** Bill Seitz’s FirstEnergy bailout bill is one target of a subpoena ([link removed])
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By Dave Anderson on Sep 09, 2020 04:59 pm
Records show Rep. Bill Seitz, the third-ranking Republican in the Ohio House, worked with FirstEnergy to draft a nuclear power plant bailout bill that’s now the subject of a federal subpoena.

As part of the federal racketeering case against the now-former Ohio House Speaker Larry Householder and several associates, the FBI subpoenaed the Ohio House in July for records related to four bills ([link removed]) . The bills, introduced between 2017 and 2019, all aimed to bail out nuclear plants owned by a subsidiary of FirstEnergy (FirstEnergy Solutions or FES) that filed for Chapter 11 bankruptcy in 2018, and emerged this February as a separate new company called Energy Harbor.

The last of those bills, House Bill 6, passed last year and is now at the center of the federal case against Householder and four others ([link removed]) , who are charged with secretly using $60 million from FirstEnergy to support the bill that will force $1 billion in subsidies for the nuclear plants on ratepayers.

Seitz has not been named or charged in the racketeering case, but before Householder’s return to the speakership in 2019 ([link removed]) , Seitz led the charge on several 2017-18 energy bills that paved the way for HB 6. Those earlier bills sought to separately subsidize coal ([link removed]) and nuclear plants, ([link removed]) and roll back Ohio’s renewable energy and energy efficiency standards ([link removed]) . House Bill 6 packaged core elements of those earlier proposals together into what’s been called the “worst energy bill” of the century ([link removed]) .

Seitz, who has served as the House Majority Floor Leader since June of 2017, remains a staunch defender of HB 6. He’s refused to step down from his leadership position despite a request to do so from the new speaker Bob Cupp, and is said to be considering a run for the speakership next year ([link removed]) .


** Seitz worked with a FirstEnergy lobbyist to draft Zero Emissions Nuclear legislation
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Seitz reportedly told a conservative radio host last month ([link removed]) :

“Those who say that we should all go because we’re guilty by association with Householder are probably auditioning for the role of (Sen.) Joe McCarthy in the next Red Scare movie or perhaps auditioning for a role in the next Salem Witch Trial movie because guilt by association is no kind of standard by which to punish people who had nothing to do with any of this alleged scandal.”

Emails and other records obtained via a public records request filed by the Energy and Policy Institute show that when Seitz previously served as chair of both the Ohio House Majority Policy Caucus and Public Utilities Committee in early 2017, he worked closely with a lobbyist from FirstEnergy on drafting what would become House Bill 178. The failed bill, which is now a subject of the federal subpoena ([link removed]) targeting the Ohio House, sought to establish a Zero Emissions Nuclear (ZEN) program to subsidize the same FirstEnergy nuclear plants later subsidized by HB 6.

“Should Ohio move forward with approving the ZEN at its current rate and the plants run very reliably, that’s worth about $300 million a year that would flow to those two nuclear units,” Charles Jones, the CEO of FirstEnergy, said on an earnings call that year ([link removed]) .

Months earlier, records show that Seitz ([link removed]) and his then-aide Jimmy Wolf ([link removed]) worked with Ty Pine, director of state affairs in Ohio for FirstEnergy ([link removed]) , and Legislative Exchange Commission staff ([link removed]) to draft the bill. Pine is likely “Company A Ohio Director of State Affairs” described, but not named, in a federal criminal complaint ([link removed]) as having had 188 contacts with Householder between February of 2017 and July of 2019, when HB 6 was finally signed into law.

In January of 2017, FirstEnergy posted a presentation on its ZEN legislation proposal online ([link removed]) . It claimed that replacing the Davis-Besse and Perry nuclear plants with wind power would require too much land and be too costly, based on a report by the Nuclear Energy Institute. Pine forwarded a copy of that presentation to Seitz ([link removed]) on January 30, and a later email ([link removed]) shows the two discussed the proposal around the same time.

Seitz publicly addressed the ZEN proposal the following month at the annual Manufacturers’ Education Council Energy Management Conference, ([link removed]) which counted FirstEnergy among its sponsors. At the same conference, Seitz also attacked Ohio’s renewable energy standards for electric utilities. Sam Randazzo, a longtime Seitz ally ([link removed]) who now serves as chairman of the Public Utilities Commission of Ohio, served on the planning committee for the conference ([link removed]) .

In March, Pine emailed a number of amendments ([link removed]) to the draft ZEN bill to Seitz and state senator John Eklund ahead of a call with Mike Dowling, the senior vice president of external affairs for FirstEnergy Service Company. Dowling is now also implicated in the federal racketeering case ([link removed]) , though he has not been charged. Pine used Eklund’s email address at the law firm Calfee, Halter & Griswold, which later described FirstEnergy as a “significant, long-term client” in a bankruptcy court filing ([link removed]) .

When the ZEN bill was finally formally introduced in April of 2017, another state representative named Anthony Devitis was listed as the bill’s sponsor in the House. Eklund sponsored ([link removed]) a Senate companion bill, SB 128.

After the grid operator that coordinates the wholesale electricity market which includes Ohio, PJM, voiced concerns about the ZEN bill, Pine recruited Seitz and Eklund to respond to PJM and provided the lawmakers with a draft letter. ([link removed])

June 12 email from Ty Pine (p. 1) ([link removed])

IFRAME: [1]//www.documentcloud.org/documents/4404395-FirstEnergy-Coordinated-Legislative-Response-to/annotations/414322.html?embed=true&maxheight=1000&maxwidth=900

View entire document on DocumentCloud ([link removed])

Eklund defended HB 6 last week ([link removed]) at an Ohio Senate hearing on new legislation to repeal the 2019 law.

Like the later HB 6, the 2017 ZEN bill ostensibly sought to subsidize the nuclear plants due to their zero-emissions benefits, even as FirstEnergy and Seitz attacked renewables that produce no emissions when they generate electricity.


** Seitz paved the way for HB 6’s coal subsidies and clean energy standards rollback with other earlier bills sought by AEP, Duke Energy, and Murray Energy
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Around the same time that Seitz was working on the 2017 ZEN bill, he worked on a separate bill to roll back Ohio’s clean energy standards ([link removed]) , dubbed HB 114. Robert Murray, then CEO of coal producer Murray Energy, asked for legislation to end the same standards in a private letter to Seitz that January ([link removed]) .

Seitz also worked with lobbyists at American Electric Power in 2017 to draft another bill ([link removed]) , HB 239, that would have delivered over $250 million in subsidies to two-coal fired power plants operated by the Ohio Valley Electric Corporation (OVEC), which today counts AEP, Duke Energy, Dayton Power & Light, and Energy Harbor among its equity owners.

When HB 239 was introduced, two other state representatives were listed as the sponsors. Lobbyists for AEP and Duke Energy provided talk points and draft testimony ([link removed]) .

When Gov. Mike DeWine signed House Bill 6 into law in 2019, it included $1 billion in nuclear subsidies sought by FirstEnergy, up to $450 million in new coal subsidies sought by the OVEC utilities ([link removed]) , and the clean energy standards rollback sought by Murray Energy and other opponents of clean energy policies.

The federal criminal complaint filed in the Householder case clearly implicates FirstEnergy ([link removed]) , AEP ([link removed]) , and Murray Energy ([link removed]) as all having provided the money that ultimately went toward bankrolling the $60 million fund at the core of the alleged racketeering scheme. Prosecutors have not formally named or charged any of the companies in the case, but they have subpoenaed FirstEnergy ([link removed]) .


** Seitz owns stock in one utility that benefited from HB 6, and counts beneficiaries among his top donors
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Financial disclosure forms filed by Seitz ([link removed]) show he has owned stock in Duke Energy ([link removed]) for years. In a quarterly disclosure filed in March ([link removed]) of this year, Duke Energy reported a $5 million decrease in revenues “due to lower OVEC sales” for its Ohio subsidiary, but noted “the new Legacy Generation Riders arising from Ohio HB6” partially offset its losses.

FirstEnergy, AEP, Murray Energy, and other beneficiaries of HB 6 also rank among Seitz’s top campaign contributors, according to Followthemoney.org ([link removed]) . FirstEnergy most recently reported a $3,500 contribution to Seitz for Ohio made on July 16 ([link removed]) , the same day the federal criminal complaint against Householder was filed in court.


** Seitz used his Dinsmore & Shohl email account to communicate with FirstEnergy about the draft ZEN bill
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Seitz is also an attorney at the law firm Dinsmore & Shohl, and used his Dinsmore.com email account to communicate about the ZEN bill. He also made handwritten notes about the bill on Dinsmore stationary ([link removed]) .

While Seitz was busy working with FirstEnergy on the draft 2017 ZEN bill, a group called Generation Now Inc. was incorporated in Delaware. Generation Now is now another defendant in the federal racketeering case against Householder ([link removed]) , and has connections to Dinsmore & Shohl. The 501(c)(4) group allegedly secretly used millions of dollars from FirstEnergy ([link removed]) to help elect Householder as House Speaker, provide advertising support to legislators backing HB 6, and then defend the bill against a ballot initiative effort to repeal it.

Dinsmore Agent Company served as the Ohio agent for Generation Now Inc ([link removed]) . from July 2017 until July 22, 2020 – one day after the federal investigation was announced at a press conference.

Eric Lycan, the Kentucky-based treasurer for Generation Now, was an attorney at Dinsmore & Shohl until April 2019 ([link removed]) . FirstEnergy started to funnel money into Generation Now in March 2017, when Seitz was still working with the utility on drafting the first ZEN bill.

Matthew Davis of DSD Advisors, another Dinsmore & Shohl affiliate, also lobbied on HB 6 on behalf of FirstEnergy Solutions ([link removed]) .

After HB 178 failed to move forward, Seitz cosponsored a new ZEN bill, House Bill 381, that Generation Now supported. This bill failed too and is now a subject of the federal subpoena.

Dinsmore & Shohl is now representing Murray Energy in its bankruptcy case.

In March, Seitz told the Energy News Network ([link removed]) that he was “pleased” that some of his colleagues at Dinsmore & Shohl supported HB 6, but said it would be “ridiculous” to imply anything inappropriate about his support for HB 6 because of his firm’s connections to the bill.

“My support for the elements of HB 6 (end the mandates, support OVEC, support nuclear) predates HB 6 through legislation I co-sponsored in the last general assembly,” Seitz said.


** Mention that the ZEN program would force consumers to compensate FirstEnergy for “marketplace losses” was removed from an internal Ohio House policy paper
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An internal Ohio House policy paper on the ZEN program ([link removed]) obtained from Seitz via a public records request identified another reason for the subsidies.

“What is ZEN?” a bullet in the policy paper read.

“Credits paid for by FirstEnergy customers on top of normal operational costs to compensate marketplace losses,” a sub-bullet point said below.

The document was marked with notes in what appears to be Seitz’s handwriting and markups, with the words “compensate marketplace losses” replaced with “recognize zero carbon emissions environmental benefits of nuclear power.” The handwriting on the document is similar to the writing on other records that bear Seitz’s name ([link removed]) .

Those changes are reflected in another version of the ZEN policy paper ([link removed]) that followed.


** A conversation about bailouts with the Nuclear Energy Institute at a meeting of the American Legislative Exchange Council
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Seitz is a longtime board member of the American Legislative Exchange Council (ALEC), the fossil fuel and utility industry-backed source of model bills attacking state clean energy policies around the country.

After ALEC’s 2017 Spring Task Force Meeting in Charlotte, North Carolina, Seitz received an email from Michael McGarey, senior advisor on state and local affairs for the Nuclear Energy Institute.

“Good to see you at ALEC,” the email’s subject line read.

“I enjoyed our conversation last week and I appreciated your insights on our efforts to preserve reliable, zero-carbon baseload power in Ohio,” wrote McGarey ([link removed]) .

A report by ALEC that year ([link removed]) pointed to a “nuclear renaissance” in state policymaking, and pointed to Ohio’s ZEN legislation as one example.

Years earlier, Seitz brought ALEC and the Heartland Institute’s national campaign against state renewable energy standards to Ohio ([link removed]) . Seitz spoke ([link removed]) on a panel on “Renewable energy mandates reform” at ALEC’s 2015 Annual Meeting, which was sponsored ([link removed]) by AEP, Duke Energy, and ExxonMobil. The Heartland Institute received $130,000 from Murray Energy in 2018 ([link removed]) , a statement of financial affairs ([link removed]) filed last year in the coal producer’s bankruptcy case revealed.

The post Bill Seitz’s FirstEnergy bailout bill is one target of a subpoena ([link removed]) appeared first on Energy and Policy Institute ([link removed]) .

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