In a Victory for Customers and the Environment, Ohio Supreme Court Strikes Down FirstEnergy’s Multimillion Dollar Coal Bailout

The Ohio Supreme Court rejected FirstEnergy’s “credit support” charges approved by state regulators in 2016. Although billed as funds that could be used to modernize the utility’s grid, the regulatory order gave the utility a blank check of approximately $200 million annually for three years. The Supreme Court ordered the charge be removed, saying state regulators had failed to place the necessary conditions on how FirstEnergy spent the subsidies. 

“State regulators cannot write blank checks to the utilities they are supposed to regulate,” said Environmental Defense Fund senior attorney John Finnigan. “We immediately saw the $600 million subsidy for it what it was – an illegal bailout of FirstEnergy’s uneconomic coal and nuclear plants. Today the Ohio Supreme Court’s order voids this illegal bailout.”

The appeal process has taken three years and in this time, First Energy has collected nearly the full $600 million under the illegal order. Current law states that FirstEnergy gets to keep the $600 million rather than refund it to customers. EDF has been working hard to change the refund law and the ruling should give added impetus to this effort.  The ruling also sets a precedent that will block state regulators from approving such orders in the future, which is important because FirstEnergy has a pending application to extend the bailout for another two years at a total cost of $400 million. The Supreme Court ruling should also give pause to Ohio lawmakers who are hearing testimony on HB 6, which would create a new bailout program for FirstEnergy’s old coal and nuclear plants.

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