacturers’ Association.
The ruling comes days after Franklin County Common Pleas Judge Christopher Brown blocked the collection of the fees in an order on a preliminary injunction. Ohio Attorney General Dave Yost and the cities of Columbus and Cincinnati sought to stop the distribution of the fees, citing the allegations brought by federal prosecutors.
An FBI affidavit said FirstEnergy and its affiliates paid $60 million in bribes to then-Ohio Speaker of the House Larry Householder and four allies. The money went to pushing the bill and fighting off a ballot initiative, according to the document.
Householders and the others were indicted in July in U.S. District Court in Cincinnati on racketeering charges in what authorities are calling the largest bribery case in Ohio history.
Already, two of Householder’s associates, Jeffrey Longstreth and Juan Cespedes, have pleaded guilty. The former speaker has denied the allegations. FirstEnergy and its affiliates have not been charged. Some top executives at the Akron utility, such as Charles Jones, the former chief executive officer, have been let go.
The U.S. Securities and Exchange Commission is investigating the utility, and several shareholders have filed lawsuits against it.
In documents filed with the Supreme Court, Bojko said that since there is no refund mechanism available to customers once the funds are collected and dispersed, customers “throughout Ohio face imminent harm from the PUCO’s orders.”
Documents from the manufacturers’ group said the PUCO erred in designing the rates for customers and the methodology for coming up with the rates.
Attempts to reach Marion Little, an attorney for Energy Harbor, were unsuccessful. Jennifer Young, a spokeswoman for FirstEnergy, said the company is reviewing the Supreme Court’s decision and “we don’t have anything additional to add at this time.”
Catherine Turcer, the executive director for the government watchdog group Common Cause Ohio, was surprised to learn about the postponement.
“Thank goodness,” Turcer said. “It’s so important for the Ohio Supreme Court to step up for consumers.”