Ohio utility gets SEC subpoena regarding tainted energy bill

CLEVELAND — The electric utility AEP Ohio said Tuesday that the Enforcement Division of the U.S. Securities and Exchange Commission has subpoenaed documents related to subsidies it has received from a now-tainted energy bill for two aging coal plants partly owned by the company.

A document on the company’s website says the SEC is seeking various documents, including those regarding the energy bill passed in July 2019 and those “relating to our financial processes and controls.”

“As we have previously stated, we continue to have no reason to believe that AEP was involved in any wrongful conduct,” the company said, adding that it is cooperating with the SEC.

Federal authorities last July accused Akron-based First Energy Corp. of secretly funding a $60 million bribery scheme to win legislative passage of a $1 billion subsidy for two Ohio nuclear power plants operated at the time by a wholly-owned FirstEnergy subsidiary.

A subsidy for the coal plants, which AEP has a 43% ownership stake in, was later added to the energy bill.

Two other Ohio investor-owned electric utilities, AES Ohio, formerly Dayton Power & Light, and Duke Energy have smaller ownership shares of the plants, one of which is in Indiana.

The energy bill required nearly all electric customers in the state to subsidize the coal plants. Previously, only Ohio customers of the AEP, Duke and AES paid the subsidy, which amounted to $140 million last year.

The plants owned by a consortium called the Ohio Valley Electric Corporation were built in the 1950s to provide power to a uranium enrichment facility in Piketon, Ohio. Government contracts with OVEC ended in 2003 but the plants continue to operate, typically selling electricity to the regional grid at a price less than what it costs to produce.

Critics have pointed out that AEP initially opposed the nuclear bailout but later gave its support when the coal plant subsidy was added to the legislation.

A spokesperson for Charlotte, North Carolina-based Duke Energy said on Tuesday the company has not been subpoenaed by the SEC. A request for comment was left Tuesday with AES officials.

FirstEnergy officials have said the company is cooperating with investigations by the SEC, the U.S. Justice Department and the Federal Energy Regulatory Commission regarding its role in the bribery scandal. The company has been accused by federal prosecutors of secretly funding a $60 million scheme to win legislative passage of the energy bill.

The Legislature repealed the nuclear bailout portion of the bill earlier this year when the new owners of the plant, Energy Harbor, indicated it did not want subsidy worth $150 million a year.

In a recent answer to a shareholder lawsuit filed in Cuyahoga County Common Pleas Court, attorneys for FirstEnergy acknowledged the company paid large sums of money to a dark money group controlled by then-Ohio House Speaker Larry Householder.

Federal authorities have said the money was used to get supporters of Householder elected, to win passage of the energy bill, and to prevent a referendum organized by bailout opponents from getting on the ballot.

Householder and four other men were arrested and subsequently indicted on federal racketeering charges last July. Householder has pleaded not guilty.