How Corporate Cronyism Is Fueling Skyrocketing Electric Bills

Here’s how FirstEnergy, embroiled in an Ohio corruption scandal, wields enormous influence one state over.

by Kat Martinez, More Perfect Union

In the last few months, More Perfect Union has begun developing a video journalism series to focus on the price-gouging of utility companies.

These energy behemoths are supposed to be publicly-regulated monopolies that provide affordable energy in exchange for their dominant market share. This model works best when public servants in government have the courage to take on privately held companies when they demand excessive rate hikes or resist making infrastructure investments needed for the public good.

But across the country, many Americans are experiencing large rate hikes right now. Much of the blame can be placed on the utility companies’ choices.

The case of FirstEnergy

Our first exposé focuses on FirstEnergy, a utility company that provides power to much of the Appalachian region of Ohio and Pennsylvania, among other states. It is one of the largest investor-owned utility companies in the U.S.

But over the past few years, a massive bribery scandal has unfolded in Ohio which landed former Ohio House Speaker Larry Householder in federal prison and a top energy regulator and FirstEnergy executives with indictments. 

In 2019, Ohio’s Speaker of the House, Larry Householder, introduced and passed a bill that gave FirstEnergy $1.3 billion to bail out failing power plants. The bill also rolled back Ohio’s energy efficiency and renewable energy standards. FirstEnergy has since admitted to paying $60 million dollars in bribes to pass the bill, as well as paying off Ohio’s top utility regulator. 

But outrageously, the company’s illegal activity has resulted in consumers in Ohio and the surrounding states paying even higher utility rates. Our investigation took us to protests, public hearings, and the homes of people struggling to pay their energy bills. 

Are FirstEnergy customers paying for rate hikes to cover the costs of the scandal? 

That question became even more critical last year when FirstEnergy started asking for big rate increases: $207 million in West Virginia (an $18 per month increase for the average household), $185 million in New Jersey ($8.45 per household), and $40 million in Maryland ($9.50 per household). 

This led us to an agency that plays a key role in how much customers pay for energy: public utility commissions. In most states, this agency is responsible for overseeing the regulation of utility services like energy and water.

While attending a hearing by the West Virginia Public Service Commission, it became clear that people were also angry about something else: FirstEnergy is fighting renewable energy and using its resources to double down on coal. 

Across the U.S. over the past decade, coal has stopped being a cost-effective way of producing electricity and it’s become cheaper to generate power from gas, wind, and solar. To save money, most utilities made the switch, and so did many homeowners. 

But instead of West Virginia's Public Service Commission encouraging the company to move to more affordable forms of energy, they’ve done the opposite. Nearly all of the state’s energy is still generated from coal, encouraged by the state’s billionaire governor Jim Justice — a former coal boss himself — and his appointees to the PSC, which includes PSC Chair Charlotte Lane, a former FirstEnergy lobbyist. 

Check out the video for more on FirstEnergy’s far-reaching influence and its impact on consumers, and keep an eye out for more coverage of why your utility bills are so expensive now.