A lobbyist for the FirstEnergy Solutions Bondholder Group helped organize a community meeting where the utility’s CEO revealed how a “Clean Air” bill designed to subsidize its nuclear plants in Ohio would also bail out the super-polluting W.H. Sammis coal plant.
The meeting on Sammis, described by a local newspaper as “hastily arranged,” came in June, before the bill was passed and not long after Republican State Senator Frank Hoagland voiced concerns about the legislation.
“The problem I see is you’re putting people out of work then turning around and asking them to pay to keep the nuke plants open,” Hoagland told Charles Moore, FES’s chief restructuring officer, during a committee hearing on the bill.
Hoagland’s district is home to the Sammis plant. FES had previously announced plans to retire the plant’s last remaining coal and diesel generating units in 2022, but noted those plans could be reversed if it received government assistance for the plant.
“Mr. Moore assured the lawmaker the company is working to find ways to maintain that plant despite its proposed deactivation,” as Gongwer News Service first reported.
Emails obtained by the Energy & Policy Institute through an Open Records Law request show that a lobbyist named Lori Herf then invited Hoagland to speak at a “Community Meeting on the Future of the Sammis Generating Station Featuring FirstEnergy Solutions CEO John Judge” in Steubenville.
“Lori said this meeting was very much prompted by your comments and wishes that you had expressed about them connecting the information with all stakeholders and the community as a whole regarding the Sammis plant,” an aide to Hoagland said in one email.
At the meeting, Judge said that the future of Sammis depended on passage of HB 6.
“House Bill Six is really designed to support our nuclear plants, and all the money from that would go to those nuclear plants,” Judge said. “But at the same time, it would make our company economically healthy enough that we would be able to look at other investments like investing in the Sammis Plant.”
Judge said the company would invest $40-50 million in Sammis.
“You’ve got to put money back into it to get it running reliably and safely,” he also said. “We’re planning to make that investment, and after that we’ll need to spend (more money) to keep it running well.”
Opponents of the bill warned that the Sammis announcement showed how the nuclear bailout package could become a “slush fund” for FES.
The Ohio Clean Energy Jobs Alliance, a coalition “powered by FirstEnergy Solution” to support passage of HB 6, had sold the bill as a way to preserve zero emissions power generation and jobs at FES’s Davis-Besse and Perry nuclear power plants. The word “Sammis” appears nowhere on the Alliance’s website.
House Bill 6 also extended a consumer-bailout for two-coal fired power plants operated by the Ohio Valley Electric Corporation, which is owned by American Electric Power, Dayton Power & Light, Duke Energy, and other electric utilities. In addition, it rolled back Ohio’s renewable energy and energy efficiency standards. Reporter David Roberts dubbed it the “worst energy bill of the 21st Century” in an in-depth article for Vox.
The FirstEnergy Solutions Bondholders Group represents powerful investors with stakes in FES’s coal and nuclear power plants
The Ohio Manufacturing Association, which opposed HB 6, warned in July that the bill “contains nothing to protect customers. Instead, it would protect investors who own the (nuclear plants), providing them staggering profits.”
Lori Herf’s lobbying registration listed her employer as the FirstEnergy Solutions Bondholder Group, an entity that is not mentioned publicly anywhere outside of her filings with the Ohio Lobbying Activity Center.
“Kramer Levin was retained by holders of more than $2 billion in FES debt in connection with a potential restructuring of FES and the parent company’s separation,” according to the Kramer Levin website.
Kramer Levin and Baker Hostetler have listed the creditors they are representing in the case in statements filed with the bankruptcy court. The latest list includes the Chicago-based Nuveen Asset Management, a subsidiary of TIAA-CREF, and New York-based Avenue Capital Management II, which will respectively own 30 and 15 percent of the shares in the New HoldCo that will emerge when FES exits bankruptcy.
The list of FES creditors represented by Kramer Levin and Baker Hostetler also includes other powerful investment firms that have multi-million dollar “economic interests” in FES:
Alliance Bernstein, L.P., New York, NY
Allstate Insurance Company, Northbrook, IL
Barclays plc, New York, NY
Black Rock Financial Management Inc., New York, NY
Covekey Management, LP, Houston, TX
Capital Research and Management Company, Los Angeles, CA
