Regulators’ Foot-Dragging on Public Records Hides Full Story Behind FirstEnergy Scandal
By Kathiann M. Kowalski, Eye on Ohio
This article is provided by Eye on Ohio, the nonprofit, nonpartisan Ohio Center for Journalism, in partnership with the nonprofit Energy News Network. Please join the free mailing lists for Eye on Ohio or theEnergy News Network, as this helps provide more public service reporting.
COLUMBUS, Ohio – Gov. Mike DeWine knew critics questioned whether the former FirstEnergy nuclear plants really needed House Bill 6’s $1.1 billion bailout. But Sam Randazzo, chair of the state’s regulatory commission at the time, assured DeWine the plants couldn’t otherwise cover their costs. DeWine signed the nuclear and coal bailout bill into law in July 2019.
Just one year later, federal agents arrested former Ohio House Speaker Larry Householder and others for alleged crimes related to the bill. And while its nuclear bailout provisions were repealed in 2021, HB 6 remains at the heart of the $60 million corruption scandal that continues in Ohio.
FirstEnergy admitted last summer that it paid $4.3 million to a company linked to Randazzo shortly before his appointment to the Public Utilities Commission of Ohio in early 2019. The company stipulated in a federal court filing that in return for the payment, it expected favorable treatment from Randazzo in his official capacity. Randazzo has denied wrongdoing but resigned from the PUCO in November 2020, days after an FBI search of his home.
“Sam, what do we know about whether nuclear plants need this boost?” DeWine asked Randazzo in a June 2019 message. The email came from DeWine’s personal email address, not his official government email.
“The objective analysis I have reviewed finds that Ohio’s two nuclear plants are not generating sufficient revenue to cover their costs,” Randazzo replied on June 19, 2019. He didn’t say what that analysis was. Nor does it appear that he provided a copy to DeWine or his former chief of staff Laurel Dawson, who was copied on that email. Dawson’s husband had been a lobbyist for FirstEnergy.
Energy News Network and Eye on Ohio received those emails and more than 2,000 other documents at the end of July in response to public records requests made last fall. The documents show how Randazzo, DeWine and others acted leading up to and in the wake of HB 6.
Yet the PUCO has not yet produced all the public records that were demanded in federal subpoenas the agency received in the spring of 2021. And the agency has yet to produce numerous public records relating to communications following Randazzo’s departure between PUCO commissioners and staff, on the one hand, and representatives in the DeWine administration, on the other.
Those materials might explain why the agency has mostly stayed the course with the approach Randazzo crafted for the PUCO’s limited and piecemeal response to the HB 6 scandal. The materials might also explain why the PUCO has limited challengers’ fact-finding efforts in various HB 6-related cases, as well as the timelines for those cases, which won’t wrap up before DeWine and Lt. Gov. Jon Husted face re-election in the fall.
Beyond that, the public records could show whether anyone at the PUCO or in the DeWine administration has directed the agency to thoroughly investigate the alleged corruption at the PUCO, which might help deal with the “black cloud” current PUCO Chair Jenifer French said was hanging over the agency last year.
Subpoenaed public records
The PUCO produced an earlier batch of documents in response to the 2021 subpoenas in February. Among other things, those materials showed how Randazzo and others were looped into the legislative process when HB 6 was being crafted. The materials also showed how he shaped the PUCO’s delayed response after the July 2020 arrests of Householder and others. Materials produced in that batch of documents also raised questions about the impartiality of PUCO hearing examiner Greg Price, who subsequently stepped back from a judge-like role in multiple cases where he had ruled in FirstEnergy’s favor.
The second batch of subpoenaed documents wasn’t turned over to Energy News Network, Eye on Ohio and other public records requesters until July 29, more than five months later. Even then, the document production came six weeks after a court of claims complaint seeking substantially the same materials was filed by Jake Zuckerman of the Ohio Capital Journal. Some responsive materials still have not yet been produced.
Documents in the second batch go beyond the nuclear plants’ need for subsidies. In early 2020, Randazzo met with leaders of Energy Harbor, the company that got the nuclear plants after FirstEnergy Solutions’ bankruptcy. At the time a federal rule threatened to make HB 6 even more costly for Ohio ratepayers.
Other records reflect Randazzo’s hostility to wind energy. He claimed in 2020 that local governments had a say on siting, although Ohio didn’t pass a law for that until 2021. Materials also include his comments about “unwinding challenges” when bills to repeal HB 6 were introduced following Householder’s 2020 arrest.
Yet other materials referred to customer disconnections for nonpayment, the COVID-19 pandemic, and utilities’ costs for energy efficiency programs in 2018 and 2019.
They include costs for energy efficiency programs including lost distribution revenues. Those charges pay utilities to make up for electricity they didn’t sell when energy efficiency programs help customers waste less electricity. They made up about 46% of FirstEnergy’s energy efficiency program costs in 2018 and 2019.
The relatively large share raises questions about company and agency accounting under Ohio’s prior energy efficiency programs. In contrast, AEP Ohio and Dayton Power & Light (now AES Ohio) had nothing allocated for lost revenues in those years. The reason isn’t clear. AEP Ohio also had a total of roughly $32 million for two other types of charges that FirstEnergy didn’t have. That total is still less than half of FirstEnergy’s lost revenues for either 2018 or 2019.
Energy News Network and Eye on Ohio’s review of documents is ongoing. So is the PUCO’s review of what subpoenaed public records requests it will turn over.
“The PUCO is continuing its review of a relatively smaller set of records containing confidential or potential trade secret information to determine whether these records must be withheld,” said a July 29 letter from PUCO Deputy Legal Director Donald Leming.
PUCO spokesperson Matt Schilling said via email he did not have a more precise estimate of how many documents are involved or when they might be produced. Nor would he say why it took so long since February to produce the additional documents. Likewise, he said he did not have an estimate of staff time spent on responding to the public records requests since then.
Schilling also would not give a yes or no answer about whether the PUCO had completed its response to the federal subpoenas. Instead, he wrote, “The PUCO is fully cooperating with the U.S. Department of Justice, and I cannot comment further on its investigation.”
After Randazzo left…
In April 2022, Energy News Network and Eye on Ohio also submitted a public records request for the PUCO’s code of ethics and digital copies of public records reflecting various communications between people at the PUCO and others from the time after Randazzo left, which related to specific topics relevant to the HB 6 scandal.
Among other things, those documents should show if the governor’s office told the PUCO to thoroughly investigate alleged corruption. They also should show if the agency itself undertook any actions to find out the extent of alleged corruption. And they might reflect any directives the PUCO got on the timing of its FirstEnergy cases in light of the upcoming November elections.
Nearly three months after the public records request, the PUCO declined to provide any of the requested public records other than the code of ethics and a DeWine memo saying agency personnel should abide by state ethics requirements. The agency claimed the description of public records was vague and overbroad.
The PUCO’s denial of the public records request as not specific enough “is ridiculous,” said Dave Anderson, policy and communications manager for the Energy and Policy Institute, who also has sought public records from the PUCO. “We live in the 21st century, where emails can be searched for names and topics, enabling public records officers to easily locate and produce emails and documents from a public official’s computer files.”
Anderson first sought public records for Randazzo’s emails relating to HB 6 back in January 2021. “More than a year and a half later, PUCO has yet to complete the production of these public records,” he noted. He added that the agency’s refusal to even say whether it has completed production of records subpoenaed more than a year ago is “even more concerning.”
“This is the same runaround they give everyone. It’s a shame,” said Rep. Jeff Crossman, D-Parma, who noted he also has faced challenges when seeking public records from both the PUCO and from DeWine’s office. “We deserve a government that’s actually transparent and accountable. I’d say that [current PUCO Chair] Jenifer French has been a disappointment, but she’s pretty much exactly what I expected from a DeWine appointee — willing to run interference if it means protecting her future prospects over the best interest of the public.”
“The other interesting question was: With whom did they discuss what records they turned over or did not turn over?” said Ashley Brown, a former PUCO commissioner who had been with the Harvard Electricity Policy Group. Given what Energy News Network and Eye on Ohio asked for, he found it “hard to believe … that the only discussion was within the confines of the commission.”
On July 23, Energy News Network and Eye on Ohio submitted a clarified and narrowed public records request. Schilling has acknowledged receipt. But that’s all. “I also do not have an update on your recent public records request,” he wrote via email. “I will let you know when I know more.”
“PUCO’s long delays in producing these records can only be described as unreasonable,” Anderson said. “PUCO should be focused on investigating FirstEnergy and holding the company accountable on behalf of all the ratepayers hurt by the bribery scheme and its fallout, and that means complying with requests and subpoenas aimed at shining light on that scheme.”
Image via FirstEnergy.
Published by The Business Journal, Youngstown, Ohio.