Judge certifies ratepayer class action suit against FirstEnergy

3 minute read

The Davis-Beese nuclear power station is seen near Oak Harbor, Ohio. REUTERS/Aaron Josefczyk

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  • Class includes Ohio residents who paid monthly electricity surcharge to support failing nuclear plants
  • Defendants in civil RICO case did not oppose motion to certify class

NEW YORK (Reuters) - Ohio ratepayers who claim they were wrongly charged on their electricity bills to bail out failing nuclear power plants in the state can sue electric utility FirstEnergy Corp as a class, a federal judge has ruled.

U.S. District Judge Edmund Sargus in Columbus on Tuesday certified a class of Ohio residents who were charged a monthly surcharge for electricity under a state law, House Bill 6, designed to raise about $1 billion to subsidize plants owned by a former FirstEnergy subsidiary.

Former Ohio House Speaker Larry Householder, a Republican who championed the law, was federally charged last year with conspiring to secure its passage in exchange for $60 million in bribes. Householder has pleaded not guilty.

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Last July, Ohio resident Jacob Smith filed a Racketeer Influenced and Corrupt Organizations Act civil lawsuit against FirstEnergy, claiming that tens of thousands of customers like him were wrongly charged on their electricity bills to subsidize the survival of Perry and Davis-Besse nuclear power plants. Two similar proposed class action lawsuits were later filed and consolidated with Smith's.

Smith's complaint claims that the $60 million bribe allegedly paid to Householder and his associates originated with FirstEnergy and a subsidiary.

Jennifer Young, a FirstEnergy spokesperson, said the company is "unable to comment on pending litigation."

Lawyers representing Smith and the other plaintiffs did not immediately respond to a request for comment.

The defendants in the cases, who also include FirstEnergy's ex-chief executive Charles Jones, did not oppose the plaintiffs' motion to certify the class, Sargus said in his ruling.

Ohio Governor Mike DeWine signed legislation, in March, that ends the customer-funded subsidies for the plants, according to local media.

FirstEnergy agreed in July as part of a deferred prosecution agreement to pay $230 million to settle U.S. charges that it conspired to pay millions of dollars to elected state officials to pursue House Bill 6.

The Ohio-based company serves over two million customers in Ohio, Tuesday's ruling said.

The cases are Smith v. FirstEnergy Corp. et al; Hudock et al v. FirstEnergy Corp. et al; James Buldas v. FirstEnergy Corp., et al; U.S. District Court for the Southern District of Ohio, Nos. 2:20-cv-3755; 2:20-cv-3954; 2:20-cv-3987.

For Smith: Margaret Murray, William Bartle and Dennis Murray of Murray & Murray

For Hudock et al: Dennis Murray and Margaret Murray of Murray & Murray; and Richard Kerger of The Kerger Law Firm

For James Buldas: Dennis Murray of Murray & Murray; and Richard Kerger of The Kerger Law Firm

For First FirstEnergy Corp.: Michael Gladman of Jones Day

For Charles Jones: Carole Rendon of Baker & Hostetler

Read more:

Ratepayer files class action suit against FirstEnergy amid nuclear plant bailout scandal

Ohio adds FirstEnergy ex-CEO to racketeering lawsuit

Ohio legislature close to revoking nuclear power subsidy

Ohio AG asks judge to block $102 mln FirstEnergy surcharge in nuclear bailout scandal

Ohio AG sues FirstEnergy, others over 'Unholy Alliance' $60 mln bribery scandal

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New York-based correspondent covering environmental, climate and energy litigation.