A would-be class-action lawsuit has been filed on behalf of American Electric Power investors against the utility and its top executives, alleging the company covertly participated in a bribery scandal overseen by ex-Ohio House Speaker Larry Householder to secure a $1.3 billion ratepayer bailout of two nuclear power plants and help for coal plants.
The lawsuit, filed by investor Diana Nickerson, claims investors who purchased AEP stock between November 2016 and July 2020 were “economically damaged” by the company’s involvement with Householder’s campaign to pass HB6.
Empowering Ohio’s Economy Inc., a non-profit funded entirely by AEP, gave a total of $350,000 to two Householder-allied dark-money groups, according to the Columbus Dispatch: Generation Now, which spent millions on TV ads promoting HB6, and the Coalition for Opportunity & Growth, whose political action committee spent about $1 million on ads backing Householder-supported legislative candidates during the 2018 election cycle.
AEP was initially lukewarm about House Bill 6 – that is, until lawmakers added a provision allowing new ratepayer-funded subsidies for two coal-fired power plants in Ohio and Indiana operated by the Ohio Valley Electric Corporation. AEP, which owns 43% of OVEC and buys about 60% of the electricity generated by the coal plants, then became an HB6 proponent.
The lawsuit asserts that because of AEP’s clandestine support of Householder and his efforts to pass HB6, AEP’s stock price was “artificially inflated,” the company “face(d) increased scrutiny,” and it became “subject to undisclosed risk of reputational, legal and financial harm.” The suit seeks unspecified damages.
After the Dispatch published its story on Saturday, July 25 outlining the AEP nonprofit’s donations to Team Householder, the following Monday AEP shares fell $4.79 per share, or more than 5% – thus “damaging investors,” according to the lawsuit.
The suit’s plaintiff estimates that “hundreds, if not thousands” of AEP investors would be eligible to join the suit if a federal court approves its class-action status.
In a statement, AEP spokesman Scott Blake said: “We believe these claims lack merit and we will vigorously defend against them.”
Blake also referred to a July 27 statement released by AEP President and CEO Nicholas Akins asserting that “none of the alleged wrongful conduct in the criminal complaint involves AEP or its subsidiaries.”
Akins continued: “We engaged and participated in the legislative process surrounding H.B. 6 legally and ethically. To date, we have not been contacted by the authorities conducting the investigation, but if at any point we are, we will cooperate fully and transparently.”
Blake stated Friday that AEP has still not been contacted by any authorities conducting the investigation.
The federal investigation against Householder and (so far) four allies centers on a far greater amount of money — about $60 million — that authorities say was given by FirstEnergy to fuel Householder’s political operation and pro-HB6 campaign. House Bill 6 primarily helps two Northern Ohio nuclear plants owned by Energy Harbor, a former FirstEnergy corp. subsidiary previously called FirstEnergy Solutions.