FERC last week ordered FirstEnergy (NYSE: FE) to pay a $3.86 million fine and submit annual compliance monitoring reports to the agency’s audit division for the next two years detailing compliance measures and procedures the company has put in place to comply with commission regulations.
The fine and mandated annual report to FERC’s enforcement division are part of a settlement (IN23-2) between the company and FERC auditors and approved by the commission Dec. 30. Auditors determined that FirstEnergy executives had repeatedly lied when asked in 2019 and early 2020 about the company’s expenses for lobbying and governmental affairs.
A subsequent probe made public in June 2020 by the U.S. Attorney for the Southern District of Ohio found that the company funneled more than $60 million through a dark money nonprofit 501(c)(4) corporation, Generation Now, to former Ohio House Speaker Larry Householder (R) between March 2017 and March 2020 for his efforts to pass legislation subsidizing two uncompetitive FirstEnergy nuclear power plants in northern Ohio.
Householder shepherded the passage of H.B. 6 in June 2019, providing a little over $1 billion in public funding over the coming seven years. The legislation was later repealed at the request of Energy Harbor, the new owner of the power plants.
Householder and four associates were subsequently indicted on federal racketeering charges. Householder’s trial in a federal district court is set to begin later this month, though jury selection could delay the start. FirstEnergy pled guilty to wire fraud in a deferred prosecution agreement in July 2021 and agreed to pay a $230 million fine. The company has also fired several top executives, including former CEO Chuck Jones.
FERC auditors determined that not only had FirstEnergy misled the agency about the $60 million in dark money contributions for the passage of the bailout legislation, but that the company had also failed to mention that, between 2010 and January 2019, it had paid over $22 million to two small Ohio companies owned by Samuel Randazzo, a utility lawyer and long-time Ohio lobbyist who became chair of the Public Utilities Commission in 2019.
Gov. Mike DeWine appointed Randazzo Feb. 4, 2019.
Randazzo has not been charged. He resigned from the commission in November 2020, a few days after FBI agents raided his downtown Columbus condominium, leaving with several file boxes. Randazzo’s assets have been frozen.
