Inside Clean Energy: Ohio’s Bribery Scandal is Bad. The State’s Lack of an Energy Plan May Be Worse

The $61 million scheme snagged a politician, lobbyists and a dark money group. Meanwhile, nobody’s thinking about how to get to a clean energy future.

Jul 23, 2020
Ohio Speaker of the House Larry Householder. Credit: State of Ohio

Ohio Speaker of the House Larry Householder. Credit: State of Ohio

Inside Clean Energy

Last October, I went to the public library in my Columbus, Ohio, neighborhood and saw a woman standing outside the front entrance, asking people to sign a petition.

The signatures were for a proposed ballot measure to repeal an Ohio law, passed a few months earlier, that provided taxpayer-funded bailouts for nuclear and coal-fired power plants. The legislation also got rid of Ohio's requirements that utilities meet annual targets for renewable energy and energy efficiency.

Two people standing near the petition gatherer were "blockers," paid operatives there to discourage me and any other passers-by from signing it. They were handing out postcards from a dark money group saying that the campaign to repeal the law was part of a Chinese government plot to harm the United States.

As of Tuesday, the world knows that the campaign to pass the Ohio law and the attacks on the effort to repeal it were part of what prosecutors call the largest bribery scheme in Ohio history.

The $61 million scheme was bankrolled by the utility FirstEnergy, the Akron-based company that was the main beneficiary of the bailout legislation, and the money went to accounts controlled by Ohio House Speaker Larry Householder for his political and personal use, prosecutors said.

Householder, a Republican, and three lobbyists have been arrested and charged. Also charged was a dark money group, Generation Now.

I wrote extensively about the battle over the law before it was passed. With Tuesday's events, the shocking thing for me is not the brazen nature of the wrongdoing or its scale. It's that much of this scheme—most of it even—was legal and indicative of the way energy and utility policy is done in Ohio and other states.

Before I started at InsideClimate News in 2018, I covered Ohio energy and utilities for The Columbus Dispatch for about a decade. I have written about this subject for long enough that I have mostly lost my ability to be shocked by the ways that utilities, legislators and regulators often solve political and financial problems by dumping costs onto the public.

The 82-page charging document from the U.S. Attorney's Office in the Ohio case reads like a novel, using wiretap recordings and recovered emails and text messages to tell the story of a shameless and successful plan by an elected official to get a utility to finance his personal piggy bank in exchange for passing a bailout for that company.

Householder got $61 million. FirstEnergy got a bailout of more than $1 billion to subsidize money-losing nuclear plants, courtesy of Ohio ratepayers.

You can read the full document, and I encourage you to do so.

But here is some of what was done in public that I and other reporters thoroughly documented:

  • FirstEnergy was unable to get the Ohio General Assembly and the governor to sign a nuclear plant bailout in 2017 and early 2018. So the company spent heavily on Republican primary elections in 2018 for seats in the Ohio House to elect a group of lawmakers who would support Householder's bid to become speaker and support the bailout. At least nine Householder-backed candidates won in these races, and FirstEnergy's donations were substantial and publicly reported.

  • Even after helping to elect pro-Householder and pro-bailout legislators in 2018, Householder didn't have enough support in the House from Republicans to become speaker, so he approached Democrats for help. Democrats gave Householder the decisive votes to become speaker as part of an agreement in which Householder pledged not to bring forward legislation that would curb the power of labor unions, among other concessions.

  • When Householder unveiled the bailout measure, House Bill 6, he surprised some environmental advocates by revealing that the bill would include a cancelation of rules that say utilities must invest in renewable energy and energy efficiency. Despite getting rid of clean energy mandates, he and his colleagues described the legislation as a "clean air" measure because the main point of the bill was to subsidize nuclear power, which has almost no emissions.

  • Supporters of the bailout bill were struggling to get the votes they needed in the Ohio House, so they amended the bill to also include a bailout of two coal-fired power plants owned by Ohio Valley Electric Corp. With this change, the clean air bill supported some of the dirtiest power on the market.

  • The bill narrowly passed in the House and Senate and was signed by Gov. Mike DeWine last summer. Immediately, a group tied to owners of competing power plants said it was launching a petition campaign to let voters decide on the law. Supporters of the bailout responded by hiring "blockers" who impeded the work of petition gatherers and a media campaign that said, without evidence, that the repeal effort was part of a plot by the Chinese government to take over Ohio's electricity supply. In the face of this opposition, the repeal campaign failed to get enough signatures.

The charging document tells the story of what was happening behind the scenes of the public story, how FirstEnergy's publicly reported donations was just a small part of a much larger effort carried out through dark money groups, and how Householder controlled the dark money spending even though he claimed he had no responsibility for the groups' outlandish claims and actions.

Now we focus on what happens with the prosecution, and look for additional arrests, including potentially of other government or company officials.

But what risks being lost is that elected officials and a utility went through this whole process with seemingly little thought about what the energy future ought to look like, and how they can play a role in getting there.

They scrapped clean energy standards almost as an afterthought, and have yet to replace them with any sort of strategy for how Ohio's energy economy can avoid being left behind by states that have been much more aggressive in attracting jobs and projects related to solar, wind and battery storage.

The alleged shenanigans of Householder and company to win an election and pass a bill have consequences that will last a few years. But the lack of a plan for the future is much more damaging, the kind of thing that could sting for generations.

Apple Issues a Far-Reaching Plan for Carbon Neutrality by 2030

Apple issued a pledge on Tuesday that seems to raise the bar on corporate carbon goals.

The tech giant, which says it is already carbon neutral at corporate facilities, has committed to get to net-zero carbon throughout its chain of suppliers and in the use of its products by 2030.

Apple's plan is notable for the way it aims to do a lot on a relatively short timetable, said Lori Bird, director of U.S. energy for the World Resources Institute, a global research organization that focuses on sustainability.

"It's an ambitious target to try to do their entire supply chain in this period and it's very important to do so," she said.

Apple has pledged to reduce emissions by 75 percent by 2030, and plans to take care of the remaining 25 percent through carbon removal solutions. Credit: vpickering

Apple has pledged to reduce emissions by 75 percent by 2030, and plans to take care of the remaining 25 percent through carbon removal solutions. Credit: vpickering

She also took note of the plan's focus being mindful of racial and economic equity, something she can't recall seeing to this extent in other companies' plans.

Apple says it will reduce emissions by 75 percent by 2030, and will take care of the remaining 25 percent by "developing innovative carbon removal solutions."

One of my first questions is whether there will be carbon-removal methods available at that time to operate on the large scale needed to meet this goal.

The company is giving few details about carbon removal, devoting most of the carbon removal section of its new environmental progress report to a rundown of efforts to restore grasslands and forests, adding that the company "will continue to explore other ways to sequester carbon, as technologies become available."

While Apple is being light on specifics about carbon removal, the plan as a whole is one of the most detailed I've seen at such an early stage.

The public face of Apple's initiative is Lisa Jackson, who served as administrator of the U.S. Environmental Protection Agency in the Obama administration and now is Apple's vice president for environment, policy and social initiatives.

"We're not going to stop until every single one of our suppliers is on the journey with us," she said, interviewed Tuesday on Good Morning America.

The company says it will increase its use of low-carbon and recycled materials in its products. This includes the use of a robot Apple is calling "Dave" that disassembles a key component of the iPhone to recover rare earth magnets and tungsten.

Apple is making energy conservation a central part of its plan, which means finding ways to reduce the use of energy at its buildings and those of its suppliers.

The plan is so new that analysts haven't yet had time to take a close look. That said, Apple has a reputation for supporting clean energy and working with its suppliers to reduce emissions, and this looks like a significant step to accelerate those efforts.

A Challenge to Net Metering Has Failed. So What's Next?

Solar advocates across the country let out a collective, "Phew," last week after the Federal Energy Regulatory Commission voted unanimously to reject a petition that sought to undermine net metering, one of the most important tools for financing rooftop solar.

But this was not a total victory, and it sets up what may be the next fight.

Nathan Phelps, regulatory director for Vote Solar, told me he was "extremely worried" going into the decision because of the potential harm it could do.

"The optimal outcome would have been a rejection of the petition based on the merits," he said. Instead, what he and other advocates got was a rejection based on procedural issues, which leaves the door open to future challenges.

Net metering incentivizes rooftop solar by allowing solar owners to get paid by a utility for excess electricity they sell back to the grid. Credit: 10 10/Flickr

The case was brought by the New England Ratepayers Association, a group that doesn't disclose its membership or funding sources. In the complaint, the association argued that rooftop solar owners have unfair advantages over other consumers because they pay less to the utility than non-solar customers.

The association said the problem was net metering, in which the utility pays solar owners for excess electricity they sell back to the grid. These payments are a small, but important, part of how a solar owner is able to cover the costs of solar panels.

The group was asking FERC to rule that net metering should be subject to federal regulation instead of being regulated by states, a change that solar advocates felt was certain to reduce the ability of solar owners to save money with solar.

A cast of thousands rose up to ask FERC to turn down the petition, including state regulatory commissioners, elected officials from both major parties and environmental and solar business groups.

Meanwhile, the New England Ratepayers had just a few groups filing comments on its side, including the Heartland Institute, one of the leading purveyors of climate change denial.

The FERC, which has a 3-1 Republican majority, voted to reject the petition, saying that the New England Ratepayers Association "does not identify a specific controversy or harm that the Commission should address in a declaratory order to terminate a controversy or to remove uncertainty."

In two concurring opinions, Commissioners James Danly and Bernard McNamee, both Republicans, said they agreed with the decisions to reject the petition, but also thought there were some legitimate concerns about net metering that needed to be addressed.

After reading the decision and the concurring opinions, Phelps said he saw a clear message that FERC would seriously consider a challenge to net metering if the challenge could show that a person or business could demonstrate harm from the practice.

This is not a comforting thought, but it's better than what he would have been looking at if last week's decision had gone the other way.

Vote Solar and other clean energy advocacy groups are wary of federal regulation of rooftop solar because they think the result would probably be hostile to renewable energy. But they also agree that some states, especially those with high levels of rooftop solar, have good reason to look at different ways to compensate solar owners.

"The ultimate goal is fair compensation," Phelps said. "That will depend on the specifics of the state."

Did Xcel Energy 'Lowball' Its Forecast for Rooftop Solar in Minnesota?

A Minnesota regulatory case involving Xcel Energy has outsized implications for the country's transition to clean energy.

State regulators are considering whether to approve Xcel's plan for how it will manage its Upper Midwest power plants between now and 2034, a proposal that is a key part of the utility's larger goal of getting to net-zero emissions by 2050.

So I took note this week when the Institute for Local Self-Reliance, a Minneapolis advocacy group, issued a report saying that Xcel's plan was underestimating the growth of rooftop solar in a way that the utility is using to justify a larger reliance on natural gas power plants.

"Xcel is perceived as, and I think legitimately perceived as, a leader in low-carbon energy among investor owned utilities," said John Farrell, the institute's co-director. "So them getting this right sets an important standard for whether we should expect other utilities to similarly lowball distributed energy."

Xcel was the first large utility to issue a net-zero plan in December 2018, setting the pace for many of its peers that followed, including Duke Energy and Dominion Energy, among others. But Xcel and those other companies want to build new natural gas power plants during the transition, plans that are opposed by environmentalists and consumer advocates.

Xcel lists several scenarios for future energy needs, all of which it proposes to meet with a mix of energy sources that include a new natural gas plant.

Farrell says the need for a gas plant largely vanishes if Xcel increases its estimates for growth in rooftop solar and community solar. And, he thinks the company's estimates are obviously low, citing two other forecast models to suggest that Xcel's base case may be underestimating rooftop solar by about half.

Contacted for a response, Xcel spokesman Randy Fordice said the company's proposal for a natural gas plant is "the most economical way to ensure reliability" and also includes big increases in renewables.

"We can accomplish our bold plans through our balanced approach," he said, adding that Xcel is eager to work with interested parties and regulators on the plan.

The Minnesota Public Utilities Commission and other interested parties are reviewing Xcel's plan, with the commission likely to issue a ruling sometime next year.

The outcome in the Xcel plan will be a signal about what to expect from regulators and utilities in other states as they take a simple goal—net-zero by 2050—and try to turn it into a complex reality, and I'll let you know what happens.

Trump Administration Fails in Challenge of California-Quebec Cap-and-Trade Pact

A federal court judge in Sacramento has rejected the Trump administration's challenge of California's cap-and-trade agreement with Quebec, the latest of several attempts by the administration to undermine California's environmental policies.

The outcome was not a surprise because the Trump administration had a weak argument, said Chris Busch, research director for the think tank Energy Innovation, based in San Francisco.

I reached out to him to talk about the decision and also because the court case provides an opportunity to review what the California-Quebec agreement is and how it fits into strategies to reduce emissions.

"It's proven the concept can work and it is consistent with robust and even vibrant economic growth," Busch said. "Both places have achieved their 2020 targets in part due to the cap-and-trade program. From that perspective I think we can say they were a success."

Since 2014, Quebec and California have had a cap-and-trade agreement, which means that businesses in California and in the Canadian province must buy credits to offset their carbon emissions. The amount of available credits decline over time, which encourages the businesses to reduce their emissions, while the governments use the proceeds from selling credits to pay for environmental programs. Credit: Tony Webster/Flickr

The cap-and-trade agreement, in place since 2014, means that businesses in California and in the Canadian province must buy credits to offset their carbon emissions. The amount of available credits decline over time, which encourages the businesses to reduce their emissions, while the governments use the proceeds from selling credits to pay for environmental programs.

The Trump administration filed suit last October, arguing that California had overstepped its authority by entering into an agreement with a foreign government, which could harm the president's ability to negotiate deals with that government. The state responded that the cap-and-trade system was a business agreement, and that the Constitution allows states to form business agreements with sub-national governments in other countries.

U.S. District Court Judge William Shubb, an appointee of President George H.W. Bush, rejected the Trump administration's claims, saying the administration failed to show evidence that California's actions had diminished the president's power to bargain with other countries.

Last year, California spent more than $1 billion on projects that were paid for by proceeds from the program, and the running total since the program began is more than $5 billion. The money has gone to support programs that reduce emissions, increase resiliency to the effects of climate change, and train workers for jobs in industries tied to the clean energy economy.

But the cap-and-trade program has fallen short in one key measure: Its success has not been enough to attract new participants, Busch said. The Canadian province of Ontario was briefly a part of the program in 2018, only to pull out after a provincial election that changed the party in power.

In the United States, Oregon is considering joining the program.

For now, supporters of the California-Quebec carbon market can be content that their efforts are standing on firm legal ground. The Trump administration could appeal, but has not yet indicated whether it plans to do so.

Researchers Have Advice for Solar Developers on How to Minimize Damage to Nature

Last week, I wrote about the growing need for recycling solar panels. That's just one facet of maximizing the benefits and reducing the harm of solar development.

A new study in the journal Nature Sustainability shows how solar development is threatening cacti and other plants in the Mojave Desert, and the authors make recommendations about how developers can minimize the damage.

Mojave yucca does not grow back when panel sites are mowed, but other native shrubs that provide wildlife habitat do. Credit: Steven Grodsky/UC Davis

Mojave yucca does not grow back when panel sites are mowed, but other native shrubs that provide wildlife habitat do. Credit: Steven Grodsky/UC Davis

The researchers, from the University of California, Davis, compared plant cover on different parts of a 392-megawatt concentrating solar power facility in the desert. Concentrating solar power plants harness the heat from the sun to make electricity, in contrast to the more common solar photovoltaic systems, which turn sunlight into electricity.

The findings of the study apply to land used for both types of solar projects.

Researchers looked at parts of the project area that developers had mowed, parts that had been bulldozed and parts that were undisturbed, and compared them to areas that were undisturbed and had no solar development.

"People think that deserts are kind of a barren wasteland sometimes," said lead author Steve Grodsky, an assistant research ecologist with the John Muir Institute of the Environment at UC Davis. One of the points of the paper is that desert plants provide many ecological benefits.

He and his colleagues found that bulldozing desert land before installing solar panels destroys vulnerable species like cacti and Mojave yucca, while facilitating the growth of flammable invasive grasses.

When panel sites are mowed, rather than bulldozed, cacti and Mojave yucca do not grow back, but other native shrubs that provide wildlife habitat do.

"It's been the trend in the desert for facilities to be bulldozed," Grodsky said. "Mowing is rare."

The best option for plants and wildlife would be to focus development on marginalized sites like landfills and abandoned farmland, Grodsky said.

The Mojave yucca and other desert plants are also culturally significant. For Indigenous peoples living in the Mojave, solar installations on their lands promise economic development and energy security, but will likely damage meaningful plants in the process.

Grodsky hopes to draw attention to the different ways developers can prepare desert land for solar installations.

"We know that renewable energy is the future," he said. "This is our chance to basically promote renewable energy, build it out, but in a sustainable way that is compatible with climate change mitigation, and then retaining other natural resources."

Reporter Nicole Pollack contributed to this story.

Inside Clean Energy is ICN's weekly bulletin of news and analysis about the energy transition. Send news tips and questions to dan.gearino@insideclimatenews.org.

Facebook Twitter Google Plus Email LinkedIn RSS RSS Instagram YouTube