Solar panels in a grassy field.
A small community solar array, designed to support grazing and adjacent farming, in Brunswick, Maine. Credit: ReVision Energy

This monthly newsletter provides updates on Ohio’s ongoing utility corruption scandal. Was this forwarded to you? Click here to subscribe.

Ohio utility regulators will continue to consider four FirstEnergy cases related to HB 6 separately, despite requests by the utility, customer advocates, and others to combine the cases. Meanwhile, intervenors say the timeline set in two of the cases puts them at a disadvantage as they struggle to keep up with several hundred thousand pages of discovery documents.

Other recent developments in Ohio’s ongoing utility corruption scandal include: 

  • Text messages show Gov. Mike DeWine played a more active role in soliciting money from FirstEnergy than was previously known.
  • A former FirstEnergy executive plans to call both DeWine and Lt. Gov. Jon Husted as witnesses at his criminal trial.
  • Former Ohio House Speaker Larry Householder is advancing a new argument on appeal from his criminal conviction in federal court last year.

Piecemeal approach continues at PUCO

The Public Utilities Commission of Ohio is sticking with a piecemeal approach to four HB 6-related cases despite requests earlier this month from the company and challengers asking for different degrees of consolidation.

FirstEnergy wanted issues in three HB 6 cases to be considered together next year, and would have split a fourth case over whether the company improperly used ratepayer money to subsidize affiliated businesses, including FirstEnergy Solutions’ unregulated coal and nuclear plant operations.

The Office of the Ohio Consumers’ Counsel, Ohio Manufacturers’ Association Energy Group and several other parties urged the PUCO to consolidate all four HB 6 cases. In addition to the corporate separation case, one case requires FirstEnergy’s utilities to show ratepayer money was not used for charitable or political purposes, and the other two deal with the company’s use of funds from two riders. 

Regulators stayed all four cases in mid-2022 after a request from the federal prosecutor’s office. Administrative Law Judge Jacky St. John ruled last week that the commission would not order further consolidation beyond its combination of the two rider cases when the stay was lifted in late February. 

“The Commission is vested with broad discretion to manage its dockets,” she wrote, adding that more delay was not warranted.

Critics see the decision not to combine the cases as a missed opportunity for a big-picture review of FirstEnergy’s operations and governance in the wake of HB 6.

“I don’t understand the logic,” said Ashley Brown, a former PUCO commissioner. “It’s hard to find any public policy or private interest not to consolidate.”

Multiple cases also require duplicative efforts and increase legal costs. “The commission is making us try HB 6 cases multiple times,” said Kim Bojko, an attorney for the Ohio Manufacturers’ Association Energy Group. 

The PUCO “seems like it’s still piecemealing it and kicking some of the can down the road, while trying to fast-track the rest,” said Dave Anderson, policy and communications manager for the Energy and Policy Institute. He noted the commission’s limited approach to addressing the HB 6 case began under former PUCO chair Sam Randazzo, who died from an apparent suicide this spring after criminal indictments in federal and state courts, plus charges of legal ethics violations.

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A ‘punitive’ schedule

The PUCO set schedules in its June 21 orders which call for testimony in the rider cases to be filed in early August, with an evidentiary hearing set to start later that month. 

Testimony in the corporate separation case must be filed in September, with a hearing to start in October. The PUCO also said it would move ahead in that case without an additional audit on the HB 6-related issues. A 2021 report by Daymark Energy Advisors found no major violations of corporate separation, but noted the company hadn’t gotten numerous documents for the time period relevant to HB 6. 

An independent audit still has not been completed in the political and charitable spending case. That case doesn’t have a hearing date yet. 

Several intervenors have raised concerns about the pace, noting that it’s still unclear when pre-hearing fact-finding will wrap up. The commission put that process on hold for a year and a half after federal prosecutors asked for a pause in state regulators’ investigations as they pursued criminal cases related to HB 6.

FirstEnergy still has not produced all the documents parties in the four cases asked for nearly three years ago, because the PUCO didn’t require the company to comply with earlier document requests when it stayed the cases.

From February through mid-June of this year, FirstEnergy produced roughly 725,000 pages of documents. “We just got another 500 pages last week,” with more still to come, Bojko said. Yet now she and other parties will have to file witnesses’ testimony in roughly six weeks without knowing whether they’ll have all the documents.

“It’s punitive,” Bojko said, adding that lawyers for intervening parties are still scrambling to try to review the materials they’ve recently gotten. In her view, factors that frustrate intervenors’ ability to prepare their cases will work to FirstEnergy’s advantage.

Maureen Willis, agency director for the Office of the Ohio Consumers’ Counsel, said the office is evaluating the PUCO’s approach to the cases. 

“OCC will continue to advocate for a fair process that allows all the facts to come out,” Willis said.

FirstEnergy spokesperson Jennifer Young declined to comment due to the ongoing nature of the proceedings.

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Spotlight on DeWine and Husted

Newly revealed documents show Gov. DeWine played a larger role in soliciting money from FirstEnergy executives than was previously known.

FirstEnergy and its affiliates gave roughly $4 million to dark money groups supporting DeWine and Husted’s 2018 campaigns. Less than a month before the election, DeWine texted Chuck Jones, then CEO of FirstEnergy, to set up a call. Three days later, Mike Dowling, then a FirstEnergy vice president, texted Jones to let DeWine know $500,000 was going to a dark money group called State Solutions.

Other texts recently obtained by journalists show Husted trading statements about Ohio energy policy with Dowling in the summer of 2018. Documents produced earlier show Husted also performed “battlefield triage” to assure the appointment of Randazzo to chair the PUCO.

DeWine claimed he didn’t remember the call. Spokesperson Dan Tierney told the Energy News Network the texts “all document legal campaign fundraising and independent expenditures,” which have been previously reported. “The Governor follows all applicable campaign finance laws,” he added. Husted spokesperson Hayley Carducci did not respond to Energy News Network’s request for comment.

The newly produced documents don’t show a bribe or quid pro quo, and neither DeWine nor Husted has been named as a defendant in any criminal or civil cases relating to HB 6.

However, the timing so close to the election raises questions, Anderson said, because DeWine’s campaign staff likely knew FirstEnergy executives and the company’s political action committee would already have reached their limits for direct campaign contributions. Under federal campaign finance law, candidates are not supposed to coordinate fundraising or other activities with groups that make so-called independent expenditures in political races.

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On the witness list

Dowling, the former FirstEnergy vice president, listed both DeWine and Husted as potential witnesses in a June 18 filing in the state of Ohio’s criminal case against him, Jones and two companies that were controlled by Randazzo. The two also have received subpoenas in civil cases filed by FirstEnergy shareholders.

Others on Dowling’s witness list include former American Electric Power executives Nicholas Akins and Tom Froehle. AEP holds the largest interest among Ohio electric utilities in the two 1950s coal plants that ratepayers continue to subsidize as a result of HB 6. An estimate by RunnerStone for the Ohio Manufacturers’ Association found Ohioans will pay nearly $1 billion for those subsidies through 2030.

Jones was also named as a defendant in the case against Dowling, along with Randazzo and two companies he controlled before his death. The state is still pursuing charges against those companies, said Steve Irwin, press secretary for Ohio Attorney General Dave Yost.

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Householder and Borges appeals

Former Ohio House Speaker Larry Householder wants to add an argument to his appeal of a criminal conviction in federal court last year. A June 11 filing argues Judge Timothy Black erred in instructing Householder not to talk about his ongoing testimony while he was still under oath during an overnight break on March 1 last year. Householder’s lawyers did not object to the instruction, and the judge told Householder he could otherwise talk with his attorneys.

The government has objected to allowing the extra argument, first raised months after Householder’s initial brief of more than 16,000 words was filed in late February. Even if the court doesn’t allow the extra argument, a June 21 filing said the government still needs another four weeks to file its response.

Briefing in lobbyist Matt Borges’ appeal from his criminal conviction in last year’s federal trial should wrap up by the end of this month, unless his lawyers ask for more time to reply to the federal government’s brief.

Householder is currently serving a 20-year sentence, and Borges is serving a five-year sentence. Their appeals are pending before the Sixth Circuit Court of Appeals.

Kathi is the author of 25 books and more than 600 articles, and writes often on science and policy issues. In addition to her journalism career, Kathi is an alumna of Harvard Law School and has spent 15 years practicing law. She is a member of the Society of Environmental Journalists and the National Association of Science Writers. Kathi covers the state of Ohio.