One year into his first term, Ohio’s top utility regulator, Samuel Randazzo, has signaled that winning approval to build and operate wind and solar projects in the state could be even more difficult in the future.
At the Public Utilities Commission of Ohio and the Ohio Power Siting Board, which Randazzo also chairs, recent decisions have blocked a new solar development and imposed new restrictions on wind energy — moves consistent with Randazzo’s longtime criticism of renewables as a registered lobbyist and lawyer representing heavy industry before the utilities commission.
Also, the commission is now defending Ohio’s decision to subsidize coal and nuclear power plants in a filing before the Federal Energy Regulatory Commission — an about-face from its stance in 2017 opposing a federal bailout of old coal and nuclear plants.
Gov. Mike DeWine’s 2019 appointment of Randazzo, a veteran energy lawyer and lobbyist, followed a rapid and opaque approval process that overlooked two of Randazzo’s ongoing small consulting companies, both of which have done business with FirstEnergy subsidiary FirstEnergy Solutions, (now Energy Harbor) federal bankruptcy records show.
Randazzo declined an interview request to comment on the companies or to elucidate what he sees as the PUCO’s mission.
Ohio Consumers’ Counsel Bruce Weston, the state’s voice for residential utility consumers, has been pushing to reform the nomination process for the PUCO, noting that the majority of commission members are either former employees of power companies or have represented them.
And while Randazzo has not always been at odds with consumer advocates, his long opposition to renewable energy is making its mark in Ohio regulatory decisions.
A long hostility to clean energy
Randazzo told state lawmakers during his 2019 confirmation hearing that as a commissioner he would have no view for or against any particular technology — despite a pattern of publicly criticizing renewable energy.
As chair of the Public Utilities Commission, he testified before lawmakers last year on Ohio House Bill 6, which authorized subsidies for nuclear and coal generation but basically gutted the state’s renewable energy and energy efficiency standards. His comments stressed the cost of the standards but not their benefits.
In his introduction to the February 2018 report on Ohio utility rate plans prepared for the Industrial Energy Users-Ohio, Randazzo characterized renewable energy as unreliable and government mandates as a waste of money.
“Despite the obvious reliability-related problems created by deploying intermittent (don’t show up for work) and non-dispatchable (can’t be made to show up for work) generating technologies, government … continues to spend taxpayers’ and customers’ money to fund subsidies for this purpose,” he wrote.
In a 2012 speech at an annual energy conference in Akron, sponsored in part by FirstEnergy, Randazzo joked that state rules requiring utilities to sell or generate a percentage of power from renewable or advanced technologies were equivalent to requiring airlines to use hot air balloons for a percentage of their flights.
But in front of lawmakers preparing to confirm his appointment to the utilities commission in April of last year, Randazzo explained that he had represented his clients’ interests and that as chair of the commission he would have only one client: Ohio.
He also mentioned that he anticipated becoming a resource to lawmakers, who are intent on rewriting Ohio’s utility and energy laws.
Emails obtained in an open records request by the Energy and Policy Institute, a watchdog group supporting renewable energy, revealed that Randazzo has worked closely with William Seitz, a Cincinnati Republican lawmaker who has tried for years to abolish or limit Ohio’s renewable energy and efficiency standards, at times helping Seitz and others behind the scenes to craft legislation.
Randazzo has stated his involvement in the development of legislation is a positive attribute. In the resume accompanying his application for a seat on the utilities commission, he wrote, “Before entering and while in private practice, I have been significantly involved in most major energy or communications legislation that has been considered or enacted by the Ohio General Assembly.”
On the regulatory front, Randazzo has represented groups seeking to block wind farm development.
Long known for his efforts to negotiate exclusive deals for heavy industry in utility rate cases, Randazzo’s career as a lobbyist is not as well known. His years of lobbying the legislature and governor for clients reveal a seasoned professional familiar with policy making and lawmaking from the inside.
And it is that experience that most worries environmentalists and renewable energy advocates.
Records maintained by the Ohio Office of the Legislative Inspector General show that over the last 10 years Randazzo has registered as a lobbyist not only for the Industrial Energy Users of Ohio but also for Greenwich Neighbors United, a group opposing wind farms; for the Ohio Gas Co., a gas utility in northwest Ohio serving 48,000 customers; and for Vectren Corp. and one of its predecessors, Indiana Energy. Vectren is a gas and electric utility based in Evansville, Indiana that delivers gas to Ohio customers.
An analysis of Randazzo’s campaign contributions by the National Institute on Money in Politics shows that he contributed more than $282,000 from 1997 through 2018. Those funds went to more than 150 candidates and four campaign organizations — more money contributed to political campaigns than any other current member of the utilities commission.
Although Randazzo described himself as an independent in his commission application, the lion’s share of his contributions — $192,181 — went to Republican candidates or organizations. Of that amount, nearly $39,000 went to GOP campaign organizations. Less than $36,000 of his giving during the 21-year period went to Democratic candidates or organizations.
Franklin County Board of Elections records show Randazzo as neither a Democrat nor a Republican but as unaffiliated.
A fast approval
Following DeWine’s election in November 2018, Randazzo’s ascendance to chair of the Public Utilities Commission was a quick process.
Randazzo retired from his law firm on Dec. 31, 2018. He filed his application for the PUCO 17 days later and was appointed chair on Feb. 4, the same day his predecessor, Asim Haque, announced he was resigning from the commission.
During his confirmation hearing on April 2, 2019, before the Senate Energy and Public Utilities Committee, Randazzo told lawmakers that the DeWine administration had asked him to consider applying and that he had been planning to retire.
Appointments to the PUCO are vetted with a system created nearly 40 years ago with the intention of making the process less political and more open.
Applicants are first screened by a 12-member nominating council, which privately interviews those it decides are the most qualified and then publicly votes on each of them. The names of the four candidates receiving the most votes are sent to the governor, who has a month to make the appointment or ask for a second set of four names.
Lawmakers created the nominating council as a reform in 1982 to defeat a petition drive that would have required commissioners to run for election. The council was supposed to decrease the hidden influence of utilities and political parties in the appointment process and assure that commissioners were qualified. Traditionally, the governor had chosen PUCO members without an external review.
Today, the nominating council includes utility lobbyists; members of the governor’s cabinet; and representatives of the legislature, labor, business, the elderly, the Ohio Bar, the Ohio Municipal League, and the state boards for accountancy and for engineering. There is one consumer advocate, as required by statute.
The current nominating council chair, Michael Koren of Columbus-based MJK Consulting, is a longtime lobbyist who has given nearly $127,000 to political campaigns, mostly Republican, in the last 19 years. Koren has lobbied for FirstEnergy, Columbia Gas of Ohio, and Boich Companies, a company with coal mining interests whose owners make significant contributions to conservative interests.
One other member of the nominating council with a record of significant contributions to political campaigns is Virginia Ragan, an heiress to Ohio-based industrial packaging manufacturer Greif, Inc. Often referred to as Ohio’s top Republican contributor, Ragan has given more than $2.9 million to state, federal and local political campaigns over the last 22 years. Most of it, nearly $2.8 million, went to GOP campaigns and candidates. Ragan has represented the Ohio Department of Aging on the nominating council since 2013.
Randazzo sat on the nominating council for 10 years, representing the speaker of the House of Representatives. He stepped down in order to apply for his PUCO seat just before the final application deadline on Jan. 17, 2019.
Following closed-door interviews, nominating council members voted unanimously for Randazzo on Jan. 31, making him the top candidate of the four sent to DeWine.
While the governor had a month to make the appointment, he chose Randazzo four days after receiving the names, despite frantic lobbying efforts in opposition. Haque, who was chair of the PUCO at the time, had announced his resignation six hours earlier.
DeWine would later overlook the second-highest vote recipient, Gene Krebs, a former state Rep. and former chair of the Ohio Consumers’ Counsel governing board. When a second vacancy opened on the PUCO, the governor opted instead for former state appellate judge Dennis Deters, who was third on the nominating council’s list.
DeWine also skipped over finalist Bryce McKenney, an attorney at the consumers’ counsel at the time. Both Krebs and McKenney are Republicans.
By law, the five-member commission can have no more than three members of the same political party. Currently, the commission includes two Republicans and two independents. Lawrence Friedeman, the lone Democrat, is an attorney with 20 years’ experience representing competitive gas and electric suppliers. He was reappointed by DeWine on Feb. 6 to a five-year term.
Even before the nominating council met to choose Randazzo, the consumers’ counsel announced it would seek legislative reform of the nominating council process in order to reduce utility influence.
“In 1982 a new law was advertised as a reform of the process for appointing PUCO commissioners,” said Consumers’ Counsel Bruce Weston. “Today, nearly 40 years later, it is the alleged reform law that needs to be reformed.
“The appointment process has resulted in a PUCO where three of the five current commissioners — a majority — have previously represented utilities. Former utility representatives should not be the state regulators of utilities for the Ohio public.”
Weston said he would urge lawmakers to give his office the role of nominating candidates with a consumer background for one of the five seats on the PUCO — just as his office already nominates candidates for the Ohio Power Siting Board.
While the identities of the members of the nominating council are a matter of public record, a list of their names has not been posted on the PUCO website until recently. Minutes of the nominating council meetings and vote tallies are also public but only available by request.
As a member of the nominating council, Randazzo has been required to file annual financial disclosure statements with the Ohio Ethics Commission, listing sources of income, properties owned and creditors, in order to reveal possible conflicts of interest.
Randazzo continued to own a company he incorporated in 2010 called the Sustainability Funding Alliance of Ohio, Inc. Randazzo first disclosed that the company was a source of income in his 2011 financial disclosure statement.
The Sustainability Funding Alliance also turned up in a bankruptcy court filing in December 2018 as one of hundreds of companies used by FirstEnergy’s generation subsidiary, FirstEnergy Solutions, for professional services.
Language in the for-profit company’s 2010 incorporation papers states its purpose is “to receive and administer funds for cooperative purposes, to reduce the energy intensity of Ohio’s economy, and for such other purposes as may be permitted by law.”
An archived version of the company’s website states its mission this way: “We leverage the power of financial and physical markets to help Ohio businesses reduce their energy intensity, capture value from PJM's capacity and energy markets, and satisfy their reliability and price objectives — all things that government mandates and regulators cannot and will not do.”
In other words, the company’s stated mission was to help business customers achieve energy efficiency and to navigate deregulated markets to get the best deals on energy.
Randazzo’s most recent financial disclosure statement for 2019 lists the company as an investment but not as a source of consulting income.
Whether Randazzo or his consulting company have continued to advise business customers on energy matters could not be determined. Secretary of State records continue to list the company as active.
Franklin County property records show the company purchased properties in downtown Columbus in 2013 and 2014. The tax bills for these properties, which are paid on time, are sent to Randazzo’s downtown Columbus home.
In addition to the Sustainability Funding Alliance of Ohio, Randazzo’s financial disclosure statements filed since 2008 also show him as the owner of another company — the IEU-Ohio Administration Co. — and that company as a source of consulting income through 2018 as well.
Though this company’s name is similar to the trade group Industrial Energy Users-Ohio, or IEU-Ohio.org, for which Randazzo served as general counsel and registered lobbyist, the two organizations are distinctly separate.
Secretary of State records show that the IEU-Ohio Administration Co. was incorporated in 2003 and remains active. Its incorporation papers do not include a purpose.
A document filed in May 2018 by FirstEnergy Solutions in federal bankruptcy court listed IEU-Ohio Administration Co. as an unsecured creditor owed more than $43,000.
Randazzo’s resume filed with the Public Utilities Commission does not mention the Industrial Energy Users-Ohio Administration Company, LLC, nor the Sustainability Funding Alliance of Ohio, Inc.
In his financial disclosure statements for 2007 and 2008, Randazzo listed income from the Industrial Energy Users-Ohio Administration Co. at $750,000 and $1.1 million respectively. Subsequent annual disclosure statements do not include specific earnings.
Randazzo has declined an interview request to discuss his ownership of these companies as revealed in his current financial disclosure statement, whether the companies are still active as state records show they are, or his mission as chair of the utilities commission.
A hard line attitude
As chair of the utilities commission, Randazzo also leads the Ohio Power Siting Board, an agency that must approve any wind farm above 5 megawatts and any other new generation above 49 megawatts as well as in-state transmission lines and gas pipelines.
In recent months Randazzo has made rulings or led decisions at both agencies that have affirmed the fears of renewable energy developers.
At the Ohio Power Siting Board, Randazzo has made it clear that developers of wind and solar projects can expect close scrutiny and changes in operating rules.
In October, Randazzo unexpectedly held up two solar projects that had been scheduled for an approval vote that day, saying the board’s staff had failed to address numerous questions in each case.
“I am going to deviate from the normal process here a little bit,” Randazzo said before the board took up the first project, an 80-megawatt Nestlewood solar array planned east of Cincinnati.
Dallas-based solar developer Lendlease Energy Development, LLC, had begun its application a year earlier. The siting board had held two public hearings and had taken written testimony both from the public and experts.
The siting board’s staff had negotiated an agreement with objectors and the company, laying out the conditions it would have to meet for a certificate to build.
Noting that approval of a certificate would authorize the company not only to build the array but to also operate and maintain it, Randazzo detailed the what he saw as shortcomings of the board staff’s recommendation for approval.
“The final design of the project is unknown,” Randazzo read from his written remarks. “Non-participating property is very close to the project area. Yet there is no final landscape and lighting plan or indication of how the impact on the view shed of non-participating property owners will be protected.
“The final plan to manage glare is unknown. The impact on cultural resources is unknown. The complaint resolution process is unknown. The potential impact on farm field tile is unknown,” he continued.
Randazzo also raised concerns about how the project would affect the Kirtland’s snake, which the Ohio Department of Natural Resources lists as threatened. A biologist hired by the company did not locate the snake in the area of the development, according to a filing in the case docket. Randazzo said he had never heard of the snake but that the case file lacked the “details requiring the needed further coordination” with the ODNR.
In a second case before the siting board in October, Randazzo sharply criticized the agency’s readiness to allow a developer to amend two previously approved solar projects in northwest Ohio’s Hardin County because soil testing now revealed expensive geotechnical problems with one of them.
Separate subsidiaries of Chicago-based Invenergy had won approval of the two Hardin County projects in May 2019. Later, they won approval to merge the two projects but were now asking to separate them again while transferring some land from one to the other as construction began.
Randazzo again enumerated his objections in great detail, something previous board chairs have seldom done.
“The results of geotechnical drilling are not before us,” Randazzo said, “and even if they were before us, there is no indication of any independent review and evaluation by the Ohio Power Siting Board process, which includes involvement of other agencies having expertise in areas, including subsurface soil conditions.
“And even if we did have that information, we don’t know to what extent the testing results suggest that we may need to explore further to ensure that we remain true to the statutory requirements as well as the certificate conditions that continue to control.
“This is, I think, a larger question about the Ohio Power Siting Board process and how things are sequenced within that process.”
A spokesperson for the companies involved, attorney Andrew Bowers of Columbus, said the industry expects to resolve the issues Randazzo raised.
“While the ‘no decision’ at the siting board came as a surprise … we’re working in good faith to address the questions raised by the chairman and expect resolution in the weeks ahead,” Bowers said.
A hearing on the Nestlewood solar project was held on Feb. 26 in which the company attempted to address Randazzo’s questions. The siting board has yet to rule on the project. Invenergy is also continuing to file compliance testimony, though it appears to have dropped its request to legally separate its two solar projects.
Wind developers will also face tougher, by-the-book regulatory practices under Randazzo’s leadership.
In November, the siting board approved new regulations requiring wind farms to promptly report to local emergency services and to the siting board significant incidents such as thrown blade parts or ice. The board began considering those rules two weeks after Randazzo’s appointment in March 2019.
The new rules would also prohibit the restarting of damaged turbines and other equipment without approval of the siting board’s executive director. The industry, fearful that the state would quash wind development by adding tougher regulations, questioned the legality of imposing new rules on existing wind farm operations. The siting board rejected those appeals on Feb. 20.
At the conclusion of the February meeting, Randazzo announced the siting board would begin a comprehensive review of the siting board rules that utilities and developers seeking approval of new projects must follow as well rules enabling landowners and local government to comment. The review, which could give property owners not represented by lawyers a larger say, is required every five years, Randazzo said.
At the Public Utilities Commission, Randazzo oversaw a November ruling to block AEP Ohio from raising customer rates to help finance two large solar farms in southwest Ohio. Though the projects would be privately built, AEP would buy the power on behalf of its customers — and pass on the costs to customers.
In a previous regulatory case, the utility had agreed to build or support renewable energy in a deal it had negotiated with environmental groups opposing the company’s rate increase. The PUCO had then approved that agreement as part of the case and included language allowing AEP to add a “renewable energy rider” to its rates for use in the future if it could prove it needed renewable energy.
Under Randazzo’s leadership, the PUCO concluded that the utility had not proven — as it had to do under the law — that the state actually needed the renewable power. The commission rejected AEP’s request to have customers pay for the energy from the solar farms (and later from a new wind farm).
Randazzo stressed that the vote to reject the plan was not about the technology but about the commission’s responsibility to look after customer rates.
The Ohio Consumers’ Counsel as well as organizations representing commercial and industrial customers opposed AEP’s renewable subsidy plan while major environmental groups argued in favor of the ruling. The consumers’ counsel, in a written statement, called the decision “a rare major victory against the powerful monopoly AEP” and agreed with the ruling that electric customers already had clean energy options because of deregulation.
AEP sought reconsideration of the decision and asked under what terms it might be allowed to finance renewable energy. The commission rejected AEP’s request without comment in January.
‘Entrenched in the status quo’
Just days before DeWine announced the appointment, five major environmental groups wrote to the governor, expressing concerns about Randazzo’s efforts to dismantle the state’s efficiency and renewable energy standards.
“There is no question that Mr. Randazzo does not subscribe to the ‘all of the above’ energy strategy the DeWine Administration has promoted,” the letter reads, before asking for a candidate who “is not entrenched in the status quo of energy generation, or heavily biased against clean energy stakeholders.”
Following his appointment, the central Ohio chapter of the Sierra Club noted in its spring newsletter that Randazzo “has a history of being unfriendly to renewables.” The environmental group urged members “to keep the pressure on the PUCO to make the right decision.”
John Finnigan, senior regulatory attorney in Ohio for the Environmental Defense Fund — one of the groups in favor of the AEP arrangement with solar and wind developers — said the AEP decision as well as other decisions at the PUCO indicate Randazzo is not in favor of clean energy.
“It appears that he is tilting toward the end where decisions that come out of commission under his tenure as chair have not been favorable for environmental advocates or for residential customers who can benefit from those kinds of programs,” he said.
This story is part of a collaborative journalism project produced by Eye on Ohio, the Ohio Center for Investigative Journalism; and the Energy News Network. Funding is provided by The Cleveland Foundation and the George Gund Foundation.