FirstEnergy Stock Plummets On Bribery Scandal, As Exelon Faces Steep Fine
Mike Zaccardi, CFA, CMT | Jul 23, 2020 08:44AM ET
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.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.