Five of the six Ohio Supreme Court justices who ruled that FirstEnergy does not have to refund $43.4 million to customers have received campaign contributions from FirstEnergy.
The Ohio Supreme Court’s January 24, 2018 decision came more than four years after FirstEnergy appealed a 2013 order from the Public Utilities Commission of Ohio (PUCO) that required the utility to refund to customers millions of dollars it overpaid for Renewable Energy Credits (RECs) within 60 days.
The Ohio Consumers’ Counsel (OCC) and Environmental Law and Policy Center (ELPC) have already asked the court to reconsider its decision in the FirstEnergy case. Consumer and environmental advocates had challenged FirstEnergy’s “unreasonable” purchase of RECs from subsidiary FirstEnergy Solutions and other suppliers at higher prices than those paid by Ohio’s other utilities at the time.
In 2013, FirstEnergy also backed a bill to gut Ohio’s renewable energy and energy efficiency standards. Clean energy supporters warned FirstEnergy’s “imprudent” purchases of overpriced REC’s to comply with Ohio’s renewable energy requirements could be used to distort the cost of renewables in the eyes of the public and policymakers. A misleading 2017 study by the Buckeye Institute, which has received funding from the Koch network, attempted to do just that and called for the repeal of Ohio’s renewable energy standard.
The same five Ohio Supreme Court justices have also received campaign contributions from American Electric Power (AEP), which filed an amicus brief in the FirstEnergy case. AEP’s brief called on the justices to “recognize and reaffirm” the “prohibition against retroactive ratemaking” that also saved AEP from having to refund $368 million to customers in a separate case the Ohio Supreme Court decided back in 2014.
The issue of judges ruling on cases involving their campaign contributors is not new to Ohio. Take for example the findings of a 2006 investigation by the New York Times:
An examination of the Ohio Supreme Court by The New York Times found that its justices routinely sat on cases after receiving campaign contributions from the parties involved or from groups that filed supporting briefs.
The Ohio Supreme Court’s authority to review PUCO’s decisions makes campaign contributions from electric utilities to judicial campaigns all the more relevant.
“While the PUCO is reviewing the court’s decision, we are concerned that today’s ruling will have negative impacts on the agency’s ability to protect Ohio’s utility customers,” PUCO chairman Asim Haque said after the court’s ruling in the FirstEnergy case. “Our ability to effectively audit utility expenses is one of our most important regulatory responsibilities.”
Chief Justice Maureen O’Connor
FirstEnergy is #11 on the list of top donors to Chief Justice Maureen O’Connor’s campaigns, according to FollowTheMoney.org. O’Connor joined with five other justices in 2018 to reverse the 2013 PUCO order that required FirstEnergy to refund $43.4 million to customers.
O’Connor received $17,000 from FirstEnergy from 2002 to 2010, which was the last election where O’Connor faced a challenger. Ohio Supreme Court justices serve six-year terms, and O’Connor ran unchallenged during the 2016 election.
From 2002 to 2010, O’Connor received another $7,700 in campaign money from Anthony Alexander, then the CEO and president of FirstEnergy. Alexander’s career with FirstEnergy continued until 2015, and he was still at the helm when FirstEnergy filed its appeal with the Ohio Supreme Court in 2013. His spouse, Becky Alexander, also contributed $4,700 to O’Conner from 2002 to 2008.
O’Connor received $14,000 in campaign contributions from AEP from 2002 to 2010. She joined with the five justices who saved AEP from having to refund $368 million to customers in the Ohio Supreme Court’s 2014 decision.
Justice Sharon Kennedy
Justice Sharon Kennedy wrote the concurring opinion that sealed the deal for FirstEnergy’s successful appeal of PUCO’s 2013 refund order. FirstEnergy is #9 on Kennedy’s list of top donors. It contributed $13,000 to Kennedy in 2012 and 2014.
Kathleen M. Trafford, an attorney at Porter, Wright, Morris, and Arthur, contributed another $1,000 to Kennedy in July of 2014. Trafford was later listed as counsel for AEP in the October 2014 amicus brief AEP filed in FirstEnergy’s refund appeal case.
Kennedy was also among the five justices who decided in favor of AEP in the Ohio Supreme Court’s 2014 refund case. AEP contributed a total of $13,025 to Kennedy in 2013 and 2014. Kennedy also received a total of $3,150 from AEP employees, including $1,000 from CEO Nick Akins, in contributions dated from July of 2014, several months after the Ohio Supreme Court’s decision that saved AEP from having to refund hundreds of millions of dollars to customers.
Justice Terrence O’Donnell
Justice Terrence O’Donnell backed the court’s 2018 decision in the FirstEnergy case. FirstEnergy ranks #12 among O’Donnell’s top campaign contributors, and contributed $21,300 to O’Donnell’s campaigns from 2000 to 2012. O’Donnell also received $10,950 from FirstEnergy’s Anthony Alexander and another $7,250 from his spouse, Becky, within that same timeframe.
O’Donnell joined the 2014 Ohio Supreme Court decision that stopped a $368 million refund to AEP customers. AEP is #4 on O’Donnell’s top donors list, and contributed $24,825 to O’Donnell from 2000 to 2012.
O’Donnell’s tenure on the court will end in 2018.
Justice Pat Fischer
Justice Pat Fischer also joined the court’s 2018 decision in the FirstEnergy case. FirstEnergy ranks #7 on Fischer’s list of top donors. In 2016, FirstEnergy contributed $13,400 to help Fischer win election to the Ohio Supreme Court. Fischer also received $300 from Michael Dowling in 2016. Dowling is the senior vice president of external affairs for FirstEnergy, and is also responsible for the FirstEnergy’s political action committee.
AEP ranks #10 among Fischer’s top donors, with $11,700 in campaign contributions to Fischer’s campaign in 2015 and 2016. Fischer also received $600 from AEP employees in 2016, including $100 from David Feinberg, who “is responsible for all corporate legal affairs and supervision of AEP’s Legal Department.” Another $100 came from Julie Sloat, currently the president and CEO of AEP Ohio.
Justice Pat DeWine
Justice Pat DeWine too backed the court’s 2018 decision in the FirstEnergy case. FirstEnergy comes in at #8 Pat DeWine’s list of top donors, having contributed $6,700 to DeWine’s campaign in 2016. DeWine also received $300 from FirstEnergy’s Michael Dowling in 2016.
AEP ranks in at #8 as well – a spot shared by a number of DeWine’s top donors – and contributed $6,700 to DeWine’s campaign in 2016. Like Fischer, DeWine received $600 from AEP employees in 2016, including $100 each from David Feinberg and Jule Sloat.
What about Justice William O’Neill, who is now running for governor?
The Energy and Policy Institute did not find any past campaign contributions from FirstEnergy or AEP to Justice William O’Neill, who wrote the 2018 majority opinion in the FirstEnergy case. O’Neill won his seat on the Ohio Supreme Court in 2012, when he ran a low-budget, self-financed campaign and refused to accept campaign contributions.
O’Neill’s decision in the FirstEnergy case came just two days before he left the court to continue his run for governor. O’Neill waited until January to make it official, so his campaign won’t have to publicly disclose any contributions until the April 26, 2018 deadline for pre-primary reporting.
In the earlier 2014 case involving AEP, O’Neill concurred with a strongly worded dissent that said:
Allowing AEP to retain the $368 million that it collected based on charges that were not justified is unconscionable. Doing so because of a 50-year-old case that is not supported by the statute on which it is based is ridiculous. The ratepayers of Ohio deserve better.
But O’Neill sided with FirstEnergy on the refund issue in his 2018 majority opinion, which cited that same 50-year-old case, as well as the court’s 2014 decision in favor of AEP that O’Neill once opposed.
“We have recognized that application of the no-refund rule has been perceived as unfair and has even sometimes resulted in a windfall for a utility company,” O’Neill noted in his 2018 decision. “But we have also recognized that it is the statutory scheme that requires this result, and therefore, it is a matter for the General Assembly to remedy, not this court.”
The Ohio General Assembly is the target of FirstEnergy and AEP campaign cash too
A bill currently before the Ohio General Assembly – HB 247 – seeks to remedy the no refunds loophole that benefits Ohio’s regulated utilities at the expense of consumers. It has received broad public support during hearings before the Ohio House Public Utilities Committee. Only three opponents have testified against the bill and they are all regulated electric utilities: AEP, Dayton Power & Light, and Duke Energy. FirstEnergy has also engaged in some behind-the-scenes lobbying on the bill.
Of course, FirstEnergy has targeted the Ohio House and Senate with ample campaign contributions, and so has AEP. Much of Ohio’s system of checks and balances has become the target of campaign checks from the state’s regulated utilities.
A new crop of candidates will vie for two open seats on the Ohio Supreme Court in 2018. Will they accept campaign cash from electric utilities too?