Lobbying blitz by FirstEnergy as Trump mulled bailouts for coal and nuke plants

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By Dave Anderson, The Energy and Policy Institute

new filing in the bankruptcy case for FirstEnergy Solutions details how lobbyists at Akin Gump, Washington, DC’s top-earning lobbying firm, spent hundreds of hours in April working on a renewed campaign to secure bailouts for the utility’s coal and nuclear power plants from the Trump administration and state lawmakers in Ohio and Pennsylvania.

The nearly $1 million that FirstEnergy Solutions is now known to have paid Akin Gump for its political work in the first four months of 2018 has brought the bankrupt utility a step closer to winning a federal government bailout that clean energy advocates warn could cost consumers $8 billion.

The White House issued a statement on June 1, 2018, which said President Trump has directed his Secretary of Energy Rick Perry to “prepare immediate steps to stop the loss” of what the administration described as “fuel-secure sources” in a thinly veiled reference to coal and nuclear power plants.

The statement was thin on details, but came after Bloomberg broke the news that the Trump administration has been working on plans to use rarely invoked provisions of the Defense Production Act and Section 202(c) of the Federal Power Act to bail out coal and nuclear plants. Bloomberg obtained a May 29, 2018 draft memo that was circulated before a National Security Council meeting.

“Federal action is necessary to stop the further premature retirements of fuel-secure generation capacity,” the memo said.

When FirstEnergy Solutions filed for bankruptcy just over two months earlier, on March 31, Akin Gump Strauss Hauer & Feld was lined up to serve as its legal counsel and lobbyist. Akin Gump also topped a list of Washington, D.C.’s firms for lobbying revenueduring the first quarter of 2018.

On March 29, FirstEnergy Solutions petitioned Energy Secretary Rick Perry to use the emergency powers of Section 202(c) of the Federal Power Act to order regional grid operator PJM to bail out a long list nuclear and coal power plants.

On May 30, Akin Gump filed it first monthly fee statement in the bankruptcy case of FirstEnergy Solutions. The filing offers a rare look inside Akin Gump’s high-priced lobbying campaign on behalf of FirstEnergy Solutions.

Akin Gump’s 100-plus page report covers the month of April, and reveals a top lobbyist’s calls with the Department of Energy and White House to discuss the status of the Section 202(c) proposal. It also reveals Akin Gump’s calls with a state-level lobbyist to discuss a FirstEnergy meeting with Richard Cordray, the Democratic candidate for governor in Ohio.

Akin Gump reported $443,396 in fees for work on “Energy Regulatory Issues” for FirstEnergy Solutions in April, plus over $310,000 in fees for federal and state“Government Affairs” work. When you add in the $230,000 Akin Gumpin disclosed in a federal lobbying report for January-March, that’s nearly $1 million dollars the firm received for its political work on behalf of FirstEnergy Solutions in the first four months of 2018.

The Energy and Policy Institute uploaded the Akin Gump filing to DocumentCloud and has annotated the document to highlight examples of FirstEnergy’s high-priced campaign for a federal or state level bailout.

Below are some of the most noteworthy examples.

Targeting the Trump administration

On April 13, Akin Gump reported a “call to DOE re potential 202c determination” and a “call with White House staff re 202 status” by “JRT” or James Romney Tucker. The filing disclosed $53,312.00 in fees at a rate of $930 per hour for Tucker’s “Public Law & Policy” work for FirstEnergy Solutions.

Tucker worked for Newt Gingrich in 1996, when Gingrich was speaker of the U.S. House, according to his bio on Akin Gump’s website. Gingrich is now a close ally of President Trump.

Much of the work Akin Gump reported doing on behalf of FirstEnergy Solutions involved Section 202(c) of the Federal Power Act or the Defense Production Act, the two laws that the Trump administration is now considering using to bail out coal and nuclear power plants.

On April 4, “GKV” or Geoffrey K. Verhoff logged, “Emails with internal team re talking points for Congressman McKinley and Trump’s West Virginia visit.” Verhoff is a senior advisor at Akin Gump.

President Trump visited West Virginia that same day and promised supporters that his administration would “look at” using its Section 202(c) emergency powers to keep coal and nuclear power plants running.

Akin Gump disclosed a total of $27,607.50 in fees at a rate of $675 per hour for “Public Policy” work by Geoffrey Verhoff. According to his bio on the firm’s website:

Mr. Verhoff continues to maintain an active role in Republican politics. He is a current regional vice chairman of the Republican National Committee’s finance leadership team and has been extensively involved in the past four presidential campaigns, as well as numerous House, Senate and third-party efforts.

Verhoff contributed $1,000 to the Trump transition, according to PRI.

On April 5, Verhoff reported “internal discussions re Jeff Miller and FE engagement of lobbyists.”

Jeff Miller ran Rick Perry’s 2016 unsuccessful presidential campaign. After Perry became Energy Secretary, Miller started his own lobbying firm, Miller Strategies LLC, and has lobbied on behalf of FirstEnergy. According to Bloomberg, Miller attended a fundraiser dinner with Trump the night before the president made the public comments about the utility’s bailout request. Miller Strategies has reported $110,000 in lobbying fees billed to FirstEnergy each quarter since the third quarter of 2017 and notes that the Executive Office of the Presidentthe Vice President, Department of Energy, and Congress have all been lobbied.

On April 30, “HAT” or Henry A. Terhune, a partner at Akin Gump, worked to “review/edit draft letter for OSU letter to Secretary Perry regarding 202c petition…” It is unclear what or who OSU is in the lobbyist’s note, but it could be referring to Ohio State University.

 

Coordinating with members of Congress to influence the Trump administration

In March, the Cleveland Plain Dealer reported on two separate letters sent by members of Congress asking FERC and President Trump to intervene to keep coal and nuclear power plants open. “FirstEnergy insists it has not been involved in either of these new lobbying campaigns,” John Funk reported.

But in April, Akin Gump lobbyists met or corresponded with a number of members of Congress and their staff, including Rep.resentatives Bill Johnson of Ohio, Rep. David McKinley of West Virginia, and Rep. Keith Rothfus and Senator Pat Toomey of Pennsylvania.

On April 12, Secretary Perry testified before the House Subcommittee on Energy, where he responded to a question from McKinley. As Utility Dive reported:

“Some form of 202(c) or some other emergency act is necessary if we’re going to have national security,” McKinley said. “I’m calling on you to use whatever legal power you have so … we can have a reliable grid system.”

“I hope your remarks have been televised and we can put them up,” Perry responded, “because you have succinctly made the point of exactly what has to happen in this country from the standpoint of being able to protect the resilience and reliability of our electric grid.”

In the days between when the hearing was announced and when it took place, Tucker reported a call and meeting with “E&C committee staff,” and Verhoff logged his work to “follow up with Congressman McKinley staff via email…”

Don Moul, the president of FirstEnergy Solutions Generation Companies, was personally involved in Akin Gump’s work around the “E&C meeting,” according to multiple log entries.

On April 27, Rothfus and McKinley put out a press release announcing their latest effort to urge “the Trump administration to protect coal and nuclear power plants,” a letter signed by 20 members of Congress.

Earlier, on April 12, a “call with Rothfus office re Congressional 202 letter and next steps” was made by Verhoff. The next day, Verhoff met with McKinley’s staff.

Verhoff later logged emails and calls with Rothfus’s office “re 202c rumors” and to follow up on press coverage after the letter was released.

 

A renewed push for bailouts in Ohio and Pennsylvania

In a separate filing found in FirstEnergy Solution’s bankruptcy docket, the Dewey Square Group disclosed its work to revive the utility’s campaign for a state level bailout for its nuclear power plants:

Since March 21, 2018, the Debtors have requested that the firm provide management of an advocacy campaign in support of legislation related to nuclear energy in Ohio and Pennsylvania, and the Firm has agreed to provide such services.

John Giesser, COO for the Dewey Square Group, disclosed a monthly fee of $98,500 for Jason Cohen and Jonathan Drobis to work on the FirstEnergy Solutions campaign. Cohen is the head of the firm’s National Grassroots Practice and Drobis is a principal in the same practice.

Dewey Square Group is a Hill + Knowlton Strategies company that runs advocacy and astroturf campaigns for corporations. According to the Washington Post, the firm “has been paid by General Motors Corp., the American Insurance Association, AT&T Corp., Blue Cross and Blue Shield Association and Microsoft, among others, to drum up support from voters for legislation the companies advocate.”

On April 19, Verhoff reviewed a “DSG plan for grassroots mobilization in PA/OH…”

Akin Gump worked with Dewey Square Group and a number of other lobbying firms on the state campaigns. Verhoff was involved in discussions about a FirstEnergy meeting with Richard Cordray, the Democratic candidate for governor in Ohio.

Verhoff reported an April 1 meeting with “Juan/Oxley to discuss Columbus outreach and related strategy” and to “discuss Kasich outreach, OH targets, and campaign issues…”

Juan Cespedes of The Oxley Group is a registered lobbyist for FirstEnergy Solutions in Ohio.

Verhoff later reported an April 9 “Call with OH counsel re: Columbus landscape and Corday interaction in advance of FE meeting…”

Two days later, Verhoff logged a “call with J. Oxley to discuss OH assembly issues including FES Columbus visit, resignation of OH speaker, and Cordray FE visit.”

Several bills to bail out FirstEnergy’s nuclear power plants in Ohio stalled under former Ohio House Speaker Cliff Rosenberger, whose resignation amidst an FBI investigationappeared to open the door for Rep. Larry Householder to mount an early bid for the speaker position. Householder is a co-sponsor of the latest version of FirstEnergy’s “Zero Emissions Nuclear,” or ZEN, bailout legislation.

The Cleveland Plain Dealer reported on how before Ohio’s primary elections, FirstEnergy made contributions to Householder’s campaign and to candidates who were likely to support his bid for speaker. Two days later, Akin Gump reported work to “Review media report on lobbying and also Ohio political participation by FE (parent).”

Householder decided to wait until 2019 to mount his bid for speaker, and the speakerless Ohio House remains mired in a political stalemate that has stalled votes on any legislation.

Meanwhile, Akin Gump was engaged in staff discussions of new “draft OH legislation by Rep. Ardnt.”  It is not clear what the new draft bill will entail.

Elsewhere in the Akin Gump log, work to “review draft paper on potential RPS solutions in OH AND PA and discuss with staff” is reported. Some states have modified their renewable portfolio standard policies to benefit the nuclear industry, though usually as part of a compromise that also strengthens support for renewable energy.

 

New details about FirstEnergy’s use of the Nuclear Energy Institute as a political arm

FirstEnergy Nuclear Operating Company disclosed annual dues payments to the Nuclear Energy Institute that amounted to $1,286,969.23 in another bankruptcy filing.

“All options to prevent the closure of nuclear plants should be explored,” John Kotek, the vice president of policy development and public affairs for NEI, said in a statementregarding the 202(c) petition that FirstEnergy Solutions filed with Secretary Perry.

On April 9, Akin Gump’s Terhune worked to “Review ICF proposed study proposal for NEI on resilience analysis and correspondence with staff re same…”

A month later, on May 9, NEI filed comments with FERC that included an interim report by ICF titled, “The Impact of Fuel Supply Security on Grid Resilience.”

NEI called on FERC to “Foster resilience by adopting planning standards and market policies such that generators that contribute to resilience are incentivized to participate in the market.” In short, this was a call for action to bail out nuclear power plants.

Akin Gump lobbyists also held a teleconference with NEI in April, and worked with an outside firm on polling and focus group targets from information provided by the Nuclear Energy Institute and FirstEnergy.

 

Lobbyists get paid… and consumers may pay the price

While a state or federal government bailout of coal and nuclear power plants is not a done deal, analysis has shown that an earlier bailout proposal by the Trump administration could have cost consumers billions of dollars. Similarly, analysis has warned that one version of FirstEnergy’s nuclear bailout in Ohio could cost consumers hundreds of millions of dollars.

While residents of some communities may benefit from bailouts that preserve jobs and tax revenue that power plants provide, far more consumers will be left to pay the bill. Ultimately, it is the lawyers and lobbyists at Akin Gump, as well as FirstEnergy’s shareholders, that seem poised to benefit at consumers’ expense.

 

This article was first published on The Energy and Policy Institute blog. It has been reprinted with permission.

Dave Anderson is the policy and communications manager for the Energy and Policy Institute, and has been working at the nexus of clean energy and public policy since 2008.

The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

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