UPDATE: July 23, 2020: Ohio Gov. Mike DeWine, R, on Thursday called for a repeal of House Bill 6, a landmark bill to bail out nuclear plants in the state. DeWine previously indicated he would oppose any efforts to repeal the legislation.
"No matter how good this policy is, the process ... by which this bill was passed is simply not acceptable," the governor said during a press conference. "That process, I believe, has forever tainted the bill, and now the law itself."
DeWine called for the policy to be revisited by the General Assembly, and asked the legislature to repeal and replace House Bill 6 through "an open process that the public can have full confidence in."
FE shares closed at $27.33 on Thursday with more than 52 million shares traded. Its stock has been as high as $52.52 in the last 52 weeks.
Dive Brief:
- Ohio-based FirstEnergy Corp's share price crashed Wednesday on the New York Stock Exchange as investors digested a federal complaint implicating the company in a $61 million racketeering bribery scheme.
- The plan was allegedly engineered by a top state lawmaker to win legislative approval for a customer-paid subsidy of two nuclear power plants owned by a former FE subsidiary. FE had sought a bailout as early as 2014, but continued its efforts in subsequent years before lawmakers as well as Ohio regulators.
- FE's share price closed at $27.09 Wednesday after hitting bottom at $22.85 during the day, a low for the last year. More than 135 million shares of the company's 541 million outstanding shares traded hands. Typically between 3 million and 4 million shares are traded every day.
Dive Insight:
Trading turmoil accelerated over the day Wednesday as half dozen financial analysts downgraded FirstEnergy and a dozen nationally ranked investor-oriented law firms announced intentions to file class action lawsuits as share prices fell. As trading began Thursday morning, FirstEnergy's share price opened at $29.01, up nearly $2 from Wednesday's close. But with the first half hour of trading, the price yo-yoed between $26.97 and $28.61 as more than 7.8 million shares traded.
Investor angst spread to Energy Harbor Corp., the company that emerged from the bankruptcy reorganization of FE's subsidiary FirstEnergy Solutions.
Energy Harbor owns and operates FE's former two northern Ohio nuclear reactors. The company is in line to receive up to $1.5 billion over six years in new ratepayer charges created by Ohio lawmakers. Traded by appointment as an "over-the-counter," or "red sheet" stock registered on NASDAQ, Energy Harbor's share price fell to $23.50 on Wednesday, down from $35.35 on Monday. The company could not be reached for comment.
The turmoil comes just days before FirstEnergy is set to release its second quarter earnings results and take questions from analysts in a public meeting available live on the investor section of the company's website. FirstEnergy on Tuesday said in a release that it had received a federal subpoena and would fully cooperate with authorities.
The Justice Department's investigation into the $61 million "pay to play" bribery scheme alleges that Ohio House Speaker Larry Householder, a Republican, created a non-profit organization, allegedly funded by FirstEnergy, to build a political base strong enough to approve legislation subsidizing the operations of the company's two northern Ohio nuclear reactors.
The FBI's arrest of Householder, a top aide and three high-powered political consultants revealed FE's investor vulnerability and ignited a political storm. Lawmakers who opposed passage of the bailout legislation last year announced Wednesday they would introduce a bipartisan bill to delete the 2019 legislation creating the subsidy.
Just hours later, Gov. Mike DeWine, in answer to a question during his daily COVID-19 news conference, said he would oppose any legislative efforts to eliminate the subsidy, set to begin in 2021.
"The policy is good policy. Because people did bad things does not mean that the policy is not a good policy," he said. "If we have any chance of having in the immediate future carbon-free energy production of any significance in the state of Ohio, it has to come from nuclear."
DeWine on Tuesday called for Speaker Householder to immediately step down. The governor said Wednesday he would call a special session of the legislature if the speaker does not step down. He also said he was checking his own political campaign for contributions and will donate contributions to charity from anyone or any organization indicted as the federal probe continues.
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FirstEnergy share price plummets following subpoena in $61M racketeering bribery case - Utility Dive
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