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Welcome to Eye on Utilities

This monthly newsletter provides updates on Ohio’s ongoing utility corruption scandal and is a joint project of Eye on Ohio, the nonprofit, nonpartisan Ohio Center for Journalism, and the nonprofit Energy News Network. The next edition will be sent on Tuesday, Nov. 9

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By Kathiann Kowalski

Householder trial not likely to begin before spring

On Oct. 5, a judge set a briefing schedule in the criminal case against former House Speaker Larry Householder that means the case won’t go to trial until next spring at the earliest

Several court cases, including civil cases against Householder, FirstEnergy, Energy Harbor, former FirstEnergy executives Chuck Jones and Michael Dowling, and Sam Randazzo are on hold until after Householder’s trial. A few other cases are moving ahead, but protective orders limit sharing of documents.

Read more: House Bill 6 case: 50K more pages turned over, lengthy trial expected next year (Columbus Dispatch)

Document disputes

FirstEnergy continues to resist producing all documents relevant to its HB 6 activities. Advocates say it will be harder to find out how much money for the HB 6 scandal ultimately came out of consumers’ pockets. And it will be harder to prevent future cases of corruption.

A September 14 mid-case ruling limited what materials the Office of the Ohio Consumers’ Counsel can get so far. Government agencies have likewise lagged behind in document production. 

Speaking on September 28, Rep. Jeffrey Crossman, D-Parma, detailed problems he and Casey Weinstein, D-Hudson, faced in trying to get public records from Gov. Mike DeWine’s office and from the PUCO.

‘Independent’ audits?

The PUCO’s independent audits may not be so independent after all, suggest emails attached to testimony on a bill to repeal HB 6’s coal plant subsidies

Before HB 6 became effective, the two 1950s-era plants were subsidized under certain PUCO orders, subject to an audit. Ohioans now pay about $233,000 per day for them under HB 6.

Emails from last year show that American Electric Power’s Ohio utility got an advance copy of an audit on the coal plants’ costs “for redacting.” Additionally, PUCO staff asked for “reduced subjectivity” and less detail about the HB 6 scandal, along with changes to the auditor’s conclusion that “keeping the plants running does not seem to be in the best interests of the ratepayers.”

Read more:
State regulators made 'utility-friendly' edits to audit of coal plant bailout, emails show (Ohio Capital Journal)
Ohioans still paying massive coal plant subsidies under House Bill 6 (Cleveland.com)

 

 Speaking of audits...

A September 13 audit report on FirstEnergy’s corporate separation compliance found no major violations of the company’s obligation to keep its regulated Ohio utilities separate from their affiliates. 

Nonetheless, the audit found eight minor violations and 13 opportunities for improvement, which might have facilitated money transfers related to the alleged corruption scheme or improper charges to consumers.

Additionally, that report noted that the auditor was missing five years’ worth of materials from FirstEnergy’s former compliance officer, who was let go in the wake of the HB 6 scandal. The gaps matter because they could have influenced the report’s conclusions. Beyond that, they raise more questions about the thoroughness and integrity of the PUCO audit process.

Key DeWine aide resigns

Dan McCarthy resigned as Gov. Mike DeWine’s director of legislative affairs on Friday, September 24. Previously, McCarthy was president of the Success Group, where he was a registered lobbyist for FirstEnergy and various other clients. McCarthy also had been the president of the nonprofit group Partners for Progress, Inc. FirstEnergy admitted in July that its former executives were involved in setting up the group, funding it, and directing its payments to other groups in the HB 6 scandal.

Questions remain about whether McCarthy played any role in HB 6 after joining DeWine’s administration and how much the governor might have known about the dark money behind the law.

Still to go?

Reps. Crossman, Weinstein and Kent Smith, D-Euclid, have also called for the resignation of Laurel Dawson, DeWine’s former chief of staff, who continues to serve as a counselor to the governor. Former PUCO chair Sam Randazzo said in 2019 that Dawson and Lt. Gov. Jon Husted helped recruit him for the position. Dawson apparently had received warnings about Randazzo’s ties to FirstEnergy before his appointment as PUCO chair.

Dawson’s involvement also raises questions about how long she or DeWine might have sat on knowledge about FirstEnergy’s $4.3 million payment to Randazzo. DeWine’s statements this summer indicated that Randazzo may have told her about the money as early as late October of 2020, and she told him. But DeWine was vague about the timing. The FBI raided Randazzo’s home in November last year. He didn’t resign until days later.

Read more: House Dems continue to push DeWine for more accountability over House Bill 6 (Spectrum News)

Stadium saga

Also in September, Smith and Crossman asked Cleveland Browns owners Jimmy and Dee Haslam and Cleveland Mayor Frank Jackson to remove FirstEnergy’s name from the lakefront stadium where the team plays.

Spokesperson Jennifer Young said the costs were incurred by the parent company, FirstEnergy Corp., and that the company “has a longstanding commitment to supporting communities through sponsorship of civic, athletic and arts organizations.” Nonetheless, on September 29, the PUCO expanded an ongoing rate audit to find out if costs for the naming rights had been passed on to ratepayers.

Meanwhile, unless all parties concur, any name change for the stadium likely would depend on contractual terms agreed upon by the parties and approved by Cleveland’s city council in 2013. That 17-year deal was reportedly worth $6 million a year, for a total of $102 million.

Read more: PUCO Looking Into FirstEnergy Stadium Naming Rights Deal (State House News Bureau)

 

ICYMI: 

FirstEnergy, DeWine’s office and others still far from full disclosure on HB 6

Report: Midwest states losing millions from efficiency rollbacks

Ohio's SB 52 raises profile for upcoming workshops on solar siting issues

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