AEP contributed to dark money group that gave money to Generation Now

July 25: This post has been updated significantly upon receiving a statement from AEP acknowledging that it funded Empowering Ohio’s Economy.

American Electric Power (AEP) has acknowledged that it funded a dark-money group that itself contributed funding to Generation Now, the group charged in the federal criminal complaint that centered around a $61 million bribery scheme involving FirstEnergy. 

The group, called Empowering Ohio’s Economy, Inc., is a 501(c)(4) organization that paid $100,000 to Generation Now in 2017, and another $50,000 in 2018. The Energy News Network first reported the funding earlier this year.  

Neither Empowering Ohio’s Economy nor AEP are mentioned by name in federal prosecutors’ criminal complaint.

The complaint does, however, describe a “Coalition” as one of the entities controlled by the criminal enterprise. It says the Coalition was funded in part through “$200,000 from an interest group that was funded exclusively by $13 million from another energy company that supported HB 6 and separately paid $150,000 to Generation Now during the relevant period.”

The Energy News Network reported that Empowering Ohio’s Economy “gave $200,000 for public advocacy to the Coalition for Growth & Opportunity in 2017” in addition to the $150,000 it gave to Generation Now in 2017 and 2018. 

Those details would appear to match Empowering Ohio’s Economy with the description of the “interest group” named in the complaint, and would appear to match AEP with the description of “another energy company that supported HB 6” and exclusively funded Empowering Ohio’s Economy with “$13 million.”

The Columbus Dispatch has confirmed that AEP is the energy company cited in the affidavit as funding that interest group, citing a source close to the investigation.

AEP spokesperson Melissa McHenry confirmed to the Energy and Policy Institute that AEP has funded Empowering Ohio’s Economy, though would not comment on the level of funding.

“AEP has contributed to a variety of 501(c)(4) social welfare organizations to promote economic development and educational programs across our service territories,” McHenry said. “AEP has made contributions to Empowering Ohio’s Economy to support its mission of promoting economic and business development and educational programs in Ohio. These contributions were done appropriately, and we have every reason to believe that the organizations we support have acted in a lawful and ethical manner. We do not comment on the amounts of contributions to specific organizations.”

“AEP has not been approached by the investigation and none of the wrongful conduct in the criminal complaint involves AEP or its subsidiaries,” she continued. “Neither AEP nor any of its subsidiaries made any contributions to Generation Now.”

A top lobbyist for American Electric Power (AEP), Tom Froehle, served on the board of directors of Empowering Ohio’s Economy, Inc., according to the group’s 2018 Form 990 report to the IRS. The report also lists the $50,000 payment from Empowering Ohio’s Economy to Generation Now for “advocacy,” in that year first identified by The Energy News Network, along with payments to other 501(c)(3) and 501(c)(4) organizations. 

Tom Froehle is the vice president of external affairs for AEP, and he continues to be a director of Empowering Ohio’s Economy currently, McHenry confirmed.

AEP benefited from coal bailouts in HB 6

Froehle testified in support of House Bill 6, the 2019 Ohio law at the center of the federal criminal complaint against Ohio House Speaker Larry Householder, Generation Now, and a network of political consultants and lobbyists who backed the legislation. 

In addition to offering bailouts to FirstEnergy’s nuclear plants, HB 6 also forces Ohio ratepayers to subsidize two coal plants, one in Ohio and one in Indiana, owned by a consortium of utilities called the Ohio Valley Electric Corporation (OVEC). AEP is the largest shareholder in OVEC, with a 43% ownership stake, over double any other utility.

The OVEC coal plant subsidies in HB 6 cost Ohio ratepayers “up to $1.50 monthly (and up to $1,500 per month for commercial and industrial users) to subsidize OVEC’s Kyger Creek and Clifty Creek coal plants,” according to the Cleveland Dispatch.

Many state lawmakers and Governor Mike DeWine now want to repeal the law, which bailed out coal and nuclear power plants, while rolling back Ohio’s clean energy standards for utilities. 

Empowering Ohio’s Economy described itself as economic development organization, but donated politically

Empower Ohio’s Economy lists its mission in the Form 990 it filed to the IRS for 2018 as “Promoting Ohio as well-suited to host and support major conventions or similar events and as an attractive destination for travel, business meetings and vacations. The methods for achieving these purposes include funding and hosting major conventions and meetings via interenet [sic], professional organizations, and social media education to the general public.” 

In 2018, Empower Ohio’s Economy also donated $50,000 to the Rule of Law Defense Fund, a group that has worked with Republican state attorneys general to fight EPA rules. 

Froehle has been a lobbyist for AEP since 2011, according to state lobbying records. Froehle previously worked for McNees Wallace & Nurick and lobbied for the Industrial Energy Users of Ohio, where Public Utilities Commission of Ohio chairman Samuel Randazzo was also employed.

Corrections: Earlier versions of this report slightly misstated Froehle’s title, and provided a dated statistic that listed AEP’s ownership stake in the OVEC coal plants at 39%. It is 43.47% as of the end of 2019.

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