Powerful Ohio utilities regulator steps down following FBI search of his home
Ohio's top utilities regulator resigned Friday, capping a tumultuous week that started when the FBI searched his home and ended with a letter to Gov. Mike DeWine saying he was leaving immediately.
"I regret that I must step away but it is the right and necessary thing to do," Sam Randazzo, the powerful chairman of the Public Utilities Commission of Ohio, said in his resignation letter.
Randazzo's week began when the FBI searched his German Village home on Monday, removing boxes of material. The FBI has not said why they searched Randazzo's home.
On Wednesday, Randazzo missed the PUCO meeting. The following day, the Akron utility company FirstEnergy filed regulatory paperwork that appeared to link Randazzo with the firing of senior FirstEnergy executives who have been caught up in a $61 million statehouse bribery and racketeering scandal.
The utility reported a $4 million consulting payment with apparent ties to a state regulator. The payment looks to be at the heart of why FirstEnergy executives, including Chief Executive Chuck Jones, were fired last month.
The FirstEnergy filing with the Securities and Exchange Commission did not identify the state regulator beyond noting that the person "subsequently was appointed to a full-time role as an Ohio government official directly involved in regulating the Ohio companies, including with respect to distribution rates."
In his resignation note, however, Randazzo referenced the FirstEnergy report along with the FBI search.
"The impression left by the FBI raid on our home, the statement included in FirstEnergy Corp.'s filing with the Securities and Exchange Commission yesterday and the accompanying publicity will, right or wrong, fuel suspicions about and controversy over decisions I may render in my current capacity," Randazzo said in his letter to DeWine.
"In present times, when you, good sir, are valiantly battling to save Ohioans from the surging attack of COVID-19, there is no room or time for me to be a distraction."
DeWine on Friday thanked Randazzo for his work at PUCO.
"He has done very, very good work as chair," DeWine said. "I appreciate that very, very much. He indicated to me that he felt that in regard to recent events that have occurred, the FBI search of his home coupled with the SEC filing yesterday, that he would, going forward, be a distraction from the work of the PUCO and felt that this was the best thing for him to do.”
The PUCO chair is one of the most powerful positions in state government, able to influence regulation impacting utility profits and rates charged to customers. As PUCO chair, Randazzo, a longtime utility attorney and lobbyist before the appointment, also was chair of the Ohio Power Siting Board, which has oversight approval for new electric-generating facilities.
PUCO Vice Chairman M. Beth Trombold will serve as acting PUCO chairwoman.
The firings at FirstEnergy are linked to the ongoing federal investigation that led to the arrest this summer of then-Ohio House Speaker Larry Householder and four others. FirstEnergy provided some of $61 million that is behind the scandal.
The bribery scheme was tied to House Bill 6, legislation passed in the summer of 2019 that provides a nearly $1 billion bailout of the state's two aging nuclear power plants now owned by a former FirstEnergy subsidiary called Energy Harbor. FirstEnergy pushed for the bill's passage.
Since the arrests of Householder and the others, legislators have been debating whether to repeal and replace the law.
Randazzo spent the bulk of his resignation letter recounting his efforts to improve the agency.
"Since being appointed by you, much has been accomplished inside the PUCO to shed a dysfunctional Chair-centric operating system and to transparently render PUCO decisions based on the law, good engineering, good accounting and, of course, the public interest," he wrote.
He said his work as chairman has put the PUCO and the Siting Board "on a better foundation to serve the public interest."
The Ohio Consumers Counsel Bruce Weston used Randazzo's resignation to call for change in how the five-member commission is chosen.
"Utility consumers may think the regulatory system is rigged against them," he said. "That concern is understandable. Until today, a majority of commissioners, three of five, have worked for utilities that the PUCO regulates."
Environmental groups, which opposed Randazzo's selection as chairman based on comments he's made about renewable energy and those FirstEnergy connections, called on the state to adopt adopt a new energy policy that is not clouded by corruption, reduces pollution and builds the economy.
"Sam Randazzo’s ties to FirstEnergy influenced decision after decision at the PUCO and sabotaged the growth of Ohio’s clean energy future," said Rachel Belz, director of Ohio Consumers Power Alliance and executive director of Ohio Citizen Action.
"He was out of touch with what Ohioans want and did a great disservice to our state’s energy consumers. We deserve better."