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    FBI subpoenaed records detail ex-PUCO chairman Sam Randazzo's influence on energy policy


    August 3, 2022 - Jessie Balmert and Laura A. Bischoff, The Columbus Dispatch

     

      No one exerted more influence over Ohio's energy policy than former top regulator Sam Randazzo, according to thousands of records subpoenaed by the FBI as part of a pay-to-play investigation involving Akron-based FirstEnergy.

      FirstEnergy admitted that it used Randazzo's influence to help the company score a $1 billion nuclear bailout for Energy Harbor's plants in northern Ohio and fend off future rate hikes.

      Randazzo had his fingers in everything from the details of House Bill 6 – the energy overhaul that included ratepayer-funded subsidies for nuclear plants – to federal policy that threatened to upend the bailout. His experience in the field made him a rarely questioned expert.

      A closer look: How federal investigators say FirstEnergy placed Ohio utility regulator Sam Randazzo in a key role

      'In a league of its own': Ohio is No.1 state when it comes to public corruption, experts say

      "(W)e already know you run the energy world," wrote Rep. Shane Wilkin, R-Hillsboro, in a March 2020 email asking Randazzo what he would change about state energy policy if he had a magic wand.

      In 2020, Randazzo used his sway to try to save Ohio's $1 billion nuclear bailout from a federal policy that threatened it. But in the end, other forces doomed it.

      Those forces included the arrests of former Ohio House Speaker Larry Householder and four others in July 2020, FirstEnergy admitting it bribed Householder and Randazzo a year later and later Randazzo resigning as chairman of the Public Utilities Commission of Ohio.

      A look back: Ohio House Speaker Larry Householder arrested in $60 million bribery case

      Bribery in Ohio: FirstEnergy charged in Ohio bribery scheme, agrees to deferred prosecution settlement for $230 million

      Householder has pleaded not guilty, and Randazzo has not been charged with any crime. Randazzo's attorney Roger Sugarman said his client didn't use his role as chairman to benefit FirstEnergy or Energy Harbor.

      Sugarman said Randazzo opposed the federal rule because it was a bad policy that likely would have increased customers' electric bills by more than $2 billion annually.

      Now, more than 2,000 records subpoenaed by federal investigators paint a picture of the influence Randazzo wielded.

      Sam Randazzo assures Ohio Gov. Mike DeWine bailout is needed

      Randazzo was a key voice in the room on energy policy, including the nuclear bailout in House Bill 6.

      About a week after the bill was introduced, DeWine invited Randazzo, Lt. Gov. Jon Husted and top aides to a "nuclear bailout bill discussion" on April 24, 2019 at the Ohio Governor's Residence.

      When DeWine questioned whether the nuclear plants needed a bailout after reading an editorial, Randazzo defended the subsidies in House Bill 6. The PUCO chairman wrote in a June 11, 2019 email: "The objective analysis I have reviewed finds that Ohio's two nuclear plants are not generating sufficient revenue to cover their costs."

      News: Powerful Ohio utilities regulator steps down following FBI search of his home

      At the time, Ohio senators were pushing for an audit to make sure the companies actually needed ratepayers' money.

      "My experience tells me that the real power of audits or other types of checks is less that (sic) one might assume," Randazzo responded to DeWine's personal email address. "But, we are supporting Senate efforts to evaluate options that move in this direction."

      One month later, DeWine signed House Bill 6 – without strict audit language to ensure the bailout was needed.

      Fighting new federal rule

      In December 2019, the Federal Energy Regulatory Commission threatened to dismantle months of work – and millions spent behind the scenes – on Ohio's $1 billion nuclear bailout.

      The federal regulator's new policy effectively penalized utilities that accepted state subsidies when those companies sold their power. Randazzo had an "update call" with Energy Harbor executives later that day.

      Shortly after, Randazzo asked Energy Harbor's executive vice president of government affairs Dave Griffing to set up a meeting with the power plants' executive chairman John Kiani and CEO John Judge on Jan. 14, 2020.

      Randazzo would tour Energy Harbor's new building and grab dinner at Crave, a popular restaurant in downtown Akron.

      "Done – send the arrangements," Randazzo replied. "Happy to get something to eat afterwards but I need to pick up the tab for whatever I order."

      The meeting's purpose was not listed in the emails, but Sugarman said it was simply a tour of the new building. Energy Harbor did not respond to a request for comment.

      In the months that followed, Randazzo worked to carve out Ohio utilities, and the nuclear bailout, from the federal rule. He successfully delayed the policy's implementation, buying Ohio companies more time.

      Randazzo's attorney said the policy was the problem, not Randazzo's actions. "Bottom line, the MOPR (minimum offer price rule) was bad for customers, a position shared by state regulators (like the PUCO with Mr. Randazzo as Chair) and FERC Commissioners alike," Sugarma

      But it ultimately didn't matter. Ohio lawmakers repealed the ratepayer-funded nuclear bailout in the months following Householder's arrest and removal as House speaker. Energy Harbor cited the federal rule as one reason they didn't want the subsidies anymore.

      Keeping track of Householder scandal

      Randazzo kept an eye on the trouble brewing around House Bill 6. On the day Householder was arrested, he sent a Cincinnati Enquirer article about the charges to his personal email. He also emailed himself a Yahoo search of videos from the arrests.

      Randazzo also emailed himself a link when the Ohio Consumers Power Alliance launched a campaign calling for his resignation in August 2020.

      News: Powerful Ohio utilities regulator steps down following FBI search of his home

      Randazzo sent himself a Cleveland.com article detailing FirstEnergy CEO Chuck Jones' firing along with two other executives, noting that they violated "several codes of conduct."

      Early on Nov. 20, 2020, Randazzo received an energy policy newsletter with a section titled "FE – Big shoe drop; PUCO Chair implicated."

      Hours later, Randazzo resigned.

      What's not included

      The PUCO provided these documents to the FBI in response to subpoenas on April 23, 2021, and May 18, 2021. The PUCO provided these records Friday to the USA TODAY Network Ohio Bureau and other publications as part of a records request.

      The PUCO is reviewing a "relatively smaller set of records" for potential trade secrets or confidential information before releasing them to reporters or explaining why they will not.

      "The PUCO is fully cooperating with the U.S. Department of Justice," a PUCO attorney wrote.

      Jessie Balmert is a reporter for the USA TODAY Network Ohio Bureau, which serves the Akron Beacon Journal, Cincinnati Enquirer, Columbus Dispatch and 18 other affiliated news organizations across Ohio.

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