West Penn Power Co.

This development followed the company's disclosure that it paid $4.3 million in 2019 to an individual to terminate a purported consulting agreement that had been in place since 2013. The counterparty to the agreement was a state government official involved in regulating Ohio companies, including distribution rates for FE's subsidiaries. In July 2020, the U.S. government filed a criminal complaint against the Speaker of the Ohio House of Representatives and four of his associates for participating in an alleged racketeering and bribery scandal related to the passage of House Bill 6. FE subsequently announced the termination of the company's CEO Chuck Jones, and two other executives, for violating company policies and its code of conduct. We view the severity of

...Our ratings on FirstEnergy Corp. (FE) and its subsidiaries, including West Penn Power Co. (WPP), are on CreditWatch with negative implications to reflect the increased probability of a one or more notch downgrade. FE is the parent of WPP. As part of ongoing investigations, FE identified a substantial weakness in its internal controls over financial reporting. The company acknowledged it did not maintain an effective control environment. Specifically, the company's senior management failed to reinforce the need for compliance with the company's policies and code of conduct, which resulted in inappropriate conduct. FE amended its credit facilities because it was out of compliance with representations and warranties contained in the company's credit facilities, specifically related to anticorruption laws and sanctions. The waiver restored FE's ability to draw on the credit facilities. The company subsequently borrowed an aggregate of about $2 billion from its revolving credit facilities. This...

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