Coal supplier for HB6-connected plants continued to overcharge for fuel

2023-11-15

Resource Fuels, the coal supplier to power plants at the heart of Ohio’s HB6 corruption scandal, has consistently been overpaid for coal during the first three the law has been in effect, according to an analysis of federal energy data conducted by Checks & Balances Project.

On Nov. 13, Checks & Balances Project reported that independent analysts determined that Resource Fuels was overpaid $12.6 million for coal it supplied to Ohio Valley Electric Co.’s Clifty Creek power plant.

But coal contract details reported by the U.S. Energy Information Administration show that Resource Fuels was also overpaid for the coal it supplied Clifty Creek in 2021 and 2022.

In 2021, Resource Fuels charged between $2.64 and $2.70 per mm/BTU for the coal it supplied OVEC from the River View mine in Waverly, Ky., while Alliance Coal charged between $1.98 and $2.23 per mm/BTU for coal from the same mine, EIA data show.

In 2022, Resource Fuels charged $2.71 per mm/BTU for coal supplied by the River View mine, while Alliance Coal charged $2.22 per mm/BTU for coal from the same time, EIA data show.

Accessing the coal price information from the EIA is difficult. The information is contained in forms EAI-923 and EIA-860 and on the fifth page of a spreadsheet with upwards of 20,000 entries. For most years, the name of Resource Fuels is misspelled in the spreadsheet as “Resource Fules.”

PUCO audit

The terms of HB6 required that Ohio’s Public Utilities Commission (PUCO) conduct an audit of the law. So far, only one audit has been conducted, and it analyzed only 2020.

That audit found that Resource Fuels charged far more for its coal than Alliance Coal, another company supplying coal to the Clifty Creek plant.

The PUCO audit of HB6 riders conducted by London Economics International of Boston noted that OVEC was paying too much for the coal, but the specific details were redacted from the audit released to the public. The actual cost of the coal, the identity of the seller of the coal to OVEC and the percentage of coal OVEC received from the seller were not available to any member of the public interested in learning the details of the OVEC energy riders included in HB6.

“LEI found that for the Clifty Creek plant, the coal purchase prices in 2020 were significantly higher [redacted] than the spot prices from SNL” (an energy price monitoring group), the audit said. “The high average price is mainly attributable to the expensive coal purchases from [redacted] through a contract entered into in 2012, which accounted for more than [redacted] of the total supply in 2020.”

Even though the coal price data for Resource Fuels is available from the U.S. Energy Department, it is redacted because of a protective order the Ohio PUCO granted in July, said Matt Schilling, the PUCO communications director.

“The audit reports are filed under seal pursuant to state law regarding trade secrets,” Schilling told C&BP.

Kentucky reported overcharges

Records filed with the Kentucky Public Service Commission show the 2020 coal sales to OVEC were not the first time Resource Fuels has charged higher prices to OVEC for lower-quality coal.

Between Nov. 1, 2014, and April 30, 2015, Resource Fuels’ coal prices were 41% and 42% higher than those charged by American Energy and an unknown company, the filing with the Kentucky PSC shows. The Resource Fuels coal also had 4.5 percent fewer BTUs per pound than that provided by the other companies.

Ray Locker is the executive director for Checks & Balances Project, an investigative watchdog blog holding government officials, lobbyists, and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.