Bankrupt FirstEnergy Solutions spends millions on bailout campaigns in Ohio and Pennsylvania

Updated on July 22, 2019 with the latest available information on spending on outside lobbying and communications by FirstEnergy Solutions.

Bankruptcy documents reveal that FirstEnergy Solutions has spent millions of dollars on outside lobbying and public relations firms as it seeks bailouts for its nuclear power plants from consumers in Ohio and Pennsylvania.

The documents shine a light on the role these outside firms have played in running pro-nuclear bailout groups like the “Ohio Clean Energy Jobs Alliance,” which is  backed by FirstEnergy Solutions (FES), and “Nuclear Powers Pennsylvania,” which is backed by FES and Exelon. The documents also link FES to a third group called “Clean Jobs for Pennsylvania, LLC,” which is a subsidiary of Exelon, through its outside consultant SRA Communications.

These three front groups have together spent over $610,000 on social media ads on Facebook and Twitter.

FirstEnergy and its network of lobbyists poured money, food, and drinks into last year’s state-level elections in Ohio. Governor Mike DeWine and Ohio House Speaker Larry Householder, both beneficiaries of FirstEnergy’s largesse, are vocal supporters of legislation to prop up the utility’s two nuclear plants in Ohio, which are currently slated for closure. DeWine chose Dan McCarthy, who last year lobbied for FirstEnergy and contributed to DeWine’s campaign, as his director of legislative affairs.

A billion dollar bailout for FES’s nuclear power plants in Ohio is nearing the finish line. While FES has billed the proposal, House Bill 6,  as a way to save jobs, preserve “clean energy” from nuclear power, and combat climate change, HB 6 will force Ohioans to pay an additional $450 million to bail out two coal-fired power plant operated by the Ohio Valley Electric Corporation. John Judge, the CEO of FES, has also said the bill would enable the company to invest $40-50 million to keep its super-polluting Sammis coal plant operating.  

In addition, the bill will roll back Ohio’s renewable energy and energy efficiency standards, long a target of FirstEnergy and the fossil fuel industry, at a time when clean energy jobs are booming in the Buckeye State. 

Earlier this year, state lawmakers in Pennsylvania took a pass on a $500 million bailout for nuclear power plants owned by Exelon and FirstEnergy.

Below is an overview of some of the outside lobbying and PR firms, and front groups that FES has employed to buy influence – and potentially bailouts – in Ohio and Pennsylvania, based on analysis of bankruptcy documents and ad disclosures (see the Google Sheet below) reviewed by the Energy & Policy Institute.

Akin Gump: $1.9 million in fees for state government affairs work in Ohio and Pennsylvania

Akin Gump Strauss Hauer & Feld LLP, a top earning D.C. lobbying and law firm, has been representing FES since the start of the utility’s bankruptcy case. In bankruptcy documents, Akin Gump has requested a total of $46,16 9,942 in fees and expenses for its work for FES from March 31, 2018 through April 30, 2019. The bankruptcy court must approve the fees after they are reviewed by a fee examiner and the U.S. Trustee, but so far only minimal deductions have been made to the payments the court has approved.

Included in the total is $1,921,039 in fees for Akin Gump’s work for FES on state government affairs in Ohio and Pennsylvania. Akin Gump included a summary of its work on state government affairs in a bankruptcy case filing from January:

… Akin Gump, in conjunction with retained local advisors in Ohio and Pennsylvania, engaged with state and local officials to discuss potential courses of action in seeking a policy solution specific to each jurisdiction that would enable the continued operation of FES’s nuclear power plants. Akin Gump continued to focus on building support among affected stakeholders, interested parties, and public officials, including supporting the launch of the Ohio Clean Energy Jobs Alliance. Akin Gump professionals provided state-level developments leading up to the mid-term elections, and finally, Akin Gump worked with key officials at FES and retained local advisors in preparation of more actively engaging Ohio and Pennsylvania officials at the start of the new legislative sessions in 2019.

Akin Gump employees gave money to Mike DeWine and Richard Cordray’s campaigns for Ohio governor in 2018, with the lion’s share of that money going to Cordray, who lost the race to DeWine. Akin Gump was also involved in FES’s meetings with DeWine and Corday last year.

The fees Akin Gump has requested also include $802,536 for its work for FES on federal government affairs, and $3,106,150 for its work on energy regulatory issues.

Akin Gump has also been involved in outreach to officials at the White House and Department of Energy to discuss the status of FES’s petition for a federal bailout under Section 202(c) of the Federal Power Act. The Trump Administration’s plans to bail out uncompetitive coal and nuclear power plants have since fizzled, with  Secretary of Energy Rick Perry punting the issue to states like Ohio and Pennsylvania.  

Sitrick & Company: Nearly $1.6 million for public relations  

FES employs Sitrick & Company as its public relations firm and point of contact for the media. The PR firm has requested a total of $1,569,330 for its work for FES from April 2018 through May 2019.

“… Sitrick specializes in addressing sensitive business situations that require communications strategies targeted to a variety of constituencies, including customers, employees, vendors, shareholders, bondholders, and the media,” according to one of the firm’s filings in the bankruptcy case.

“Sitrick’s services are necessary to the Debtors because Sitrick will be able to assist the Debtors in protecting, retaining, and developing the goodwill and confidence of a number of constituency groups and stakeholders during these chapter 11 cases,” the firm said in another filing.

In other words, Sitrick & Company is in the business of corporate crisis management, as the firm says on its website. The Financial Times dubbed Michael Sitrick, the firm’s founder and chairman, “The spin doctor of restructuring.”

Some recent headlines have focused on a judge’s rejection of FES’s restructuring plan, based on concerns that the plan would allow the utility’s parent company FirstEnergy Corp. to escape liability for environmental cleanups at coal and nuclear plants that now face retirement.

Sitrick & Company worked on the launch of the Ohio Clean Energy Jobs Alliance last fall, and helped to draft thank you notes to Richard Cordray and Mike DeWine after the candidates for governor met with FES officials before the election.

Over $1.25 million to five other outside lobbying and communications firms

In April, FES disclosed $1,269,677 in payments to five other outside lobbying and communications firms for their work in Ohio and Pennsylvania since FES declared bankruptcy, including Sitrick & Company, the Dewey Square Group, SRA Communications, the Oxley Group, Ridge Policy Group, and Van Meter, Ashbrook & Associates.

These payments may just be the tip of the iceberg. FES noted it may make further payments at a later time, which would be disclosed in future filings.  Among the payments yet be disclosed is the money paid to new lobbyists that FES has hired since April, including Matthew Borges of Roetzel Consulting Services, the former chairman of the Ohio Republic Party who has voiced support for HB 6. 

FES also hired Ohio lobbyist Matthew Davis of DSD Advisors, an affiliate of Dinsmore & Shohl LLP, in May. Davis has been active tweeting about his work lobbying legislators on HB 6.

Dinsmore Agent Co. is listed as the agent for Generation Now Ohio, Inc., the murky group behind millions of dollars in ads supporting HB 6, in documents on file with the Ohio Secretary of State. Ohio House Republican Floor Majority Leader Bill Seitz, a co-sponsor of HB 6, is an attorney at Dinsmore & Shohl and has received campaign contributions from FirstEnergy.

Dewey Square Group: $800K+ for “management of an advocacy campaign in support of legislation related to nuclear energy in Ohio and Pennsylvania”

FES has paid $807,378 to the Dewey Square Group for fees and expenses related to services described in another bankruptcy filing:

Since March 21, 2018, the Debtors have requested that the firm provide management of an advocacy campaign in support of legislation related to nuclear energy in Ohio and Pennsylvania, and the Firm has agreed to provide such services.

A monthly fee of $98,500 was also identified in the filing.

The Dewey Square Group worked on the launch of the Ohio Clean Energy Jobs Alliance, and the firm’s executives and staff contributed money to Richard Cordray’s unsuccessful campaign for governor.

Metadata identified Christopher Curry, a lobbyist at the Dewey Square Group, as the “author” of public testimony delivered by seven proponents of HB 6 at a hearing in May.

SRA Communications: $245K+ for “coalition building services” in Pennsylvania

FES has paid $247,486 to SRA Communications for fees and expenses. SRA too described its work for FES in a bankruptcy case filing:

Since July 26, 2018, the Debtors have requested that the Firm provide coalition building services alongside Nuclear Power Pennsylvania—a statewide coalition of over 40 members, including the Debtors, that works to educate Pennsylvanians about the economic and environmental benefits of nuclear energy, and the industry’s positive impact on local communities throughout the state. The services that the Firm provides include, among other things, working with member companies to recruit new members and provide them with coalition information and resources; representing Nuclear Powers Pennsylvania at community and business events; conducting daily media monitoring of pro- and anti-nuclear commentary in the news and on social media; and managing digital tools for the coalition.

“The Firm will be compensated for its services by payment of a monthly fee of $18,250, plus reimbursement of necessary expenses and other charges incurred by the Firm,” SRA also said. “The principal designated to represent the Debtors is Steve Aaron.”

Aaron has also been named in TV ad disclosures on file with the Federal Communications Commission as the spokesperson for Clean Jobs for Pennsylvania, LLC, which is listed with the Securities & Exchange Commission as a subsidiary of Exelon.

Oxley Group LLC: $100+K for lobbying in Ohio

The Oxley Group has been paid $102,159 by FES for “government relations consulting services”, which according to a bankruptcy document have included:

Facilitation of meetings with Ohio Legislators and other interested parties on behalf of FES

Advocacy on behalf of FES to all stakeholders in the Ohio Legislature and Executive Branches of State Government

Participation in the process of selecting a proposed solution to market to the current General Assembly and Governor’s Office

The filing also showed Oxley Group’s monthly fee increased from $10,000 to $15,000, as the firm’s work for FES shifted from “strategy development to execution of the strategy,” and it planned to hire the Tarrance Group to “provide certain polling and focus group research services in support of FES’s legislative efforts.”

Ridge Policy Group: $65K+ to the lobbying firm led by former secretary of Homeland Security and Pennsylvania Governor Tom Ridge

FES has also doled out $67,654 to the Ridge Policy Group for work defined in an October bankruptcy case filing:

The firm… has provided government relations representation, namely, intelligence gathering and advocacy before the General Assembly and/or the executive department of the State of Pennsylvania.

A monthly fee of $7,500 was also listed in the filing.

Tom Ridge, the former secretary of Homeland Security and governor of Pennsylvania, testified in support of bailing out the nuclear power plants at a Pennsylvania House committee hearing in April. Ridge had to be asked twice before he admitted to lawmakers that his firm’s clients include FES, according to local NPR reporter Marie Cusick.

Van Meter, Ashbrook & Associates: $45K for lobbying

FES has also paid $45,000 to Van Meter, Ashbrook & Associates.

A bankruptcy filing reveals that Van Meter, Ashbrook & Associate is charging FES a monthly fee of $15,000 for government affairs and lobbying services “similar to those provided by the Oxley Group…”

“… the Firm has certain specific relationships and expertise that are not shared by other professionals being retained by FES,” the document also notes.

FirstEnergy and Exelon-backed front groups have spent over $610K on Facebook and Twitter ads

A review of ad disclosures on file with Facebook and Twitter identified nearly $610,683 in spending on social media ads targeting Ohio and Pennsylvania by three pro-nuclear bailout groups backed by FirstEnergy and Exelon – and that’s not counting the over $220,000 spent on Facebook ads by the dark money group Generation Now, Inc.

The Ohio Clean Energy Jobs Alliance has run $291,661 in Facebook ads, the first of which aired when the coalition was launched in September. The ads are marked as paid for by FirstEnergy Solutions.

Nuclear Powers Pennsylvania has run $220,678 in ads on Facebook ads since May 2018. A list of coalition members is published on the group’s website, and discloses that Exelon and Entergy are members.  

Clean Jobs for Pennsylvania has run $85,344 in Facebook ads since last May. The ads are marked as paid for by Clean Jobs for Pennsylvania, LLC, which as noted earlier is a subsidiary of Exelon and has also ties to FES through SRA Communications. The group has also paid over $13,000 for Twitter ads.

Top image of FES’s Beaver Valley nuclear power plant is a work of a Nuclear Regulatory Commission employee, taken or made as part of that person’s official duties. As a work of the U.S. federal government, the image is in the public domain in the United States. Source: Wikipedia Commons