Despite calls from critics for an investigation and other action following the indictment of the former chairman of the Ohio Public Utilities Commission, it is unclear whether regulators will change their stance anytime soon.
Sam Randazzo, who previously chaired the Public Utilities Commission of Ohio, has been charged with conspiracy to commit bribery, wire fraud and other crimes related to the ongoing Ohio corruption scandal, as well as embezzlement. He has pleaded not guilty.
First Energy He admitted in 2021, a $4.3 million payment was determined to be a bribe to facilitate pass Ohio’s coal and nuclear bailout bill, House Bill 6, and obtain other favorable legislation for the company and its utilities.
Randazzo has denied responsibility or wrongdoing. However, before leaving the PUCO in November 2020, Randazzo formed a commission confined response to HB 6 following the arrest of the former Speaker of the Ohio House of Representatives and others this summer.
This indictment details Randazzo’s alleged involvement in shaping HB 6. The indictment also discusses actions Randazzo allegedly took to facilitate FirstEnergy avoid a full 2024 rate-fixing case, limit the company’s legal obligation to return significantly inflated profits, “burn” an audit report related to an unlawful credit enhancement supplement, and more.
“The fox was literally running around and inspecting the henhouse,” said Neil Waggoner, federal deputy director of energy campaigns for the Sierra Club. “And there was no discussion or conversation about that fact and what needs to be done internally to make sure something like this doesn’t happen again.”
Though indictment It was not until December 4 that the facts regarding Randazzo’s alleged crimes were revealed became public for the first time In November 2020, Randazzo resigned from office after Federal Bureau of Investigation agents searched his home and FirstEnergy disclosed that it had made a $4.3 million payment to an entity associated with Randazzo shortly before he took office.
“The PUCO has four open and ongoing investigations into related matters,” spokesman Matt Schilling said when Energy News Network asked what comments Chairwoman Jenifer French and other commissioners had in response to the indictment.
But all four cases involve FirstEnergy, not alleged wrongdoing by Randazzo. And all four cases have been frozen for more than a year, at the request of U.S. Attorney Kenneth Parker, who cited the ongoing federal investigation.
“The commission has repeatedly stated in its documents and orders that it will be guided by two principles: ‘It is of the utmost importance that our investigations do not conflict with a criminal investigation by the United States Attorney or with actions initiated by the Ohio Attorney General,’ and ‘we will follow the facts wherever they may lead,’” Schilling said.
French tried to reassure PUCO employees in an email sent Dec. 4 after the indictment was made public.
“[I]If you’re like me, you were probably upset by the news you heard today about the former PUCO chairman,” she wrote. “As I told you when I joined PUCO, and as I continue to believe, I am personally very proud to be a part of this incredible agency, and that’s thanks to all of you.”
“Everything Randazzo Touched…”
“The PUCO should investigate and review all FirstEnergy cases that were decided during former Chairman Randazzo’s term as chairman,” said JP Blackwood, a spokesman for the Ohio Office of Consumer Counsel. “This would include cases that the PUCO previously declined to reopen/investigate/vacate, as well as any cases that went to Chairman Randazzo.” Those cases include the 2019 case. order an amount of about half a billion dollars was approved for network modernization fees for consumers.
“Regulators need to conduct a comprehensive investigation into what happened in this entire situation,” said attorney Rob Kelter of the Environmental Law & Policy Center.
The group asked the PUCO to review the 2019 grid modernization ruling and three other FirstEnergy cases within days of Randazzo’s resignation. PUCO he rejected this application December 30, 2020 Questions now extend far beyond the cases in which ELPC originally requested a review.
“The commission has done nothing to determine how this happened, who was involved, what happened,” Kelter continued. FirstEnergy paid a fine to the federal government as part of a deferred prosecution agreement. But beyond that, “FirstEnergy has suffered very few consequences so far, other than a few senior executives losing their jobs.”
“Everything Randazzo touched is questionable,” said Ashley Brown, a former PUCO commissioner. “How could they not have a legal problem?”
In December 2020, Brown and former commissioners Todd Snitchler and J. Michael Biddison asked Gov. Mike DeWine to order an independent audit what would include a review Randazzo and FirstEnergy interactions. This would apply to any actions in which Randazzo participated or supervised that appeared to indicate favoritism or improper advantage to FirstEnergy or any of its subsidiaries.
This audit never happened.
DeWine spokesman Dan Tierney said his office had not yet reviewed the indictment but noted that it “alleges very serious offenses. Our office has full confidence in the criminal justice system to handle these serious allegations appropriately.”
Tierney did not respond to Energy News Network’s question about whether DeWine discussed anything related to the PUCO or his leadership when he and Lieutenant Governor Jon Husted had lunch with former FirstEnergy executives Chuck Jones and Mike Dowling on Dec. 18, 2018, as previously reported via Dayton Daily News. A spokesman for Husted also did not respond, referring to what a DeWine spokesman said.
According to the indictment, Randazzo met with Jones and Dowling that same day, and that evening a company executive texted him to arrange the payment.
After FirstEnergy admitted in a 2021 deferred prosecution agreement, the Sierra Club also asked Ohio Attorney General David Yost and Ohio Inspector General Randall J. Meyer for an independent investigation into all of Randazzo’s decisions. More than two years later, Waggoner has yet to hear back.
As Waggoner said, the DeWine administration’s overall response “has been either mute or completely incompetent.”
At stake exceeding $1 billion
The four suspended cases involve millions of dollars in alleged overcharges or illegal spending, as well as potential penalties of up to $1.4 billion. Regulators negative the Ohio Office of the Consumer Advocate’s request to lift the stay on these cases in October, indicating its intention to continue work on other FirstEnergy cases.
One such case involves the company charging customers who don’t seek their own energy supplier. This case also seeks to add additional charges for passengers under the so-called Electric Safety Plan, or ESP. About $1.4 billion The situation may be at risk, according to a review of FirstEnergy documents by Energy News Network.
At a minimum, the PUCO should stay parts of the case that involve a fee known as the delivery capital return allowance, Blackwood said. That same allowance is also under investigation in one of the four cases that were stayed.
“The commission expresses itself through its written records and orders, and I cannot speculate on the outcome of pending or future cases,” Schilling said when asked by Energy News Network about the possibility of an order severing the toll applications from the rest of the case. An evidentiary hearing has been underway at the PUCO for several weeks, and briefings are expected in the coming weeks.
Regulators should also hold off on another grid-modernization case in which FirstEnergy is seeking to collect millions more from consumers, Blackwood said. The case is a continuation of an earlier grid-modernization case approved when Randazzo was chairman.
The PUCO also has several pending cases related to House Bill 6. coal subsidies for two coal-fired power plants from the 1950s
Lawmakers may ultimately need to act to force regulatory reform. FirstEnergy will now have to go through a full rate-setting process in 2024, which should include a detailed review of its full financial situation.
But Kelter pointed to allegations in the indictment detailing alleged efforts by the company and Randazzo to avoid that. For Kelter, the case demonstrates the value of forcing a utility to step into a full-rate case if it needs additional revenue, rather than asking for partial supplements.
“You just look at the lengths FirstEnergy went to in 2019 to avoid the 2024 rate issue… The absurdity of it is beyond belief,” Kelter said, testifying on the subject in connection with Senate Bill 102 on Dec. 5.
State Representative Casey Weinstein also noted the proposal Anti-Corruption Act and the bill to return of coal subsidies HB 6.
“The indictment of Sam Randazzo is a stark reminder of the largest political corruption scandal in Ohio history,” Weinstein said. “It is unacceptable that Republicans did absolutely nothing in its wake and that the corrupt HB 6 remains the law for which Ohioans continue to pay millions.”
“While we cannot comment on actions taken by the United States Attorney’s Office for the Southern District of Ohio, FirstEnergy has taken significant steps to put its past problems behind us,” said FirstEnergy spokeswoman Jennifer Young. “Today, we are a different, stronger company with a solid strategy and a bright future.”
This article first appeared Energy News Network and is reprinted here under a Creative Commons license.
