Top candidates for Ohio House speaker back bailouts for utilities that back their campaigns

Updated on May 11, 2018: We’ve updated this post with a response from Rep. Larry Householder regarding his flight to Washington, D.C. aboard FirstEnergy’s corporate jet for President Donald Trump’s inauguration, and why he later sponsored a bill to bail out FirstEnergy’s nuclear power plants in Ohio. 

Larry Householder and Ryan Smith, the two front-runners in the race to replace Cliff Rosenberger as Ohio House speaker, have both signed onto bills that would bail out old and uncompetitive power plants owned by powerful electric utilities that have contributed money to their campaigns.

Smith is a primary sponsor of a bill to bail out two Cold War era coal-fired power plants operated by the Ohio Valley Electric Corporation (OVEC). He has received $35,500 in campaign contributions from political action committees affiliated with utilities that own shares of OVEC since the start of Ohio’s current two-year legislative cycle in 2017.

Documents obtained by the Energy and Policy Institute also show that Smith received a “confidential” draft of the legislation, along with talking points and draft sponsor testimony, from utility lobbyists before the bill was introduced.

Householder is co-sponsoring a bill to bail out two nuclear power plants owned by the now bankrupt FirstEnergy Solutions that are currently slated for closure. He has received $12,500 in campaign cash from the FirstEnergy PAC since the start of Ohio’s current two-year legislative cycle in 2017.

A third candidate, Dorothy Pelanda, has also received campaign contributions from utilities, but is not currently sponsoring any bailout bills that would benefit her donors in the utility industry.

All three candidates co-sponsored and voted for a bill, HB 114, to roll back Ohio’s renewable energy and energy efficiency standards that the House passed last year.

Rosenberger recently resigned from the Ohio House amid an FBI investigation into his travel and expenses, and Republicans will vote for a new speaker on May 15, 2018.

Ryan Smith: A mouthpiece for utilities seeking bailouts for coal-fired power plants

Reps. Smith and Rick Carfagna are the primary sponsors of the bill, HB 239, to bail out OVEC’s coal-fired power plants. OVEC is collectively owned by a number of utilities, including American Electric Power (AEP), Buckeye Power, Dayton Power & Light (DP&L), Duke Energy, and FirstEnergy.

A few weeks before that bill was introduced, Smith’s staff received an email from Christine Wright, the manager of state government affairs for AEP Ohio.

“Attached is draft legislation for Chairman Smith’s review for potential sponsorship,” Wright wrote to Smith’s legislative aides Grace Snider and Taylor Stepp on May 11, 2017. “Please let me know if you have any questions or would like additional details.”

Attached was a “confidential” draft of the OVEC bailout bill.

Wright sent the “confidential” draft bill to Carfagna’s aide Abe Jacob one day earlier.

Earlier emails show that Wright had already been working on the “confidential” draft bill with Rep. Bill Seitz and his aide Jimmy Wolfe for some time. At the time, Seitz was chair of both the Ohio House Majority Caucus Policy Committee and Public Utilities Committee, and he now serves as the Majority Floor Leader.

The documents, and others discussed below, were obtained via a public records request filed by the Energy and Policy Institute. More documents related to HB 239 can be found here. 

Just over a week later, on May 19th, Smith received an email from Ryan Gentil, a lobbyist for Duke Energy, with a document that contained three pages of “OVEC talking points” attached.

“Here are talking points and some history of Ovec [sic],” Gentil said in his email to Smith. “Let us know if you’d like to sit down and discuss. Thanks.”

A few days later, on May 22, Smith and Carfagna’s staff received another email from Wright, who attached ghostwritten draft sponsor testimony for the bill that was approved by the utilities.

“Attached is draft sponsor testimony for the OVEC legislation,” Wright said. “It has been signed off on by all four companies.”

“It is drafted as if Rep Smith will be providing the testimony,” said Wright.

Smith and Carfagna’s joint written testimony, delivered to the Ohio House Public Utilities Committee at a hearing when the bill was introduced the next day, matched the utilities’ draft nearly word for word.

Kyger Creek Generating Station, one of the two coal plants their bill would bail out, is located in Smith’s district. The other coal plant, the Clifty Creek Generating Station, is located Madison, Indiana.

Bailing out the plants would come at a cost to utility customers.

“Potentially, $256.6 million could be recovered annually from ratepayers for the 24-year period, 2017 to 2040,” according to a fiscal analysis of Smith and Carfagna’s bill, as introduced.

A substitute bill has been floated in the Public Utilities Committee, but it could still potentially cost utility customers millions of dollars per year.

Smith received campaign contributions from the utilities that would benefit from his bailout bill

Since the start of Ohio’s 2017-18 legislative session, Smith has received a total of $35,500 in campaign contributions from PACS affiliated with the utilities that own shares of OVEC. This total includes money from the Action Committee for Rural Electrification (Ohio ACRE), which counts among its backers Ohio’s Electric Cooperatives, a proponent of Smith and Carfagna’s bailout bill that owns a share in OVEC.

• $12,500 from the AEP Committee for Responsible Government
• $9,000 from the First Energy PAC
• $6,500 from Ohio ACRE
• $5,500 from the Duke Energy Corporation PAC
• $2,000 from the DP&L Responsible Citizenship Fund

The AEP Committee for Responsible Government led the pack with $12,500 in contributions to Smith’s campaign in 2017, just shy of the maximum amount allowed per calendar year under Ohio’s limits for campaign contributions. The total included a $5,000 campaign contribution that Smith received on April 4, 2017, about five weeks before he received AEP’s request to sponsor the OVEC bailout bill.

Smith’s campaign received another $7,500 contribution from AEP on June 20, 2017, the same day Steve Nource, AEP’s Chief Ohio Regulatory Counsel, testified in support of Smith’s bill before the Ohio House Public Utilities Committee.

Carfagna has so far received a total $8,950 in campaign contributions from these same utility PACS during the 2017-18 legislative session, including:

• $5,000 from AEP
• $1,850 from DP&L
• $1,500 from Duke Energy
• $600 from Ohio ACRE

Seitz, who has been the most vocal proponent of Smith and Carfagna’s bill, has received a total of $22,500 in campaign contributions from these utility PACS during the same time period.

• $10,000 from AEP
• $8,000 from Ohio ACRE
• $3,500 from Duke Energy
• $1,000 from DP&L

Seitz received $1,000 from Duke Energy on April 24, 2018, which was after he faced calls for his resignation from female colleagues concerned about inappropriate comments he made a roast style event.

Larry Householder flew to Trump’s inauguration on FirstEnergy’s corporate jet, then later backed a bill to bail out the utility’s nuclear power plants

Rep. Householder is co-sponsoring another bill, HB 381, that would bail out FirstEnergy Solutions’ nuclear power plants.

Jeremy Pelzer at the Cleveland Plain Dealer recently reported on how FirstEnergy gave more than $5,000 to Householder’s campaign in the first two months of 2018, when it also doled out campaign cash to Ohio House candidates backing Householder’s bid to become the next Speaker.   

Householder and his sons flew to DC on one of FirstEnergy’s corporate jets to attend President Donald Trump’s inauguration back in January 2017, according to a Dayton Daily News report from March 2017:

Householder, who names energy as one of the top issues facing Ohio, said he plans to either pay the cost of the flights out of his own pocket or disclose it on his ethics statement. He said he is still waiting to be billed by FirstEnergy for the trip.

Householder did not include the trip on his financial disclosure form for 2017.

The Energy and Policy Institute emailed Householder to ask if he repaid FirstEnergy for the flight, and received a response back from his legislative aide: 

Representative Householder told me the reason that the trip was not listed in his financial disclosure was because he paid for the flight as soon as he received the bill. Representative Householder cosponsored H.B. 381 because Ohio’s nuclear power plants are the largest source of carbon-free generation in our state. These plants support hundreds of jobs, and millions in tax revenue for their local schools and governments.

FirstEnergy made a $2,500 campaign contribution to Householder at a June 6, 2017 fundraising event, and Householder received another $5,000 from the utility on August 29 of that year.

The FirstEnergy-backed bailout bill he co-sponsored was introduced on October 11, 2017.

All told, Householder has received over $12,500 in campaign contributions from FirstEnergy since the start of the 2017-18 legislative session.

Dorothy Pelanda has also received campaign cash from utilities that are seeking bailouts

 Rep. Dorothy Pelanda does not appear to have taken a public position on the bills to bail out OVEC’s coal-fired power plants or FirstEnergy’s nuclear plants.

Pelanda did receive $5,000 in campaign contributions from Duke Energy in 2017. She also received $2,500 from AEP, $1,500 from Ohio ACRE, and $500 from DP&L last year, for a total of $9,500 from bailout seeking utilities.

The bills backed by Smith and Householder, respectively, have been stalled in committee for some time, but the selection of either state representative as the new Ohio House speaker could potentially breathe new life into the bailout debate in 2018.

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