That bribery fee in your electric bill

How political corruption shows up where you least expect it

John’s Journal

I write this like I’m talking to my friends at a bar. There are typos and occasional embellishments, but no lies. If you’re a lawyer, do not take this seriously… unless that helps.

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When you sit down to pay your power bill, you don’t expect to be shelling out money for political corruption. Yet that might be the case if you’re a customer of First Energy or one of its subsidiaries. 

I learned as much when I visited an elderly couple at their home in southern West Virginia. 

Al and Mary Arnette live on a fixed income and are worried sick about paying ever-increasing electric bills. They’re not alone. West Virginia, despite being an energy-rich state, has seen its residential energy bills increase 90% over the last 15 years. That’s the largest increase of any state in the country except one. 

Al could only take so many increases before he had to do something. He wrote a letter to the West Virginia Public Service Commission with the hope that some public official would get to the bottom of it. 

I learned about Al’s letter through the tenacious reporting of Sam Black, a journalist with whom I enjoy working at More Perfect Union. He’s the kind of person you don’t want digging into your business if you’re up to no good. 

Sam’s investigation into the skyrocketing bills that were making West Virginia’s cute old people sweat led back to one notorious corporation: First Energy. 

First Energy is one of the private corporations we entrust with a monopoly to supply electricity to the public in this part of the country. Most of us have a company like First Energy in our lives because, for some reason, we let greedy private businesses handle matters of public interest all the time. 

In exchange for every customer in a market, First Energy and other private utilities are regulated by our government… in theory. This means that they’re supposed to ask the government nicely before they raise everyone’s rates, for example. 

A few years back, First Energy had some financial woes. Their nuclear plants were losing money, and their aging, dirty coal plants weren’t the cash cows they had been in the good ol’ days, thanks to competition from methane and renewables. But rather than change with the times, First Energy hatched a plan to get out of a bind the old-fashioned way – straight-up political corruption. 

The plan was simple: bail out these failing nuclear assets and aging coal plants by sticking over a billion dollars worth of additional charges onto the bills of their customers. Regulatory approval for such a scheme was a non-starter even for the bottom-feeders of Ohio energy regulatory politics. So First Energy opted for another workaround in the form of an exciting new law, House Bill 6. HB6, when passed, would greenlight the bailout scheme *and* kill renewable energy incentives that were fueling the competition. 

First Energy just needed the votes to pass it, but there weren’t quite enough. 

So they set aside 60 million dollars to buy the votes. The money was put in the control of Larry Householder, an Ohio politician who deployed it in the 2018 cycle to elect loyalists across the state to serve in the Ohio House of Representatives, who then helped elect him as Speaker of that same body. In 2019, Householder’s House passed HB6. It was signed by Governor Mike DeWine the same day. 

And they would have gotten away with it if it weren’t for those damned federal agents. The Feds rained on the parade in 2020. Householder and four others were charged with racketeering for the scheme. Householder is currently serving a 20-year prison term. The former chair of the Ohio GOP got 5. Two others are cooperating with investigators and awaiting their sentence. The last of the men charged, well-known Ohio lobbyist Neil Clark, committed suicide while wearing a t-shirt that said “DeWine for Governor.” Take a second and ponder that not-so-subtle message. 

The US Attorney described the fiasco as "likely the largest bribery, money laundering scheme ever perpetrated against the people of the state of Ohio." 

When I moved to West Virginia from Ohio last year, I thought I had left this garbage back across the river. Turns out, maybe I didn’t. 

In 2021, First Energy was fined $230 million for its role in the scandal. Shortly after, First Energy subsidiaries started asking regulators in several states for major rate hikes: $207 million in West Virginia, $185 million in New Jersey, and $40 million in Maryland. All of it begged the question: were rate-payers in these other states paying for the political corruption that First Energy committed in Ohio? 

An Ohio prosecutor thinks so. 

And so do Al and Mary Arnette. In January, I sat on their couch listening to their plan to deal with the direct consequences of political corruption. A growing share of their fixed retirement income was being demanded by Mon Power, their First Energy-owned electric provider, in the form of rate hikes. They did about the only thing any of us could do. They wrote a letter to government regulators on the West Virginia Public Service Commission begging them not to approve the requested rate hike. 

If the world worked like the movie “Mr. Smith Goes To Washington,” that’s all we would have to do. Regulators would take in appeals from the public and boldly defend their interests against corporate greed. 

In our current world, the public interest might as well crawl into an artificially subsidized coal-fired power plant and die. And that’s essentially what happens on the regular. 

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In West Virginia, like other industrial states, the coal industry and the government are two different terms that describe the same thing. 

The state’s governor, Jim Justice, made his fortune in coal. He appointed all three current members of the Public Service Commission—the body that received Al Arnett’s letter and decides on these rate hike cases. One member of the Commission served as president of the West Virginia Coal Association for nearly 30 years. The president of the Public Service Commission was formerly a lobbyist for… you guessed it… First Energy. 

These are the people tasked with representing the public interest against the coal industry: A coal baron, appointing people who spent their careers working for the coal industry, to make rules about the coal industry. 

They’ve done the job exactly as you would expect them to. At the same time that First Energy was pulling off the bribery scheme in Ohio, these guys were running another one across the river. 

The Pleasants Power Station was another failing West Virginia coal-fired power plant. As in Ohio, First Energy hatched a scheme to make their customers pay for their business failure. The plan was scoffed at by Federal regulators, but supported by the West Virginia Public Service Commission, and ultimately ended up hidden in a last-minute bailout deal, pushed by Governor Jim Justice, that stuck West Virginia taxpayers with a 12 million dollar bill. 

Those 12 million dollars are just a fraction of the price we pay when the foxes guard the hen house. On the other side of the coin, the fines First Energy pays for its corruption are just a fraction of the cost of doing business. But as we’ve already seen, it’s not only West Virginians who are forced to pick up the tab. This is the corporate playbook that affects all of us as Americans. 

Just think of the scandals we accept as being normal. PFOA, Dupont’s class of cancer-causing chemicals, is in the blood of nearly everyone on earth, yet no one from Dupont is in jail, and its spin-off companies are wildly profitable. Sit with that for a minute. 

Boeing’s planes are falling apart after they replaced engineers with finance bros, and the most we get from the New York Times is this headline: “Boeing Faces Tricky Balance Between Safety and Financial Performance.” Oh, and pay no attention to that dead whistle-blower. 

The Sackler family made a product they knew was addictive and deadly and sold it anyway, claiming nearly 10 times as many lives as the Vietnam War. They made billions, and it goes without saying, are not in jail. 

The financial crisis threw gas on the fire already consuming the middle class, and gave the big boys an insurance policy dubbed “too big to fail.” Suspiciously, 50 trillion dollars once held by the bottom 90% is now held by the top 1%. Makes you wonder.

An employee of the notorious Koch Enterprises brought up concerns about corroding pipelines that may lead to further injury or death after similar negligence claimed the life of another employee Danielle Smalley. They were told that it was “cheaper to pay off damages from a lawsuit than make repairs.”

In every case, it’s a similar story to the rate hikes being forced on West Virginians. 

By the time I’m done writing any one of these pieces for the newsletter, I always come to the same conclusion. We’re run by brazen selfish corporations and it will stay that way until enough of us decide that we want to change it. How are we gonna do that? I guess that’s what I’m trying to figure out with all of you.

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