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Groups ask utilities commission to investigate ex-chairman

January 27, 2021 GMT

COLUMBUS, Ohio (AP) — Environmental advocacy groups asked the Public Utilities Commission of Ohio on Wednesday to expand its investigation of Ohio’s largest electric utility to include whether the commission’s former chairman was unduly influenced by the company, Akron-based FirstEnergy Corp.

A motion filed by attorneys for Chicago-based Environmental Law & Policy Center and the Ohio Environmental Council argues the utilities commission should expand and consolidate several cases, including a probe into charitable giving and political donations made by FirstEnergy to support passage of scandal-tainted legislation that aimed to provide $1 billion in subsidies to two nuclear power plants once owned by a FirstEnergy subsidiary.

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The groups want the commission to investigate ties between the company and its former chairperson, Samuel Randazzo. Randazzo resigned as Ohio’s top utility regulator in November days after FBI agents searched his Columbus townhome and FirstEnergy revealed in a U.S. Securities and Exchange Commission filing that former top executives at the company paid $4 million in early 2019 to end a consulting contract to someone who fit Randazzo’s description.

Randazzo became chairman of the utilities commission and the Ohio Power Siting Board, which regulates energy projects, in April 2019.

FirstEnergy is the subject of multiple investigations after federal authorities alleged last July that the company funded a $60 million bribery scheme to get the legislation, known as HB6, approved and to prevent a referendum issue on the bailout from reaching the Ohio ballot.

The former Ohio House speaker and four others were subsequently indicted on a federal racketeering conspiracy charge.

Wednesday’s filing noted the firing of FirstEnergy CEO Chuck Jones and other top company executives last fall and other events that “further support” the utilities commission’s “duty to provide a robust investigation into the First Energy Utilities’ involvement in the passage of HB6.”

“The PUCO seems to be waiting for the federal investigation and conducting only a limited investigation of its own. That’s not enough,” said Rob Kelter, a senior attorney for the Environmental Law & Policy Center, said in a statement. “If we’re going to protect Ohio ratepayers, the PUCO must widen its investigation to find out the exact nature of Sam Randazzo’s ties to FirstEnergy and its affiliates, how those companies guided House Bill 6 through the Legislature and how state officials let a utility set public policy.”

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The filing repeats a widely held belief that Randazzo helped write the bailout legislation.

Messages were left Wednesday with two attorneys who represent FirstEnergy at the PUCO.

Other open cases the groups want consolidated include requests by the Ohio Consumers’ Counsel, the state’s consumer watchdog, that the commission reexamine cases from 2017.

One case involves an audit to determine whether FirstEnergy complied with laws and regulations requiring its utility business affairs be kept separate from affiliated companies.

The second is a request to reexamine how FirstEnergy spent $465 million collected from ratepayers for upgrading its local distribution systems. The money instead was used to fund a money pool from which FirstEnergy subsidiaries, including some located outside Ohio, could borrow from, improve the company’s financial position, and increase dividend payments to shareholders, a previous PUCO audit found.

The PUCO when it approved the subsidy did not require the company to spend the money on distribution upgrades.

The Ohio Supreme Court ruled the subsidy called a grid modernization rider illegal in 2019 but did not order FirstEnergy to pay the money back to customers.

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Gillispie reported from Cleveland.