Ohio’s Top Utility Regulator Resigns After FBI Raid Linked to Bribery Scandal

The evolving investigation into an alleged $61 million bribery
scheme involving Ohio lawmakers and new revelations from�utility
FirstEnergy have led to the resignation of the state’s top
utility regulator. 

Sam Randazzo, chair of the Public Utilities Commission of Ohio
(PUCO), announced his resignation Friday. The resignation comes
days after the
FBI searched
Randazzo’s home as part of an investigation
that’s led to the arrest
of Ohio House Speaker
 Larry Householder and two plea agreements
from his associates in relation to an alleged scheme to funnel
funds to state lawmakers to ensure the passage
of House Bill 6

On Thursday, FirstEnergy disclosed a
$4 million payment
in 2019 to terminate a consulting agreement
with â€œan entity associated with an individual who subsequently
was appointed to a full-time role as an Ohio government official
directly involved in regulating†FirstEnergy’s Ohio
distribution utilities. 

Randazzo, a longtime utility lawyer and consultant,
previously worked for FirstEnergy Solutions, the former generation
arm of FirstEnergy which filed
for bankruptcy
 protection in 2018 and emerged as a standalone
company under the name Energy Harbor earlier this year. 

Federal prosecutors have made it clear that the utility and its
affiliates are believed to be the source of $61 million funneled
through a nonprofit group to maintain the alleged criminal
conspiracy by Householder and four associates. 

In his Friday resignation letter to Ohio Gov. Mike DeWine, the
Republican who appointed Randazzo as PUCO chair in 2019, Randazzo
wrote that these allegations and “the accompanying publicity
will, right or wrong, fuel suspicions about and controversy over
decisions I may render in my current capacity.† 

FirstEnergy’s 10-Q filing with the U.S. Securities and
Exchange Commission cited the $4 million payment as evidence that
“certain former members of senior management violated certain
FirstEnergy policies and its code of conduct.†FirstEnergy’s
board of directors fired
CEO Charles Jones
 and two other senior executives in late
October on the same grounds of violating policies and codes of
conduct.  

Federal prosecutors have not implied wrongdoing on the part of
Randazzo, FirstEnergy, Energy Harbor or Charles Jones.
FirstEnergy’s disclosure of the $4 million payment believed to be
directed to Randazzo has not been connected to the $61 million
associated with the alleged bribery scheme. 

Implications for Ohio energy regulation and nuclear energy
subsidies

However, FirstEnergy’s disclosure and Randazzo’s resignation
did draw fire from groups that have criticized the practice of
appointing people who have worked for Ohio utilities to the state
body tasked with regulating them. 

“Utility consumers may think the regulatory system is rigged
against them. That concern is understandable,†said Bruce Weston,
director of state ratepayer advocate Ohio Consumers’ Counsel, in a
Friday statement. “Until today, a majority of commissioners,
three of five, have worked for utilities that the PUCO
regulates.â€

“Things need to change and that change should begin with real
reform of how PUCO commissioners are appointed and who gets
appointed in this state,†said Weston. The counsel is advocating
for reforms
 to shift the selection of PUCO commissioners to
direct elections and to impose transparency rules to limit utility
spending on those elections.   

Randazzo is known for his
opposition to renewable energy
 during his stints as a utility
consultant and lobbyist. In testimony supporting House Bill 6, he
supported its provisions reducing state funding for renewable
energy and energy efficiency
. He also sits at the head of the
Ohio Power Siting Board, which earlier this year
issued a permit
for a proposed Lake Erie offshore wind project
that included provisions that would restrict its ability to
generate power for much of the year, essentially killing the
project according to its developers. 

House Bill 6 directs more than $1 billion in state utility
ratepayer subsidies to the Davis-Besse
and Perry nuclear
power plants owned by Energy Harbor.
Allegations that Householder and associates used $61 million in
FirstEnergy money to secure its passage and defend it against a
failed popular referendum last year have heightened calls from
opponents to repeal it. 

“The ignominious departure of Chairman Randazzo today will
doubtless maintain pressure on Ohio lawmakers to bring forward some
type of modification to HB 6,†Rob Rains, an analyst with
Washington Analysis, said in a Friday interview. 

It’s likely that the Republicans who are in control of both
houses of Ohio’s legislature will seek to retain HB 6’s support
of the two nuclear power plants important to the state’s economy,
as well as its cuts to renewable energy and efficiency funding,
which have been longtime Republican goals, Rains added. 

But it’s also likely that lawmakers will seek to introduce
measures now lacking in HB 6 to force Energy Harbor to disclose
more financial details of its nuclear power plants, he said. That
could include “some certification that either the need exists or
that some other…set of criteria has been satisfied†to receive
the clean air credits expected to channel between $150 million
and $200 million per year in ratepayer funds to maintain their
profitability and allow them to stay open. 

Source: FS – GreenTech Media
Ohio’s Top Utility Regulator Resigns After FBI Raid Linked
to Bribery Scandal