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Cleveland City Council OK’s investigating efforts against CPP, but members want to scrutinize CPP, too

The Plain Dealer  Cleveland logo The Plain Dealer Cleveland 8/13/2020 By Robert Higgs, cleveland.com

CLEVELAND, Ohio – Cleveland City Council voted unanimously Wednesday to launch investigations into whether any parties accused in the statehouse corruption scandal involving bailouts of Ohio’s nuclear plants sought to harm city-owned Cleveland Public Power.

City Council President Kevin Kelley, the primary sponsor of the resolution, noted that CPP is a competitor to FirstEnergy in Cleveland and that he intends for the investigation to include a look at lobbying by FirstEnergy.

“There are active organizations that are hostel to Cleveland Public Power and seeking to destabilize Cleveland Public Power,” Kelley said. “My questions are very simple: Who’s funding these operations and did any of the money come from one of the sources ... that are involved in the HB6 investigation.”

But several members made clear they also wanted to scrutinize Cleveland Public Power itself with an eye toward making the struggling utility more efficient and more accountable to the public.

“If we’re going to talk about what’s impacted CPP, then we need to talk about how CPP has been run and how CPP has been managed,” Councilman Mike Polensek said in an interview with cleveland.com after council’s meetings.

The resolution approved Wednesday calls for repeal of HB 6, which provided more than $1 billion in ratepayer subsidies for Ohio’s Davis-Besse and Perry nuclear power plants. The plants are owned and operated by Energy Harbor – formerly FirstEnergy Solutions, a subsidiary of FirstEnergy Corp., until it broke away earlier this year.

Approval from Mayor Frank Jackson would be needed to launch the probe, which could involve council’s little-used power to issue subpoenas. The mayor is expected to sign the legislation.

The General Assembly approved HB6 last year and Gov. Mike DeWine signed it into law. In addition to the nuke plant bailout, it also gave coal plants in Ohio and Indiana subsidies and it effectively gutted the state’s green-energy mandates for utilities.

Those changes hurt Cleveland, which had set goals to reduce its emissions by 20% by 2020 and by 25% by 2025. The legislation made worthless more than 600,000 renewable energy credits that Cleveland had acquired to be applied against energy efficiency requirements.

In July, then Ohio House Speaker Larry Householder and four allies were charged with conducting a bribery and money-laundering scheme. They are accused of funneling more than $60 million in FirstEnergy donations through a “web” of dark-money groups and bank accounts to expand the speaker’s political power, thwart an anti-HB6 referendum effort, and enrich themselves by millions of dollars.

Court records refer to actions taken on behalf of Company A. Federal prosecutors, while not naming the company, made it clear that it is FirstEnergy.

In Cleveland, FirstEnergy has about 60,000 customers. CPP has about 70,000 residential, commercial and industrial customers.

The council has the authority under Cleveland’s charter to subpoena witnesses, compel production of documents and take testimony to investigate issues of city interest. While the council often has hearings, it has been years since it has subpoenaed witnesses.

Regardless of whether those involved with the HB6 scandal were working against CPP, several members said CPP also needs scrutiny.

Polensek led the charge on that issue. Polensek’s ward includes the Collinwood area, which has the highest concentration of CPP customers in the city.

And as a member of City Council since the late ’70s, Polensek remembers efforts to protect the city-owned utility when it was under attack. He recalled fights to save the utility, dating from when Dennis Kucinich was mayor and the utility was called Municipal LIght.

“We walked the streets to save the system,” Polensek said, gathering names on petitions in support of the public utility.

But times have changed. Polensek told cleveland.com he’s concerned about the utility’s stability and that rates charged to consumers are no longer a bargain, compared to those of FirstEnergy. At one time, customers paid 33% less than rates charged by the former Illuminating Company, he said.

“Think about the money people saved with that 33%,” Polensek said. “I would get calls back in the day from people who’d say, ‘How can I get on Cleveland Public Power’,” Polensek said.

“That’s gone. That’s all evaporated,” he added. “On the other side of the equation, there’s no doubt there’s been some terrible decisions made.”

Those include long-term contracts with coal-fired and hydro plants for electric generation that no longer have attractive prices.

During the meeting, Councilmen Kevin Conwell, Basheer Jones and Joe Jones backed Polensek’s call for scrutinizing CPP. Councilman Brian Kazy, who chairs council’s Utilities Committee, said he hopes to have hearings about CPP operations later this year.

Kelley, during the meeting, said he didn’t object. He said the HB6 scandal should serve as a reminder that Cleveland needs to protect CPP.

“It’s kind of like a wakeup call to shore up this asset,” Kelley said. “To make sure the capital product is in good working order. To make sure the operational component of it is in good working order.”

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