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In-Depth: Agreement with FirstEnergy to save ratepayers millions annually, Ohio AG says

First Energy file
Posted at 4:58 PM, Feb 01, 2021
and last updated 2021-02-01 16:58:19-05

COLUMBUS — As part of an agreement with the Ohio Attorney General’s Office, FirstEnergy has agreed to put on pause a controversial provision of the much-maligned nuclear bailout bill. By halting the practice of ‘decoupling’ ratepayers will collectively save millions of dollars annually, Attorney General Dave Yost said.

Yost said FirstEnergy agreed to end the decoupling practice in exchange for Yost’s office delaying the proceedings of a civil lawsuit against FirstEnergy while the federal criminal investigation into alleged corruption and bribes has concluded. Former Ohio House Speaker Larry Householder and four others have been federally indicted on corruption-related charges in connection with the alleged bribery scheme. The practice of decoupling was a key cog in House Bill 6, the controversial nuclear bailout bill.

The practice allowed FirstEnergy to guarantee profitability even through economic downturns. By stopping the practice, ratepayers are expected to save $102 million this year alone.

“The two worst outcomes for Bill and Betty Buckeye are the decoupling and the nuclear bailout,” Yost said. “Being able to stop the effect of those takes the worst impacts of HB 6 off the table. They will not be able to collect a dime on that [policy] that supports the decoupling and ultimately guarantees them profitability in spite of market forces.”

Another key component of HB 6, the nuclear bailout fee, was halted by a Franklin Co. judge in December. By halting both the fee and decoupling, ratepayers in Ohio are expected to save $2 billion, Yost said.

“We’re talking about a lot of money here. We get a little numb to millions, billions, and trillions when we hear of arguments at our nation’s capital over the budget,” Yost said. “But the fact of the matter that for any state, $2 billion to come out of its economy is a lot of money and, because of this lawsuit, that money is not going to come out of the economy.”

Although the decoupling practice still remains state law because HB 6 has not been repealed, FirstEnergy has agreed to set the decoupling rate to zero in filings with the Public Utilities Commission of Ohio (PUCO). Decoupling revenues were collected by First Energy in 2020 but Yost said his office reserves the right to recoup those revenues through litigation.

Although the controversy and investigations into HB 6 are far from over, Yost said FirstEnergy’s recent agreements suggest a changing of the guard at the company.

“There is a new leadership team in place and I think this agreement suggests that the internal review that the board ordered and the information they found has concluded they needed to go to a new direction,” Yost said.