Emails show ex-PUCO Chair Sam Randazzo fought HB6 repeal, reluctantly ordered FirstEnergy probe

Sam Randazzo

Newly released emails show how Sam Randazzo, while chairman of the Public Utilities Commission of Ohio, fought efforts to repeal the scandal-ridden House Bill 6 and was pushed by negative press into ordering FirstEnergy to investigate itself for potential misuse of customer funds. (Photo from Public Utilities Commission of Ohio)

COLUMBUS, Ohio -- Former Public Utilities Commission of Ohio Chair Sam Randazzo worked behind the scenes to hinder attempts to fully repeal House Bill 6 in the months before he resigned following an FBI raid of his home, newly released emails show.

Randazzo, whom FirstEnergy admitted last year to bribing, also waited weeks after the HB6 scandal broke for the PUCO to probe the Akron-based utility’s spending. The emails, released by the PUCO after the FBI subpoenaed the records last year, show Randazzo only grudgingly called for limited action -- asking FirstEnergy to investigate itself over whether it misspent any customer money -- in response to negative press.

He also sought to influence the public and lawmakers’ opinions in favor of preserving HB6 even after August 2020 when federal prosecutors announced charges against ex-Ohio House Speaker Larry Householder and others, accusing them of using $60 million in FirstEnergy bribe money to pass HB6. The law, passed in July 2019, gave a $1 billion-plus ratepayer bailout, among other things, to a then-subsidiary of FirstEnergy.

The thousands of pages of emails, taken together, portray Randazzo as self-assured, defiant, and haughty at times. The emails range from the spring of 2019, as HB6 the Ohio General Assembly debated the legislation, to Nov. 16, 2020 -- the day the FBI raided Randazzo’s Columbus home.

More emails will be released at a later date, as PUCO staff continues to review its records, according to a letter sent to cleveland.com by PUCO Deputy Legal Director Donald Leming.

Randazzo, a longtime utilities lawyer who helped write HB6, has so far not been charged with any criminal wrongdoing. However, he was added last year as a defendant in a civil lawsuit filed by Ohio Attorney General Dave Yost. The suit accuses Randazzo of engaging in extortion, money laundering, coercion, intimidation and an attempted coverup.

When Yost’s initially filed his lawsuit in September of 2020, Randazzo sent a news article about the suit to his wife, Carol Farmer, adding, “People are making this too hard.....”

Farmer replied: “Wow. Will more individuals be named?”

Involvement in the repeal process

On July 29, 2020, Randazzo wrote Gov. Mike DeWine’s policy director, Anne Vogel, urging the governor and legislative leaders to suggest a “substantive fix” to “manage the political chaos and policy degradation” following Householder’s arrest eight days prior.

Randazzo suggested to Vogel that using the PUCO’s “existing audit process, perhaps with some additional details added, seems to me to be the quickest and best way to responsibly manage the risks ahead.”

He added that the process should be “consistent” with the principles behind HB6, which included that the two nuclear plants receiving bailouts shouldn’t be closed and that HB6′s gutting of Ohio’s energy-efficiency and renewable-energy mandates for utilities should not be changed.

“The longer the vacuum is present, it will grow as more details about the FBI investigation roll out,” Randazzo wrote, adding that Vogel should “be careful” with anti-HB6 arguments being advanced by the Ohio Manufacturers Association, a prominent opponent of the energy law.

On Aug. 31, 2020, Randazzo sent a spreadsheet to his own private email titled “Repeal HB6 scenarios.”

Another email lays out what appears to be potential alternatives to repealing HB6, including making optional the nuclear bailout charge and charges to subsidize two coal power plants. Other potential ideas laid out included explicitly ensuring there’s a “financial need” for the bailout money and repealing a policy that allowed FirstEnergy to collect hundreds of millions of dollars more from customers.

Randazzo testified in September 2020 before an Ohio Senate committee, offering technical criticisms about legislation to repeal HB6 and suggesting revisions -- or, as he put it, “unwinding challenges” -- to the law in light of the scandal.

Eventually, state lawmakers voted to repeal the nuclear bailout entirely, in part because the nuclear plant owner came to see the money as a liability because of a federal regulatory ruling. However, some parts of HB6, including the coal-plant subsidies and gutting the green-energy mandates, remain in force.

Reluctant auditing

Though Randazzo raised the idea of using PUCO’s audit process in late July, the commission hadn’t taken any such action by Sept. 9, when the Ohio Consumers’ Counsel, a utility customer watchdog, asked the PUCO to order an audit into whether FirstEnergy wrongly spent customer money on HB6 lobbying.

That same day, Randazzo scoffed at an editorial by ex-PUCO Chair Ashley Brown calling for the commission to launch a “transparent, detailed financial audit” of FirstEnergy, emailing a staffer an article Brown wrote in 1992 “in which he argues that sunshine laws do not improve the quality of regulatory decision making or decisions.”

But by Sept. 15, after being sent news headlines about the PUCO’s lack of action, Randazzo wrote staffers, “So, we need to do something to respond to OCC’s request for an investigation.”

Randazzo added about half an hour later: “We could, on our own initiative, issue a show cause order to FE (FirstEnergy) directing FE to demonstrate that no costs associated with HB 6 have been included in any riders or base rates.”

That same day, Greg Price, a senior PUCO attorney examiner -- a position similar to a judge -- issued an order that did just that: letting FirstEnergy conduct its own investigation into whether it spent customer money on HB6 lobbying.

A few weeks later, FirstEnergy reported that it didn’t find any such spending, though a federal audit released earlier this month found the company did improperly use ratepayer money for HB6 lobbying.

In October 2020, the PUCO also ordered an audit into whether FirstEnergy violated state corporate separation rules. However, as Randazzo emphasized to PUCO public affairs director Matt Schilling in a Nov. 5, 2020 email, such requirements “are not designed to address politics or lobbying (coordinated or otherwise) except as cost allocation may be involved.” The audit, released last September, found no major violations of corporate separation rules.

The PUCO ordered two additional audits involving FirstEnergy after Randazzo’s departure. One of the audits found no evidence that millions that FirstEnergy collected from ratepayers for grid modernization was used for its intended purpose. The second audit, into FirstEnergy’s payments to Randazzo, has been placed on hold pending the outcome of the state and federal HB6 lawsuits.

Before the September 2020 Senate hearing, Randazzo sought input on his testimony from others at the PUCO, including Price. Another document shows Price was invited to participate in a policy discussion about HB6 on May 20, 2019, as Householder and others were working to get enough votes for HB6 to pass the Ohio House, which it did on May 29.

It’s unclear why Price, who has ruled against efforts to widen the investigation into FirstEnergy, would be involved with policy discussions about HB6.

‘Educate and inform’ critics

In the emails, Randazzo repeatedly indicated frustration about the criticism aimed at HB6, suggesting that reporters and the public simply didn’t understand enough about the law.

On July 29, 2020 -- the same day he wrote DeWine’s policy director -- Randazzo emailed staffers that he was “regularly disappointed and frustrated by reporters, legislators, and lobbyists who rely on talking points to establish the content of legislation.” He then shared his own Q&A-style list of pro-HB6 talking points.

“We have an opportunity to educate and inform in ways that can help to ...facilitate more accurate reporting,” Randazzo wrote.

PUCO adviser Maura McClelland sympathetically replied with a suggestion that the PUCO create a “Get The Facts: HB6″ section on its website.

Randazzo then suggested sending out the pro-HB6 Q&A that day. But Scott Elisar, the PUCO’s legislative and policy director, asked that “maybe we talk about this internally before we move forward with any publications or comments.”

Cleveland.com politics reporters Laura Hancock and Andrew J. Tobias contributed to this story.

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