HB6 enabled coal company that donated to Householder bribery fund to keep overcharging for coal

2023-11-12

A coal company that donated to the fund used to bribe former Ohio House speaker Larry Householder was overpaid for coal because of the law the now-imprisoned Householder rammed through the Ohio Legislature in 2019, according to an audit of the law, federal records and testimony by utility analysts.

That law, HB6, includes riders that require Ohio ratepayers to subsidize the operations of two coal-fired power plants — Clifty Creek and Kyger Creek — run by the Ohio Valley Electric Company (OVEC). HB6 also gutted Ohio’s renewable fuels standards.

According to Ohio and federal records, Resource Fuels LLC of Columbus was one of two main suppliers of coal to the Clifty Creek plant in 2020. An audit conducted for the Ohio Public Utilities Commission found that OVEC was overpaying for coal used to power both plants, which are also allowed to run at will and send power to the electrical grid.

Records show that in 2020, Resource Fuels was paid $12.6 million more for the coal it supplied OVEC than another coal supplier, Alliance Coal, was paid. The overpayments are 50.4 times more than its $250,000 donation to Generation Now, the fund used to bribe Householder.

Campaign finance records and court documents show that Resource Fuels’ owner, Wayne Boich, and his wife Cynthia were among the first donors to Generation Now after its creation in February 2017. They gave $25,000 on Feb. 13, 2017. The Generation Now bank records were obtained by federal prosecutors for their successful trial of Householder and former Ohio Republican Party chairman Matt Borges earlier this year.

Resource Fuels then donated $250,000 to Generation Now on April 5, 2018, one month before the Ohio primary election. Householder used the money in the Generation Now account to back candidates in Republican state House primaries who would later support his campaign to become House speaker after the 2018 general election. Householder, however, spent more than $500,000 of the money to pay off credit card balances, repair his Florida home and settle a business lawsuit.

Resource Fuels’ deal with OVEC

Records from the U.S. Energy Information Administration show that in 2017 Resource Fuels only supplied coal to the two OVEC plants — Kyger Creek for one month and Clifty Creek for the rest of the year.

In 2018 and 2019, federal records show, Clifty Creek was the only plant for which Resource Fuels supplied coal. Without OVEC, Resource Fuels supplied no coal to any other power plant, according to federal records.

“OVEC purchased coal sourced from River View Mine in Kentucky for the Clifty Creek unit through two separate suppliers: Resource Fuels and Alliance Coal,” said utility expert Elizabeth Stanton in testimony submitted to PUCO in October.

“The coal purchased through Resource Fuels was at a higher price than the coal purchased through Alliance Coal, despite having the same average heat content,” Stanton said. “Specifically, Resource Fuels supplied 1,016,071 short tons of coal to the Clifty Creek Unit for $60.1 million ($2.57 per MMBtu) and, in contrast, Alliance Fuels supplied 1,249,160 short tons of coal for $59 million ($2.03 per MMBtu). On a per MMBtu basis, OVEC paid $0.54 more MMBtu for coal purchased from Resource Fuels than coal from the same mine with the same heat content purchased from Alliance Coal.

2019 EIA.gov coal sales report showing Resource Fuels as Clifty Creek coal supplier.

2019 EIA.gov coal report “If OVEC had paid the same per MMBtu price for coal from Resource Fuels as they had for Alliance Coal in 2020, the total cost for coal supplied from Resource Fuels would have been $47.5 million compared to $60.1 million (a difference of $12.6 million),” Stanton said.

John Seryak, a utility analyst with the firm RunnerStone, submitted testimony to the PUCO in October that Resource Fuels had overcharged OVEC for coal for years, citing cost details collected by the U.S. Energy Information Administration (EIA).

Audit details redacted

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.”

Several utilities with a stake in the audit have fought to keep these cost details secret, including filing a Nov. 3 motion with the PUCO to prevent consumer advocates from seeking more price data, claiming that “such an investigation is beyond the scope of this proceeding and the assessment contemplated.”

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.