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Tuesday, August 11, 2020

City Council to Launch Investigation into HB6 and FirstEnergy's Actions in Cleveland

Posted By on Tue, Aug 11, 2020 at 2:04 PM

  • Cleveland City Council/Steve Miluch
Cleveland City Council will vote Wednesday to greenlight an independent investigation into Ohio's corrupt House Bill 6, which bailed out of two nuclear plants formerly controlled by FirstEnergy, and the actions of entities named in a sweeping federal racketeering complaint related to the City of Cleveland.

Council's Finance Committee, chaired by Council President Kevin Kelley, will lead the investigation. A resolution was amended in a council committee hearing Monday to specify that council could use its subpoena power.

"Council has reason to believe that Company A [FirstEnergy] has other long-term public policy goals specific to the City of Cleveland," the resolution read in part, "to restrict or destroy Cleveland Public Power and to influence or control the City’s legislative body as well as its executive branch."

To restrict or destroy Cleveland Public Power???

Good Lord, this could get juicy. Kelley said that he had every intention of getting underway poste-haste, but wasn't sure if the investigation would begin with calling witnesses or reviewing documents.

Either way, look for council to probe as invasively as legally permissible the actions of local businessman Tony George, who last year funded an effort to reduce the size and pay of Cleveland City Council. Many in Council believed that George's crusade was a vendetta after he didn't win an energy aggregation contract in 2017. (George identified himself as an agent for FirstEnergy at the time. He has denied that the council reduction campaign had anything to do with the energy contract, though he has been known to publicly threaten elected leaders in the past by vowing to fund opposition candidates or taking his businesses elsewhere.)

Council's resolution said that the tactics used in the conspiracy to pass HB 6 "were similar to those used by Company A and its allies against the City of Cleveland: applying political pressure using phony citizen groups and paying out significant dollars to fund its objectives." This is presumably a reference to the 2019 reduction effort.

The impact of HB6 on Cleveland residents is self-evident: Those who get their power from FirstEnergy would have been subject to a new monthly bailout fee, ($0.85, for most residential customers). But Cleveland Public Power was affected by HB6 as well because of renewable energy standards rollbacks. spoke to the city's Sustainability Chief, Jason Wood, who said that Cleveland had collected more than 600,000 "renewable energy credits that could be applied against energy efficiency requirements." The corrupt HB 6 rendered those credits worthless, according to Wood.

The forthcoming investigation will be the latest episode in a battle over public vs. private electric power that has been raging in Cleveland for more than a century. In 1903, progressive Cleveland Mayor Tom Johnson, who'd campaigned on the merits of publicly owned utilities, introduced an ordinance to authorize a bond issue which would finance the construction of a municipal power plant. The Cleveland Chamber of Commerce was vocally opposed to the plan and the Cleveland Electric Illuminating Company (CEI, later FirstEnergy) managed to persuade many of the city councilmembers at the time to vote against its passage. This persuasion likely took the form it takes to this day: generous campaign contributions. 

When Council proved too aligned with CEI and wouldn't pass the bond measure, Johnson took it to the people. The Ohio Attorney General, also likely doing the bidding of CEI, attempted to thwart the vote by arguing that the measure was unconstitutional, (an eerily similar foreshadowing of the strategy adopted by Kevin Kelley and others in the Q Deal). But Johnson prevailed, and in a 1904 special election, Cleveland voters approved the creation of Muny Light. 

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