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 a minimum of approximately $185,000 on ads that have run on Facebook, Twitter, and television.
State lawmakers in Pennsylvania are now considering a $500 million bailout for nuclear power plants owned by Exelon and FirstEnergy, even though most of those plants remain profitable.
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 supportive of efforts 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.
State legislators could introduce a new bill to bail out FES’s nuclear plants in Ohio as soon as Friday. While FES has billed that proposal as a way to save jobs, preserve “clean energy” from nuclear power, and combat climate change, a leaked draft of the bill that was published last week by the Energy News Network included a sneak attack that would effectively kill Ohio’s renewable energy and energy efficiency standards. The renewed attack on Ohio’s clean energy standards, long a target of FirstEnergy and the fossil fuel industry, comes at a time when clean energy jobs are booming in the Buckeye State.
Clean energy advocates have also warned that the draft bill could allow super-polluting coal-fired power plants in Ohio to receive a bailout as well, all under the auspices of a new “clean air” program.
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: $1.25 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 $35,936,644.75 in fees and expenses for its work for FES from March 31, 2018 through January 31, 2019. The bankruptcy court must approve the payments after they are reviewed by a fee examiner and the U.S. Trustee, and so far only minimal deductions have been made to the payments that have been approved.
Included in that total is $1,253,764 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 last fall 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 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 both of the candidates last year.
The fees Akin Gump has requested also include $729,746 for its work for FES on federal government affairs, and $2,381,207 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 fizzled, though Secretary of Energy Rick Perry recently voiced renewed support for the idea.
Sitrick & Company: Nearly $1.2 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 $1,191,312.79 for its work for FES from April 2018 through February 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.”
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 $725,000 to other outside lobbying and communications firms
In January, FES disclosed $725,792 in payments to four other outside lobbying and communications firms for their work in Ohio and Pennsylvania in 2018. In addition, FES paid $60,000 to a fifth firm for its work in Ohio, but that money was returned to FES because the firm failed to file the proper paperwork with the bankruptcy court.
These payments may also just be the tip of the iceberg. FES noted it may make further payments for services rendered in 2018, and that those payments would be disclosed at a future time.
Dewey Square Group: $540,000+ for “management of an advocacy campaign in support of legislation related to nuclear energy in Ohio and Pennsylvania”
FES paid $541,181 to the Dewey Square Group last year for 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.
SRA Communications: $80,000+ for “coalition building services” in Pennsylvania
FES paid $80,717 to SRA Communications in 2018 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: Over $61,000 for lobbying in Ohio
The Oxley Group was paid $61,628.70 by FES in 2018 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 last month, 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: $42,000+ to the lobbying firm led by former secretary of Homeland Security and Pennsylvania Governor Tom Ridge
FES also doled out $42,265.62 to the Ridge Policy Group in 2018 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 included in the filing.
Tom Ridge, the former secretary of Homeland Security and governor of Pennsylvania, testified before state lawmakers this week in support of bailing out Pennsylvania’s nuclear power plants. Ridge had to be asked twice before he admitted to lawmakers that his firm’s clients include FirstEnergy, according to local NPR reporter Marie Cusick.
Van Meter, Ashbrook & Associates: $60,000 (refunded to FES) for lobbying Ohio
FES also paid $60,000 to Van Meter, Ashbrook & Associates last year, but according to bankruptcy records the money was returned to FES because the lobbying firm failed to properly file paperwork with the bankruptcy court.
The paperwork has now been filed and 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 are running ad campaigns on social media and TV
A review of ad disclosures on file with Facebook, Twitter, and the FCC identified nearly $185,000 in spending on social media and television ads targeting Ohio and Pennsylvania by the pro-nuclear bailout groups backed by FirstEnergy and Exelon.
The Ohio Clean Energy Jobs Alliance has run $52,838 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.
Clean Jobs for Pennsylvania has run $61,885 in Facebook ads since last May, nearly $6,300 of which ran over the course of a week in late March and early April of this year. 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 $7,000 for Twitter ads.
Nuclear Powers Pennsylvania has run $35,127 in ads on Facebook ads since last spring, including $7,558 in ads that ran in late March in early April. A list of coalition members is published on the group’s website, and discloses that Exelon and Entergy are members.
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