Bailouts and pay for play are never good things. And they often get messy–especially in Illinois where there have been important developments in the Utilities space.
ComEd, a subsidiary of Exelon (NASDAQ:EXC), is the big utility across Chicagoland. ComEd recently agreed to a whopping $200 million fine due to a bribery charge that involved many high-level elected officials in Illinois from 2011 to 2019. The illegal activity was found to be strictly between ComEd and the politicians, so while it may not be a bigger scandal involving Exelon managers, many groups are calling for stricter oversight from Exelon to their subsidiaries.
What’s more, there’s another political bribery scandal that took place–over in the Buckeye State of Ohio. There, FirstEnergy (NYSE:FE) received subpoenas in connection with an investigation of Ohio House Speaker Larry Householder. The Speaker is alleged to have accepted a bribe to keep alive two Ohio nuclear facilities, of course, owned by FirstEnergy.
FirstEnergy’s stock plummeted 44% earlier this week on the troubling news. FES had been seeking a bailout for its unprofitable nuclear units in the state, the Davis-Besse and Perry generators. The bill passed last year, effectively raising rates on many Ohio payers. Renewable energy and lower natural gas prices have priced-out many coal and nuclear power plants in the last few years.
Don’t say the utilities sector isn't interesting.