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FirstEnergy touts openness, critic questions it

Marty Schladen, Ohio Capital Journal

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Davis-Besse Nuclear Power Station in Ottawa County, Ohio

The Ohio power company at the heart of a historic scandal has taken steps in recent months to move on from it.

Akron-based FirstEnergy conducted an internal investigation that resulted in the firing of its CEO and other top executives. It agreed to forgo revenue guarantees that resulted from the corrupt legislation, House Bill 6, that the company’s former leaders had pushed for. It volunteered in a financial disclosure that a $4 million payment to a man who was about to become a utility regulator might not have been on the level.

“FirstEnergy believes that pursuing an open and comprehensive dialogue with the Public Utilities Commission of Ohio (PUCO) and other key parties will benefit the company as it seeks to resolve a number of PUCO-led proceedings currently underway in a collaborative manner that balances the interests of all stakeholders,” the company said last week in a statement. “Today’s decision builds upon a partial settlement with the Ohio Attorney General to end the collection of (revenue guarantees) permitted by Ohio House Bill 6.”

However, one of those “stakeholders” said, that open posture is belied by arguments FirstEnergy is making to the utility commission. If it was truly being transparent, the company would cease its opposition to a unified, expanded investigation by the PUCO, the Energy Law and Policy Center said.

FirstEnergy was implicated last summer when federal authorities arrested then-House Speaker Larry Householder and four associates on charges that they used $61 million from FirstEnergy and related groups to make Householder speaker and corruptly pass HB 6, which would have raised $1.3 billion from ratepayers — mostly to prop up nuclear plants FirstEnergy began spinning off in 2016, but also to prop up two 65-year-old coal plants owned by a consortium of power companies, including FirstEnergy.

Two of Householder’s associates and a dark money group that was the conduit for much of the money have pleaded guilty.

And former FirstEnergy Lobbyist Sam Randazzo, Gov. Mike DeWine’s appointee to chair the Public Utility Commission of Ohio, resigned in November after the FBI raided his Columbus home.

The raid — and FirstEnergy CEO Chuck Jones’ firing — came after an internal investigation revealed that the company paid someone $4 million as he was becoming a regulator. DeWine later confirmed that Randazzo received the payment.

The money was supposed to be part of a consulting agreement Randazzo had with FirstEnergy. But in a filing last week with the U.S. Securities and Exchange Commission, FirstEnergy indicated that that might have been a ruse.

“FirstEnergy believes that payments under the consulting agreement may have been for purposes other than those represented within the consulting agreement,” said the filing, which was first reported by Cleveland.com. “The matter is a subject of the ongoing internal investigation related to the government investigations.”

That, and other attempts at transparency, are part of the company’s push to get past what U.S. Attorney David DeVillers said was likely the biggest bribery and money-laundering scandal in Ohio history.

“We are taking a number of decisive actions to put our company on the right path forward,” Steven E. Strah, FirstEnergy’s president and acting chief executive officer, said in a statement last week. “Our commitment to engaging constructively with our Ohio regulators and the decision to forego lost distribution revenue are important steps toward removing uncertainty about regulatory concerns in Ohio and positioning the company for long-term success.”

But at the same time the company was releasing that, it was continuing to oppose a request by the Environmental Law and Policy Center that the several scandal-related investigations being conducted by the PUCO be consolidated into a single, expanded probe. Among the items they want to see investigated: Whether, with Randazzo at the helm, the regulator itself played a role in the corrupt scheme.

A FirstEnergy spokeswoman said she couldn’t comment on the investigations, but she referred to the comments made by Strah.

On Thursday, the Environmental Law and Policy Center fired back at FirstEnergy’s claims of openness.

“On FirstEnergy’s analyst call this morning the company stated a desire to work with regulatory stakeholders. It also indicated a desire to sweep all of the regulatory investigations into one big process,” Senior Attorney Rob Kelter said in a statement. “These comments contradict the position it is taking at the Public Utilities Commission, where it opposes the comprehensive investigation that regulatory stakeholders Environmental Law and Policy Center and Ohio Environmental Council requested in a recent motion. At the commission, the company has advocated for a piecemeal, go-slow approach that will delay getting to the bottom of this unprecedented scandal.”


This story was republished from the Ohio Capital Journal under a Creative Commons license.

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