Aired Jun 9, 2026 · 41 min

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Ohio’s House Bill 6 scandal has become one of the most consequential utility corruption cases in US history, and its fallout is still shaping politics, regulation, and public trust in the energy sector.

In this episode, host Kinsey Grant Baker speaks with investigative journalist Kathiann Kowalski about how a bill that was designed to support nuclear plants became the center of a $60 million bribery scheme, the conviction and 20-year sentence of former Ohio House Speaker Larry Householder, and the broader web of utility, lobbying, and regulatory influence that followed.

Kathiann Kowalski: You can think of this as a very complex bribery scheme to bail out non-competitive electricity generation and to guarantee electric companies profit.

Kinsey Grant Baker: Can you walk me through who some of the key players are?

Kathiann Kowalski: So the major utility player was FirstEnergy, and so you had Larry Householder, who is currently serving a 20-year term in federal prison.

Kinsey Grant Baker: What about the people of Ohio? How is this hit rate payers? How are they responding to it?

Kathiann Kowalski: Those coal subsidies cost Ohioans over $450 million.

Kinsey Grant Baker: Something like this at this scale could happen, could be orchestrated. I think is something we should interrogate a bit more.

Kathiann Kowalski: So we really do need vigilant oversight. Whatever you're doing with energy or anything in a democracy, we need clean government.

Kinsey Grant Baker: Bribery. Dark money. A billion dollar bailout hidden inside an energy bill and rate payers left holding the bag. No, it's not the plot for the next season of your favorite crime drama. It is a real-life story unfolding in the Midwest. I'm Kinsey Grant Baker. This is Power Perspectives, and we're about to unravel the anatomy of an energy scandal. Ohio's House Bill 6 is the largest public corruption case in the state's history. And it exposed how deeply corruption can embed itself inside an industry that many people never think twice about, but most really, really should.

And most importantly of all, it's still unfolding. Today on Power Perspectives, we are pulling back the curtain on one of the most consequential stories in modern energy history, the Ohio HB6 scandal. Joining us is Kathiann Kowalski, a journalist with Canary Media who has covered this story with depth and tenacity throughout a lot of twists and turns over a half decade plus. So we'll talk about how it happened, who was behind it, what it means for the future of the utility, industry, and how it's regulated across the country. We've got a lot to unpack.

Kathiann, welcome to Power Perspectives. How are you today?

Kathiann Kowalski: I'm good. Glad to be here.

Kinsey Grant Baker: Thank you so much for joining us. As I mentioned, you have covered this story a long time and have really been pulling on these threads, understanding how it works, understanding what the stakes are. And I think that this is an important story for us to talk about here on the show, because my thinking is, if it can happen in Ohio, the question a lot of utility leaders should probably be asking themselves is whether it can happen anywhere else. Where they are operating, where their territory is. So we're going to dig into a lot today. And I want to start with the basics.

Can you start here by telling me maybe just a little bit more at the highest possible level? Because again, I know this one has a lot of tentacles. What is this all about? What is Ohio's House Bill 6 utility corruption scandal? If you had to put it into a handful of sentences.

Kathiann Kowalski: So you can think of this as a very complex bribery scheme to bail out non-competitive electricity generation and to guarantee electric companies profit. Take that apart just a tiny bit. What distinguishes this is that dark money groups that is entities that don't have to say where their money is coming from were used as flow through vehicles for the funds in order to be moving from utility companies and some other people to political campaigns and actions involved in trying to get this past. It was essentially in terms of Ohio State House a bid on the one hand apparently by someone who wanted to not only get reelected but become Speaker of the House and then even later extend that for a longer period of time and power in return for this bailout legislation.

And there was also a parallel plot that was revealed in the course of all of this for the utility to get favorable treatment from the regulatory agency that is supposed to be the watchdog. Because when you mention that this is something that yes, there are utilities all across the country. There are also utility customers all across the country. In some states we have a choice about where we buy our electricity generation. But in every state we do not have a choice of which electric company delivers the power to our homes.

Kinsey Grant Baker: Can you walk me through who some of the key players are? Who is the utility in question here? Who are some of the lawmakers in question here? Maybe some of the names to know from utilities from execs. Who's the who here?

Kathiann Kowalski: So the major utility player was FirstEnergy and they have utilities in multiple states and it was the corporate parent FirstEnergy but they also have a bunch of subsidiaries. So there would be groups like FirstEnergy Solutions which was their generation arm. There would be groups like their service company which handled their money matters and so forth. There were also some other energy companies that gave smaller amounts of money. They were never charged criminally. But some of their funding also wound up going towards the effort. And there was money from a group called Empowering Ohio's Economy which wound up being linked to American Electric Power.

There was also another group that was linked to what was then known as Murray Energy. So it was it FirstEnergy was the big player but there were others as well. On the other side of the equation at FirstEnergy at one point in the proceedings there was a federal judge demanded of the lawyers who paid the bribes. And the answer that came from FirstEnergy's lawyers pointed to two former executives Chuck Jones and Michael Dowling. Now on the other side of the scale we had people involved taking the money, getting money. And so you had Larry Householder who is currently serving a 20 year term in federal prison.

You had Matt Borges, a lobbyist and former head of the Ohio Republican Party who is finishing up a five year term. You also had one Juan Cespedes who was a lobbyist who took a plea deal. You had Jeff Longstreath who was running a dark money group called Generation Now. And he took a plea deal. And you also had Neil Clark, a lobbyist who died in I believe it was 2021. Might have been 2022. But you also had Neil Clark, a lobbyist who died. Additionally, when you got to the regulatory side of things, you had Sam Randazzo who had been a longtime power player in Ohio's electric utility scheme representing large industrial companies.

And power player was not just a pun there that he was known as the Randazzler. And he eventually became head of the Public Utilities Commission. And there were about $4 million plus 4.3 that went from FirstEnergy to Randazzo weeks before he became head of the Public Utilities Commission. So those were the major players. Generation Now is important because that was kind of the central dark money group that Householder used. When I say a dark money group, often we're talking about that in a political context. And under a 2010 Supreme Court decision, those are entities that can do unlimited spending on issues or for or against candidates.

But they are not supposed to be affiliated with a candidate's campaign. They're supposed to be independent spending. In this case, there was evidence that was pretty clear that Householder was calling the shots with Generation Now.

Kinsey Grant Baker: So with all of these these many players and also Householder as the speaker of the house is just a great name. Like it feels like that was written by an author.

Kathiann Kowalski: It's a terrific name. Really hold on to that.

Kinsey Grant Baker: Yeah, I think all of these these names, lots of moving parts, lots of different entities, lots to keep track of. The simple idea here is FirstEnergy, siphoned money in some capacity to lawmakers who in favor kept non-competitive generation sources up and running, gave them in turn favorable regulation. Is that kind of the most sort of dumbed down version of what happened?

Kathiann Kowalski: That's the most simple version.

Kinsey Grant Baker: So let's talk about these non-competitive generation sources. What were they? Are they still running today? What is the energy at the kind of core of this utility scandal?

Kathiann Kowalski: So you have to go back actually a little bit in time. FirstEnergy and other utilities start at FirstEnergy and AEP and eventually other utilities started trying to get bailouts for power plants around 2013, 2014. And the reason was they were having trouble competing. Their 1990 law said we're moving to it an open market for generation and the utilities were not used to that. So they were trying to get bailouts. There were regulatory decisions that wound up in early 2017 starting a bill charge that was eventually ruled unlawful. But still raked in about $450 million.

The company did not have to give back. For FirstEnergy, there were there two nuclear plants in Ohio. The Davis-Besse plant out west of Cleveland and the Perry nuclear plant about an hour east of Cleveland. In addition, there were several coal plants that FirstEnergy had and the other utilities had coal plants. They had wanted bailouts for and there were also two 1950s era coal plants, one of which is actually crossed the river in Indiana but lawmakers didn't much care about that, that they wanted subsidies for. There were rulings that eventually, you know, the Public Utilities Commission was willing to allow subsidies and then there were proceedings at the Federal Energy Regulatory Commission.

They said, wait a minute, we're going to take a hard look at this to make sure it's not a sweetheart deal because, you know, FERC is charged with having a competitive market. And at that point, the utilities kind of backtracked and then in the summer of 2016, there were all these bizarre goings-on at the Public Utilities Commission, where FirstEnergy's request kept getting higher and higher at one point. It was like a really out of the ballpark. And finally, the PUCO ruled, in October 2016, we're going to give you this unlawful charge that I mentioned.

Well, then in 2017, you have another session of the legislature. FirstEnergy goes in and they have a nuclear ZEN bill, ZEN standing for zero emission nuclear, which basically would have subsidized the two nuclear plants. And it was not popular. People did not like it. People kept pointing at it. It was a bailout and it was pretty clear it wasn't going to pass. In addition, you had a bill for legacy generation that was supposed to be deemed essential to national security. And this is because way back in the 50s or so, they had been built in order to supply energy for the United States nuclear capabilities.

Because you need a lot of electricity to power those operations. And so that bill for the two plants called the OVEC plants stands for Ohio Valley Electric Corporation, was introduced and that was not at all popular either. And OVEC, by the way, is owned by the four Ohio utilities. FirstEnergy got kind of a dispensation from its bankruptcy proceedings, but then had agreed in the course of that. Okay, we'll pay some of it in order to settle a bankruptcy. And some other utilities out of state. But these are these are old plants, right? And in the meantime, you had starting around 2010 and then allowed by law in Ohio starting in 2012, the fracking expansion.

And so you suddenly have a lot of relatively cheap natural gas coming on the market. And that is competing with coal. That's why coal isn't competitive. And starting around 2013, 2014, you started to have prices for solar and wind coming down as well. And so that was all going on. There also had been efforts in 2013, 14, 15 and 16, 17 and 18 to try to get rid of Ohio's clean energy standards. That included a renewable energy standard where utilities were supposed to get increasing amounts of their generation from solar or wind. And there was an energy efficiency standard that would have required utilities to get larger and larger portions of energy savings through enabling efficiency or basically helping consumers not waste power.

And they actually did pass a law to get rid of first to freeze those standards in 2014. So they didn't increase it all in 2015 and 2016. They then resumed in 2017 in a weakened state. And lawmakers did pass a bill to get rid of them or basically gut them. In other words, there would be no further requirements. Then Governor John Kasich vetoed that bill. So you now start in 2019 and all of this stuff gets poured into House Bill 6, which is introduced at the end of March. Finally, passed in mid-July signed by Governor Mike DeWine on very within hours the very same day, it is passed and proof it's now the law.

So it's like this whole effort of giveaways that companies couldn't get beforehand, all of a sudden in this bill. And FirstEnergy was not they were much more interested at the time in the nuclear plants, but they, you know, they were willing to go along with the coal subsidies because that meant that they wouldn't face opposition from the other large utilities of the state. I should also mention in April 2018, FirstEnergy filed for bankruptcy for its generation arm. So that's now separate. So, you know, they wanted to make that deal go through and get that bankruptcy resolved.

Kinsey Grant Baker: Yeah, it seems like the stakes were pretty obviously very high for them and having the context of how all of this wraps into one moment that, you know, has come to define this story, this scandal, I think, is really interesting. And to me brings up a really important question, which is what the impact has been on customers in Ohio. We're talking about a lot of utilities that have different interests and different, you know, players and stakes in the game here. We're talking about lawmakers who equally have their own interests and their own stakes.

What about the people? What about the people of Ohio? How is this hit rate payers? How are they responding to it?

Kathiann Kowalski: Well, everybody's electricity costs are way up now, right? But even before that, had the nuclear subsidies in House Bill 6 take an effect, customers would have paid $1.1 billion over six years, which is a lot of money. As it was, those did not take effect in part because of a short stay in legislation. And then in 2021, after all of this came out, those subsidies were eventually revoked by the legislature, along with another part of House Bill 6 that basically let utilities guarantee their profits peg to 2018, which was a very high year for electric revenues.

But as it was, the coal subsidies that were thrown in there to appease the other utilities, those did take effect. There were multiple bills to try to revoke them. There were bills to try to revoke the whole deal, as early as July 2020, when the, when Householder and others were arrested. But those coal subsidies cost Ohioans over $450 million. And then that unlawful rider charge that ended in 2019, but between 2017 and mid to late 2019, ratepayers paid $450 million or so for that. And those were refundable. That money might well have paid for part of the House Bill 6 bribes.

In addition, when you talk about effects on ratepayers, because you had coal plants operating longer than they might have, you had excess pollution, environmental groups pointed to large amounts of extra greenhouse gases, extra particulates, extra nitrogen oxides that have gone out into the air. And those all have their own problems and costs.

Kinsey Grant Baker: Yeah, I mean, and long tails too, you know, things that will impact consumers in 2020, when, when a lot of this was coming to light, they don't just end there. They, they continue to impact the way that utilities are run, the way that bills are sent. All of this is, is really interesting. And, you know, it compounds. I think there's also a question here of what, you know, the, the consensus is around, maybe restitution, accountability, what that looks like. I, I understand regulators have ultimately ordered roughly $250 million in penalties. More than $186 million has been refunded or credited to consumers.

A lot of consumer advocates have argued that that is not enough. I'm curious what you think on, on that idea of trying to repay customers to, to make them whole, knowing that the implications of this scandal have been significant. And the impacts have been significant on average every day, you know, ratepayers. How does that kind of, you know, add up to you?

Kathiann Kowalski: There have been bills in the legislature for close to a decade now, to try to get lawmakers to say, hey, if it charges unlawful, refund it. The Ohio Supreme Court has interpreted a couple of older cases to say you can't have refunds of rates paid to an electric company. And they have read that to say no riders, correct? So ideally, you know, it would be great to say yes, if something's unlawful, you have to refund it. And the provision that may also help would be to see something that says, hey, you don't get to collect something until the court rules, whether it's lawful or not, right?

Because that's how a lot of these charges get collected, right? They wouldn't need to be refunded if they had already had their lawfulness litigated here. In terms of the amount that FirstEnergy utilities paid, that's a judgment called by the lawyers for the different parties. And so, you know, it was probably about half, less than half of what some of the briefs in those regulatory cases had been seeking. But again, it's a judgment call any attorney makes when they resolve a case, there was a stipulated resolution and so I personally can't, can't challenge that.

Kinsey Grant Baker: Yeah, fair enough. I think there's also a larger question here about maybe what this story, this scandal says about the industry's lobbying culture as a whole that something like this at this scale could happen could be orchestrated, I think is something we should interrogate a bit more.

Kathiann Kowalski: Oh yeah.

Kinsey Grant Baker: What do you think that this story means for, you know, how utilities should maybe audit, revisit, rethink, be a little more thoughtful about maybe some of the relationships that they have with government affairs kind of operations or orgs?

Kathiann Kowalski: I think we need a lot more transparency. Then again, I'm a reporter. I always want more transparency. You know, part of me when there was the settlement announced of the fourth regulatory case was, gee, there won't be a hearing and more witnesses on the stand, right? I think there should always be transparency in government and that's just my personal view. But a lot of what happens goes on behind the scenes and often behind claims of confidential documents and so forth. One of the things that we saw last summer when these regulatory cases were being heard was that there hadn't been changes in auditors, right?

And so if the same person is reviewing what the company gives them and only what the company gives them, that has raised questions, at least with some critics. I think, you know, one of the things that makes this more difficult is that this is complex, right? And so utilities go in there with an advantage of understanding a lot of the nitty gritty details that most lay people don't and that most lawmakers don't and even regulatory agencies often defer to utilities. So to make that simple, there's an old joke about, you know, showing a child a dime at a nickel and saying, which one do you want and trying to get the kid to take the nickel because it looks bigger?

Right? Well, in utilities, you wind up with a lot of jargon and people really, really throw around the jargon as much as possible to camouflage what things really are. So, for example, these coal subsidies I talked about were not called coal subsidies. It was like the legacy generation rider. Right? It sounds so nice and so benign. Like, you don't call it something different. And even when there was a state trial going on earlier this year that ended in a hung jury for two former FirstEnergy executives, there was confusion going on between what FirstEnergy stood to gain for this, you know, guaranteed profits provision in House Bill 6 versus riders or extra charges they could get as a result of the energy efficiency standards that were gutted.

And the issue there was, there are two different things, right? But because they sounded so weird, it was easy, you know, it was easy to confuse people. And I think, I think utilities take advantage of that. I think any company will try to take advantage of that, but what distinguishes utilities again is we don't have the choice of who's delivering our electric power. So, we really do need vigilant oversight.

Kinsey Grant Baker: Yeah, it's it's a perfect segue too to talk about what that oversight looks like and how it might change in the post HB6 world. You make such an important point that utilities are notoriously complicated. Their business models all kind of look a little different from what the average everyday person might expect. The ways that they're regulated can differ from state to state from utility to utility. How does any of that change? I'm curious because of what happened in Ohio, if at all, how does the job of the regulator shift the responsibility of the regulator shift knowing that something like this happened and knowing that the impact on customers on every day people in Ohio is still ongoing and likely will be for some time to come.

Do regulators have any shifting responsibility because of that?

Kathiann Kowalski: I don't know if I would call it a shift in responsibility. I would say that it was interesting to watch the hearing last November when the regulators announced the penalties they were assessing in the regulatory cases and they made it clear that these were not slaps on the wrist. I think that was a good thing that you know penalties should never be a slap on the wrist and I would hope that that would carry over to other instances where you have violations of state law or state rules. I came out of prior to returning to reporting, I had practiced environmental law for 15 years and one of the things that was very, very important and that could result in very substantial penalties were false reports on what your emissions or your discharges were.

And the whole issue there was that it was about the integrity of the system. I would like to see that continue forward in other cases at the Public Utilities Commission. One of the comments somebody made to me after the U.S. Supreme Court decided not to hear Householder and Borges was that if you're going to have clean energy, you need clean government, I would take that even broader. Whatever you're doing with energy or anything, I think in a democracy we need clean government. And I don't need to sound like a Pollyanna, but I really feel it that way.

Kinsey Grant Baker: Yeah, I mean, I think it's an apt way to kind of sum up the potential learnings that might come out of this, that cleanliness is a good thing, regardless of what entity we're talking about, whether we're talking about the lawmakers, the regulators, the execs at utilities, the middle managers at utilities, there have been, I think throughout this story, a lot of moments where you realized just how many people had to also it, because I'm not the reporter working on this, made the wrong call, right? Made the call that didn't help people, made the call that was purely in self-interest, knowing that there have been a lot of those junctures throughout this story, I think, is something that should give us all pause that we should all stop and think about.

And I think there's also a question here of what this might mean for the broader utility industry. Curious what you think maybe some of the lessons might be for utility leaders, obviously beyond don't do corruption, if you don't want to go to prison, what might you kind of characterize as some of the learnings here for the broader industry beyond just Ohio?

Kathiann Kowalski: I think one of the things that's important is make sure that your ethics officers actually are being ethical. FirstEnergy has made a big deal in their public statements of saying that they have reformed their corporate culture. They have done a lot since the scandal came to light and since the discovery showed more people were involved, more people knew things, things that led up to FirstEnergy's admission of responsibility in 2021. So I think it, good corporate governance matters. It matters in for-profit groups. It protects both their customers and their shareholders and it protects the public more generally.

And that goes not just for utilities but for any company. So I think the lesson for utilities is make sure that you step up your ethics work. Make sure that your disclosures are full. I would love to see regulators provide more information to the public. Sooner one of the things that was frustrating was that in the regulatory cases a lot of documents were marked confidential and they were automatically treated as confidential and if I wanted documents from another agency that was involved in the litigation, they had to go back to FirstEnergy. So we've received a request for these documents.

So there was a delay in getting information and there should not be a delay. I should also mention that the House Bill 6 case stands out because it was one where the federal government was able to get involved in real time. And that does not often happen. It just so, you know, in this case, it just so happened that federal agents were already doing investigation into the lobbyist Neil Clark and Neil made comments about Householder and what was going on. So they were getting very interested in it. My former state representative who was against House Bill 6 and voted against it felt very uncomfortable by the amount of pressure he was getting from Householder basically threatening to cut off access to having his bills heard and a whole bunch of other stuff.

And he reached out to federal agents and talked with them. And then somebody who was working on the referendum effort, which would have tried to get this on the ballot. So voters could have said, no, we don't want this law. That person also felt very uncomfortable and went in contact in federal agents. So, you know, we were fortunate here that people were speaking up. And I guess the other lesson I would hope people would take away is, you know, not to be tried, but if you see something say something and whistleblowers matter, whistleblowers can make a big, big difference.

Kinsey Grant Baker: Yeah. And I think the idea of if you see something say something, you know, we all, to your one of the earliest points you made in this conversation, we all interface with power providers with utilities in some way, shape or form for some people in some states that looks different than it might for those and others. But it is the, you know, responsibility of those of us who have the ability to say something to do so. And this is just, you know, it's a huge story. It is one that has been unfolding for us. You have pointed out basically a decade or more.

And I'm curious just as we finish here, what comes next? You know, we're recording this on April 29th. It'll be out in a couple of weeks. What is the sort of next phase of this? What are you looking for? Well, looking forward is maybe a strange way to put it. But what are you anticipating? What kind of coverage are you expecting to put out there? Knowing that things are not totally wrapped up with a vote quite yet. What comes next year?

Kathiann Kowalski: As far as lawsuits go, there will be a retrial of the two former executives, Jones and Dowling in state court currently scheduled for the fall. A trial still needs to be set in federal court for federal charges against Jones and Dowling. So that trial date has not yet been set. I'm going to be watching those cases closely. There's also a trial coming up for Mr. Householder on state charges. That's been postponed, but eventually that will come up more broadly. One of the things that House Bill 6 did was in addition to all the financial impacts, it delayed more solar and wind coming onto the grid in Ohio.

And that was then amplified by a 2021 law that added extra hurdles for getting those types of generation cited. So for example, counties can just say we don't want any of this in our county for new generation. And even for projects that should not be subject to that provision, regulators at the Ohio Power Siting Board have kind of decided that if local townships, abutting a project or a part of the project don't like it and they're referring to the township trustees, then they will deem it not in the public interest. Well, that doesn't hold true for a natural gas plant or coal or nuclear or any natural gas drilling or pipelines or anything like that.

So one of the things I will be watching is to see whether there's any headway in trying to deal with that. And I will also be watching whether anything is done to at a minimum restore some sort of energy efficiency provisions for utilities to provide programs to customers. There are some things people can do in the market, but the utility programs generally have been shown to be more efficient. As we're looking at crazy high electricity prices, consumers probably would want to have those benefits. There have been bills passed and one house of the legislature over the last one or two legislative sessions, but they failed when they got to the other house.

So maybe there will be some progress on that.

Kinsey Grant Baker: Yeah, one of the many, many long-term implications and consequences of a corruption case like this one and one that I am eager to continue reading your coverage on. Kathiann, this has been so wonderful to really dig into this to wrap my arms around it. To the best of my ability, your coverage has been impeccable, very detailed. It's very clear that you have been following this so closely. So I appreciate you coming to power perspectives today to share a little bit more about how we got here and importantly, what we can learn from it. Thank you so much for joining me.

Kathiann Kowalski: You're welcome. Glad to be here.

Kinsey Grant Baker: Thank you. Thank you once again to all of our listeners for tuning into this episode of Power Perspectives. We will link some of Kathiann's work covering this story in the description of the episode. Keep an eye out too on the Energy Central Daily newsletter where we are trying to compile these headlines as they come out. As Kathiann mentioned, there's a lot still to look forward to in this story. Lots of trials, lots of implications and lots of coverage to be read. So keep an eye out there. Thank you again for listening. I'm Kinsey Grant Baker and I will see you next time.

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