Editorial: PUCO should not have paused its internal HB 6 probes at federal prosecutor’s request

A recent editorial by the Cleveland Plain Dealer:

The Public Utilities Commission of Ohio is stopping for at least six months its investigations of the FirstEnergy Corp./House Bill 6 scandal at the request of the U.S. attorney for Southern Ohio, Kenneth L. Parker, whose office will be prosecuting criminal charges tied to the alleged $61 million corruption and bribery scandal. Parker told the PUCO he’s concerned the commission’s probes might interfere with the federal investigation.

But nearly 25 months after federal indictments were handed down in the case, the apparently ongoing federal criminal probe should not exclude state-level civil investigations into whether ratepayers were penalized or utility regulation compromised. The two are aimed at different things. A state regulatory agency should not be impeded in doing its statutory duty on behalf of state ratepayers and state taxpayers, simply because a federal prosecutor finds its probes inconvenient.

That’s especially so, since the PUCO — led by an appointee of Gov. Mike DeWine — for too long dragged its feet on launching internal investigations of actions that might have improperly benefited FirstEnergy or added pro-utility elements to the HB 6 nuclear and coal bailout bill.

HB 6′s nuclear bailout provisions, aimed at helping the then-FirstEnergy subsidiary operating Ohio’s two nuclear plants, were repealed last year. The nuclear subsidiary had emerged from bankruptcy as an independent firm, Energy Harbor, and announced it didn’t need the bailout anymore.

However, HB 6′s ratepayer subsidies for two coal plants, one in Indiana, continue, as do some other pro-utility provisions. According to the Ohio Office of Consumers’ Counsel, the coal subsidy alone has already cost Ohio ratepayers nearly $178 million.

That’s just one example for why it’s so critical that the PUCO internal investigations not be paused for six months or more.

Another are the political implications, with DeWine facing re-election Nov. 8, of failing to push ahead with probes that concern the integrity of the PUCO itself, under leadership of its now-resigned former Chair Sam Randazzo, whom DeWine named to the job in early 2019. HB 6 passed the General Assembly on July 23, 2019, and DeWine signed it into law the same day.

According to the Justice Department, FirstEnergy admitted, in a deferred prosecution agreement, paying Randazzo $4.3 million “through his consulting company in return for … performing official action in his capacity as PUCO chairman to further FirstEnergy Corp.’s interests relating to passage of nuclear legislation and other specific… legislative and regulatory priorities.” Other disclosures suggest that the PUCO under Randazzo may have acted improperly, including during drafting of HB 6, to benefit FirstEnergy.

That magnifies the PUCO’s duty to investigate itself, including any improper actions it may have taken — and what may have prompted them.

Randazzo resigned as PUCO chair in November 2020 after an FBI search of his Columbus residence. Neither Randazzo nor any others beyond the originally indicted defendants have been charged in the case.

Indicted 25 months ago this coming Monday, at the end of July 2020, and awaiting trial are former Ohio House Speaker Larry Householder, a Perry County Republican, and former Republican State Chair Matt Borges. They are expected to go on trial in early 2023, facing charges which Parker’s office will prosecute. Householder and Borges are presumed innocent unless proven guilty. Two other defendants in the case have pleaded guilty, as has an organization known as Generation Now, which promoted HB 6 and which Householder allegedly controlled. A sixth defendant died by suicide.

The Akron utility, which owns the Illuminating, Ohio Edison, and Toledo Edison companies, admitted in a 49-page deferred prosecution settlement agreement that it had paid more than $59 million to Generation Now.

Unless extended, the freeze on the PUCO probes would presumably end in February 2023 – three months after Ohioans will have elected or re-elected statewide executive officers and state legislators.

Civil and criminal investigations are not mutually exclusive.

Ohioans should be concerned that a federal prosecutor unaccountable to the voters even asked a state regulatory agency charged with guarding the public’s interest to lay off important internal investigations aimed at achieving transparency and ratepayer justice. And they should be even more dismayed that a state regulatory agency that answers to Ohio taxpayers, and which Ohio law charges with guarding their interests — a regulatory agency that embarked on its internal investigations reluctantly and only under public pressure — has knuckled under so readily.

— Cleveland Plain Dealer, August 26, 2022