FirstEnergy wants Ohio to reopen a $250 million scandal penalty and bless a $2.5 billion grid plan
The utility wants Ohio to reopen a $250 million HB 6 penalty the same month the same commission pared its rate request and a Senate race campaigns on the bailout. Q3 lands Oct 27 with revenue up 8.8% and core EPS already down 3.8%.
Vincent Jiang · 3 min read
A $250 million bill comes back for review
FirstEnergy is asking Ohio's utility commission to take another look at a $250 million penalty tied to the House Bill 6 scandal 1, and this month the same commission pared back the company's rate-hike request 2. The 2019 nuclear bailout, secured with roughly $60 million routed through a dark-money group and worth $1.3 billion to ratepayers, has already cost FirstEnergy a $230 million federal penalty in 2021, a $100 million Securities and Exchange Commission settlement in 2024, and a 2025 state order to refund $186 million plus $64 million in civil forfeiture 3. That final package sums to exactly $250 million, the figure now under review 13.
What the permission slip is worth
The rate case is the prize. Filed May 22, it would set three years of rates from July 2027 through June 2030 and carry roughly $2.5 billion of Ohio grid investment, at a 10.2 percent return on equity versus the 9.63 percent now authorized 4. The state's consumer advocate puts the bill for a typical Cleveland-area household at $15.45 more per month by year three 4. The company has also asked to spend a $3.05 million outage penalty on local upgrades rather than hand it to the state treasury 5.
HB 6 has cost FirstEnergy $580 million, and Ohio may reopen the last $250 million of it
Data
| Value | |
|---|---|
| Federal penalty, 2021 | $230M |
| SEC settlement, 2024 | $100M |
| Rate refund, 2025 | $186M |
| Civil forfeiture, 2025 | $64M |
| State penalty under review | $250M |
Revenue grows, core earnings do not
Second-quarter revenue rose 8.8 percent to $3.68 billion while core EPS fell 3.8 percent to $0.50, even as GAAP EPS rose to $0.50 from $0.46; management reaffirmed 2026 core EPS of $2.62 to $2.82 6. Costs are passing through faster than they reach earnings, and the fix is a docket, not a product.
Revenue is up 8.8 percent year over year; the earnings trail behind
- Revenue
- Net income
Data
| Revenue | Net income | |
|---|---|---|
| Q1 '24 | 3.29B | 0.25B |
| Q2 '24 | 3.28B | 0.05B |
| Q3 '24 | 3.73B | 0.42B |
| Q4 '24 | 3.18B | 0.26B |
| Q1 '25 | 3.77B | 0.36B |
| Q2 '25 | 3.38B | 0.27B |
| Q3 '25 | 4.15B | 0.44B |
| Q4 '25 | 3.8B | -0.05B |
| Q1 '26 | 4.2B | 0.41B |
| Q2 '26 | 3.68B | 0.29B |
FirstEnergy's margin holds near 28% except one hole in late 2025
Data
| Operating margin | |
|---|---|
| Q3 '23 | 27.9% |
| Q4 '23 | 27.1% |
| Q1 '24 | 28.1% |
| Q2 '24 | 21.8% |
| Q3 '24 | 27.8% |
| Q4 '24 | 28.7% |
| Q1 '25 | 29% |
| Q2 '25 | 28% |
| Q3 '25 | 28% |
| Q4 '25 | 9.2% |
| Q1 '26 | 28.3% |
| Q2 '26 | 27.2% |
The street sees ratebase, a senator sees a target
The average analyst target sits at $52.58, 18.8 percent above the $44.26 close on October 6, and Morgan Stanley trimmed its target to $49 while keeping an Overweight rating 6. The politics are less tidy. Sherrod Brown's Senate campaign says Husted "received $3.5 million from FirstEnergy" 7; the documented record is a $1 million dark-money payment reported in 2024, texts describing Husted as helping advance the bill, and his turn as a defense witness at the executives' trial, which ended in mistrial with a retrial planned 3. Husted, appointed when J.D. Vance became vice president, has not been accused of wrongdoing 38. A Brown-aligned post also claims $636,000 to Husted from data-center interests; no independent tally confirms it 10. The race could decide Senate control, with a GOP super PAC now at $93 million in Ohio 89.
Three dates decide it
Results land after the close on October 27 6, Ohio votes on November 3, and commission staff file their rate-case report on November 30 with hearings from March 1 4. Every megawatt of the buildout needs a signature from the commission whose penalty the company wants discounted.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
