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CHARLESTON -- The West Virginia Public Service Commission is set to approve an auditing firm that will begin looking at the lobbying expenses of two FirstEnergy subsidiaries following a bribery scandal in the Ohio statehouse involving the company and a former House speaker.
In a joint staff memorandum released Monday, attorneys for the PSC recommended Rhode Island-based Van Reen Accounting LLC to conduct a focused management audit of Monongahela Power Co. (MonPower) and Potomac Edison Co. Both companies are subsidiaries of FirstEnergy Corp., headquartered in Akron, Ohio.
The attorneys recommended that the PSC require MonPower and Potomac Edison to sign a proposed statement of work. They also called on the PSC to issue a prompt order allowing Van Reen to begin work in order to make a Dec. 31 deadline. Karen Macon, director of the PSC's Utilities Division, recommended Van Reen.
According to an initial staff memorandum from Macon, Van Reen submitted a response to a request for proposal from the PSC on May 15. The total cost is $122,000 with hourly rates no greater than $250 per hour for three employees of Van Reen.
"Staff recommends approval of Van Reen as the consultant," Macon wrote. "Staff requests the Commission require both Van Reen and the Companies to executive this Statement of Work and file it in this case."
The scope of work includes an analysis of lobbying and image building costs directly and indirectly charged to MonPower and Potomac Edison, including costs related to Ohio House Bill 6, from 2018 to 2022 and the costs directly and indirectly charged to the Expanded Net Energy Charge (ENEC) cost recovery accounts during the same time period. The PSC is also seeking a review specific to the companies in a previous Federal Energy Regulatory Commission audit.
The PSC ordered the focused management audit of MonPower and Potomac Edison in March after the two companies indicated they planned to file a base rate case in April. Part of the audit will be focused on whether FirstEnergy has tried to charge MonPower and Potomac Edison ratepayers for lobbying and promotion expenses as part of base rate increase requests.
According to the March order, the audit is due in part because of a scandal in Ohio that has played out over the last three years involving FirstEnergy.
Former Republican Ohio House Speaker Larry Householder and Matt Borges, the former chairman of the Ohio Republican Party, were found guilty at the beginning of March for their part in a bribery and racketeering scheme. According to the U.S. Department of Justice, Householder, 64, was sentenced in June to 20 years in prison. Borges, 50, was sentenced to five years in prison. Two other conspirators, political strategist Jeffrey Longstreth and lobbyist Juan Cespedes, previously pleaded guilty for participating in the conspiracy.
According to court documents, company A, identified as FirstEnergy, is accused of spending more than $60 million between 2018 and 2020. The money was funneled through Generation Now, a non-profit controlled by Householder and others. The funds were allegedly used to help Householder become House speaker. Later, funds from the nonprofit were used to bribe ballot initiative signature collectors to stop collecting signatures to reverse House Bill 6, a bill that charges Ohio ratepayers to keep the Davis-Besse and Perry nuclear plants operating.
In lieu of prosecution, FirstEnergy agreed to a settlement and $230 million penalty.