Tag: Akron FirstEnergy

  • Ohio SOS gives yet another reason to make it a lot harder for voters to amend Constitution

    Ohio SOS gives yet another reason to make it a lot harder for voters to amend Constitution

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    Secretary of State Frank LaRose announces the referral of 117 cases of alleged voting and voter registration fraud stemming from the 2020 elections. Photo courtesy The Ohio Channel.

    BY:  Ohio Capital Journal

    Ohio Secretary of State Frank LaRose on Wednesday offered another rationale for making it much more difficult for voters to amend the Ohio Constitution. Now he’s saying it’s needed to fight a possible power grab like one that grew out of a massive bribery and money-laundering scandal.

    But LaRose didn’t mention in his op-ed that his name came up repeatedly in a criminal trial related to the scandal and that he appeared to be in close communication with some of its central figures.

    Nor did his office respond when asked whether LaRose ever spoke out against the corrupt utility bailout before the FBI started arresting people in July 2020.

    Slippery explanations

    The secretary of state — who is said to be eyeing a run for U.S. Senate next year — has been pushing to increase the portion of votes needed for a citizen-initiated amendment from 50% to 60%. As he and his allies have, they’ve given a shifting set of reasons for why that’s needed.

    Last November, during a lame-duck session of the legislature, LaRose and state Rep. Brian Stewart, R-Ashville, held a press conference saying that the change was necessary to prevent wanton amendments to the Ohio Constitution by monied special interests. But they didn’t point to any examples of how that had happened in the past.

    Many suspected an ulterior motive.

    LaRose sat on a Republican-dominated redistricting commission that last year ignored seven Ohio Supreme Court rulings saying that the legislative and congressional maps the commission produced violated anti-gerrymandering amendments overwhelmingly approved by Ohio voters. That prompted Maureen O’Connor, the outgoing Republican chief justice, to urge Ohioans to pass new, more-tightly written amendments this year.

    Ohio was also roiled when a highly restrictive abortion law took effect last June just after the U.S. Supreme Court overturned Roe v. Wade and horror stories poured out of abortion clinics and hospitals. An effort quickly started to get an amendment on the ballot protecting abortion rights after other protections easily passed in other states.

    But at last year’s presser, LaRose denied that his goal was to block anti-gerrymandering or abortion-rights amendments. The constitutional change he was advocating was a long-term, fundamental one that he didn’t seek to block such short-term disputes, he claimed.

    Just weeks later, however, Stewart, LaRose’s sidekick at the presser, sent a letter to his GOP colleagues in the House explaining the real reasons for making it harder for Ohioans to amend their constitution: to stop abortion-rights and anti-gerrymandering amendments that appear to be favored by strong majorities of Ohioans.

     

    [/vc_column_text][vc_raw_html]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[/vc_raw_html][vc_column_text]The attempt to rush a bill through lame duck last year failed.

    Now Stewart, LaRose and their allies are trying to pass it through Ohio’s now-unconstitutionally gerrymandered legislature. If it passes, it would put the measure requiring 60% of the vote to amend the state constitution on the ballot. And, since the vote would be under the existing rules, it would require just 50% of the vote to pass.

    Also on the pile of accusations that it’s a naked power grab is that LaRose, Stewart and their allies want to put the measure on the ballot in a low-turnout August election. They’re doing so just months after passing a bill that had LaRose’s support to eliminate such elections as costly and unnecessary — and three months before the abortion amendment is expected to hit the ballot.

    A new reason

    While he’s being accused of attempting a power grab, LaRose says he’s trying to stop them.

    On Tuesday, The Columbus Dispatch published an op-ed in which he furnished yet another reason to make it harder for voters to change the state Constitution. He cited an attempt by former House Speaker Larry Householder to pass an amendment changing the state’s term limits so Householder could stay speaker for another 16 years.

    It was part of a breathtaking scheme in which Householder and his allies took more than $61 million from Akron-based FirstEnergy and other utilities, used the money to make him speaker in January 2019, and then pass and protect a $1.3 billion ratepayer bailout that mostly went to FirstEnergy.

    Fresh off the passage of the bailout, Householder raised millions in early 2020 from FirstEnergy and AEP for his scheme that would allow him to stay longer in office. But it died with his arrest that July.

    It might seem ironic that LaRose would use a corruption scandal to gut a 1912 reform measure that was aimed at curbing corrupt, unresponsive government, but that’s what he argued. He said all it takes to change the Constitution now “is a well-funded, dishonest political campaign and a simple majority vote.”

    LaRose added that Householder planned to call his tenure-extension scheme “Ohioans for Legislative Term Limits, a deceptive name for a constitutional amendment that would more than double his term in office. It should come as no surprise that FirstEnergy Corporation, the company at the center of Householder’s racketeering scandal, agreed to bankroll the amendment campaign.”

    Significant omissions

    While he accused his opponents of “hysterical hyperbole” as he tries to make it 20% harder for voters to succeed in the already difficult process to amend the Ohio Constitution, there were some important things LaRose didn’t say in his Op-Ed.

    For starters, FirstEnergy didn’t only bankroll Householder in 2018 as the now-convicted former speaker elected a team of lieutenants who would hand him the speaker’s gavel. The utility also bankrolled LaRose to the tune of $25,000 that year as he ran for secretary of state.

    It was part of nearly $50,000 that the energy company — which signed a deferred prosecution agreement in the Householder scandal — has given LaRose, the campaign-finance tracker FollowTheMoney.org reports.

    And while LaRose is decrying the bailout now that there have been arrests and convictions, there was reason to know there was something wrong with it well before they took place.

    Insiders knew that somebody was burying Capitol Square in cash throughout the 2019 passage of House Bill 6, the corrupt utility bailout. That was especially true as FirstEnergy dumped what the FBI later determined was $36 million into a blatantly-dishonest-but-successful fight to beat back a repeal.

    Because the funds were non-disclosable 501(c)(4) dark money, it was impossible for the public to know exactly where they were coming from until the feds stepped in and used subpoenas and other special powers to find out.

    But HB 6 was such bad legislation and the campaign to stop the repeal so over-the-top that there was plenty of reason to suspect that somebody was being bought off to pass it. It was a massive corporate bailout that Householder and others were trying to officially declare a tax. Republican lawmakers who didn’t want to cast such a damaging vote described withering pressure from House leadership.

    Former friends

    LaRose’s office didn’t answer Wednesday when asked if the secretary of state ever spoke out against HB 6 before the FBI started making arrests.

    In the Cincinnati corruption trial that ran from late January to mid-March, federal prosecutors presented several communications to the jury that might indicate that LaRose was actually sympathetic to the effort to pass and protect the corrupt bailout.

    On July 23, 2019, as the repeal effort got underway, text messages flew between two prominent figures in the scandal: Matt Borges, the former Ohio Republican Party chairman who was convicted along with Householder; and Juan Cespedes, a lobbyist who pleaded guilty and cooperated with prosecutors.

    Borges told Cespedes he had received “a message from the secretary of state on the ballot-measure issue.”

    The men were hoping for help from LaRose. He’s chairman of the Ohio Ballot Board, which, along with Attorney General Dave Yost, has to approve the language of constitutional amendments before they’re circulated for the hundreds of thousands of needed voter signatures — and before they’re placed on the ballot.

    In the case of the HB 6 repeal, Yost initially sent the language back for revisions, then he and the ballot board approved it. But that wasn’t before the original 90 days opponents had to gather the signatures was whittled down to 53.

    In the end, time ran out before opponents could gather them. But at the beginning of the effort, Borges seemed to be talking to LaRose about what LaRose needed in exchange for his help.

    “LaRose is expecting us to be publicly supportive of him,” Borges said. “Apparently petitioners (for the repeal of HB 6) are going to call on him to step down from the ballot board because of ‘conflicts.’ He can be our friend in this process, so let’s be prepared to speak for him.”

    Continuing communication

    Later in the repeal fight, FirstEnergy’s two top executives discussed asking LaRose’s help with Yost. In addition to hamstringing the petition effort, supporters of the corrupt bailout wanted to have it officially declared a tax, and thus legally exempt from repeal.

    “I’ve been asked by (subsidiary FirstEnergy Solutions) to call Frank LaRose to get Frank to call Dave Yost,” Vice President Michael Dowling texted CEO Chuck Jones, according to messages put into evidence by prosecutors. “If Frank tells Yost that he believes HB 6 is a tax, Yost will come out publicly and say it, which (FirstEnergy Solutions) thinks helps with the Supreme Court. Frank is reluctant to make the call. I have a call in to Frank and I will ask him to do it.”

    LaRose may have been reluctant about making that call. But he apparently wasn’t reluctant to keep talking to the people who funded the scandal he’s now condemning and using as a reason to make it harder for voters to amend the Ohio Constitution.

    In October 2019 — shortly before the repeal effort failed — Jones sent a text to John Kiani, the chairman of the FirstEnergy subsidiary that was to receive $1 billion of the bailout. It indicated that both LaRose and Householder had been providing the FirstEnergy CEO with “private” information on the repeal effort.

    “For what it’s worth, LaRose and Householder think it’s game over,” Jones told Kiani. “But that is a private conversation unless they’ve told you the same thing. And Householder has a ‘quick fix’ anyway.”

    And then in November 2019 — just after the repeal failed — other messages indicated that LaRose wanted to cement a relationship with Kiani, the hard-charging former Enron executive whom Cespedes testified stood to make $100 million off the sale of FirstEnergy’s bailed-out nuclear and coal plants.

    Borges texted Cespedes that LaRose, “told me he wants to get to know Kiani, and I said, ‘Are you sure about that?’”

    Cespedes replied, “He will live to regret that.”[/vc_column_text][/vc_column][/vc_row]

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    MARTY SCHLADEN

    Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He’s won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.

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  • Consumer protection? New DeWine regulatory chief says most overcharges can’t be refunded

    Consumer protection? New DeWine regulatory chief says most overcharges can’t be refunded

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    By Marty Schladen and Ohio Capital Journal

    Gov. Mike DeWine’s latest appointee to lead Ohio’s scandal-plagued utility regulator last week raised concerns among some lawmakers and consumer watchdogs. She claimed that her agency has only a very limited ability to make electric companies refund billions in improper charges to ratepayers.

    There was always going to be scrutiny when Jenifer French made her first appearance last Wednesday before the Ohio Senate and Public Utilities Committee. 

    DeWine appointed her in March to chair the Public Utilities Commission of Ohio. DeWine’s first appointee, Sam Randazzo, resigned in November after the public learned that a lobbyist believed to be Randazzo got a $4.3 million payment from Akron’s FirstEnergy just as Randazzo took over as Ohio’s top utility regulator. 

    For its part, FirstEnergy last year fired its top executives after discovering the payment to Randazzo — and after federal prosecutors accused it of being at the center of a $61 million bribery scandal that resulted in a $1.3 billion bailout that greatly benefited FirstEnergy and associated companies.

    French, a former Franklin County Common Pleas judge, told the Senate committee that she wanted to use her background to restore public confidence in the agency. 

    But Sen. Mark Romanchuk, R-Ontario, wanted to get down to specifics.

    “You mentioned something about public trust and public trust, I believe, is fixing this refund problem,” he said. “Since 2009, there has been about about $1.5 billion that has been deemed improper at the court and that money was not refundable back to the ratepayers — the people who paid that money.”

    Romanchuk was referring to charges that the PUCO allowed, but that the Ohio Supreme Court later struck down as illegal. 

    The funds include $456 million FirstEnergy got, supposedly to modernize the utility grid. But at least some of the money was placed into a pool that FirstEnergy’s out-of-state utilities could borrow from. 

    Allowing electric companies to pocket improper proceeds from ratepayers is not a business-friendly practice, Romanchuk told French.

    “That was $1.5 billion that was pulled out of our economy, and I would argue that’s not a good thing as we compete with other states and other countries around the world,” he said.

    French replied, in essence, that while her agency has the power to allow rate increases, it has scant power to get the money back when the increases are ruled to be illegal. 

    At issue is why the PUCO, when it grants rate increases, doesn’t routinely say they’ll have to be refunded if the courts strike them down or if the utilities don’t use the money as they promise.

    “My understanding is that there are very limited circumstances in which the PUCO can set rates that are capable of being refunded at the end,” French said. “For the most part, it’s the call of the legislature.”

    Romanchuk disputed that. He pointed to a 2019 Ohio Supreme Court decision saying that if the PUCO had built a refund mechanism into the “rider” that allowed FirstEnergy to collect $456 million, it could have forced the company to pay it back when an audit showed the money wasn’t used for its stated purpose.

    The decision said that a 1953 law “bars any refund of recovered rates unless the tariff applicable to those rates sets forth a refund mechanism… FirstEnergy’s tariffs for the modernization charge, however, contain no refund mechanism.”

    French said she was unfamiliar with that decision. 

    A year before, the court said something similar in a case in which FirstEnergy was allowed to make yet another upcharge. In that case, the PUCO was asking that the company refund $43 million in “imprudent” purchases of renewable energy credits.

    Referring back to its 1957 Keco Industries v Cincinnati decision, the court said that refunds would amount to illegal “retroactive ratemaking” because the fees the utilities ended up collecting would differ from those filed in the original tariffs. In other words, once a rate is legally set, the PUCO can’t change it willy-nilly, the decision said.

    But the 2018 decision additionally said this: “FirstEnergy also asserts that the plain language of (the 1953 law) bars any refund in this case because the ($43 million) rider did not specify a refund process. We agree.”

    So why wouldn’t refunds be legal under Keco if a provision for them is a part of the original order?

    French said it was her understanding of the Keco case that unless a rate increase was of a special type — a “reconciled rider” — the only way refunds can happen is if the General Assembly changes the law.

    “If it is not provided for in a law… or a reconciled rider, refunds would require a statutory change,” she said. “I think the Supreme Court was very clear about that. If there are opportunities for us by statute to be permitted to determine whether a rider is refundable or not, certainly that is something we would look into.”

    That rationale can be hard to understand. In emails, PUCO spokesman Matt Schilling was asked why his agency doesn’t routinely make a refund mechanism part of any rate increase.

    He said the decisions to which French and Romanchuk were referring relied on two separate authorities. French was talking about the Keco decision, while Romanchuk was talking about a decision based on the 1953 statute, Ohio Revised Code 4905.32.

    Neither, however, uses the term “rider” and none of the subsequent Supreme Court decisions Schilling provided contains the term “reconciled rider.”

    The state’s official consumer watchdog, the Ohio Consumers’ Counsel, said nothing stops the PUCO from building refund mechanisms into rate hikes that are later ruled to be unlawful.

     “In the words of former Supreme Court Justice Paul Pfeifer, it ‘boggles the mind’ that Ohio consumers are denied refunds of utility charges after the court finds a PUCO order to be improper,” spokesman J.P. Blackwood said in an email. He added that PUCO commissioners seem to be substituting their own judgement for that of the Supreme Court. 

    “That PUCO commissioners have protected utilities more than consumers by not making certain charges refundable, further shows that the selection process for PUCO commissioners needs reform,” he said. 

    Last Wednesday, Sen. Teresa Fedor, D-Toledo, put those sentiments more succinctly.

    “It’s time for the board members of the PUCO to start siding with the citizens of Ohio,” she said.