What’s at stake as Ohio regulators finally turn to HB 6 charges?
Jun 17, 2025 | 4:45 am ET
Description
Members of the legal team for FirstEnergy and its Ohio utilities attend the first day of regulators' evidentiary hearing in cases linked to HB 6. (Photo by Kathiann M. Kowalski/Canary Media)
This story was originally published by Canary Media.
After years of delay, the Public Utilities Commission of Ohio is finally scrutinizing fees that could have enabled FirstEnergy’s bribes and other alleged violations related to House Bill 6, the 2019 law at the heart of Ohio’s ongoing corruption scandal.
The state regulatory board froze its cases related to HB 6 for more than a year to avoid interfering with federal criminal investigations. Delays in FirstEnergy’s production of thousands of documents had held up the cases before that.
After multiple convictions and guilty pleas in federal court, the state utilities commission finally began a “consolidated evidentiary hearing” last week for three cases connected to the scandal. The hearing – basically a regulatory trial – is slated to last until the end of June and will allow parties to present witness testimony and evidence to administrative law judges. At stake is whether FirstEnergy will have to pay penalties exceeding half a billion dollars — as well as the very credibility and legitimacy of Ohio’s utility regulatory system, observers say.
“The [utilities commission] has promised to follow the facts wherever they lead,” said Maureen Willis, who heads the Office of the Ohio Consumers’ Counsel, which represents the interests of the state’s residential utility customers. “Now is the moment to prove those weren’t empty words.”
FirstEnergy has already admitted to using dark-money organizations to channel approximately $60 million in bribes to organizations controlled by former Ohio House Speaker Larry Householder (R) in return for using his leadership position to help get a law passed to bail out its struggling nuclear power plants. The company also admitted it made arrangements to pay $4.3 million to Sam Randazzo, a former chair of the state utilities commission, shortly before he took office, in return for actions favorable to FirstEnergy and its utilities.
The company agreed to pay roughly $330 million to settle federal criminal and securities law charges, but neither the state nor its customers have received any compensation.
Just before the evidentiary hearing was set to begin on June 10, FirstEnergy lawyers sought to block large parts of expert testimony from opponents on how Ohio’s regulatory regime and certain charges added to customers’ bills enabled its unlawful activities. The contested experts’ testimony supports challengers’ requests for hundreds of millions of dollars in penalties. FirstEnergy’s utilities took the position that the experts’ statements are irrelevant and outside the scope of the cases.
One of the three cases that regulators are considering deals with what FirstEnergy did with more than $450 million collected under a bill “rider” that the Ohio Supreme Court found to be unlawful in 2019, because the utilities commission didn’t spell out how the money should be used when it approved the charge. A second case is about whether the company improperly used an account for utilities’ capital expenses to hide payments for a side deal with Randazzo and other unlawful activities. The third case asks whether FirstEnergy’s generation and distribution companies improperly colluded in actions related to HB 6 and Randazzo. A fourth HB 6-related case, which is not part of the current hearing, generally asks whether FirstEnergy used money from customers for political or charitable ends.
The Ohio Consumers’ Counsel’s request for more than $500 million in restitution and penalties is supported by testimony of its expert Ashley Brown, a former state utilities commissioner who headed the Harvard Electricity Policy Group. The Ohio Manufacturers’ Association Energy Group is asking FirstEnergy to credit roughly $770 million back to Ohio customers, supported by testimony of John Seryak, CEO of the energy consulting firm RunnerStone.
More than money is at stake, Seryak said in his written testimony: “Corrupting the regulatory process in such an appalling manner cuts to the core of our functioning democracy in Ohio. It is in a category of its own, and deserves a penalty that far exceeds the direct financial gains and interest of the case, severe enough to be a sufficient deterrent for future corruption of the regulatory process.”
FirstEnergy’s utilities have asked the commission to strike parts of Brown’s and Seryak’s testimonies on what the company sees as “extraneous issues.” Among other things, the company objects to Brown’s assertion that “FirstEnergy Corp. acted more like a lobbying firm with an electric utility company as a side business, than a utility merely looking out for its own self-interest.” The utilities also objected to many of his statements supporting requests for penalties.
FirstEnergy’s utilities argue that the background of the bill charge that was eventually held unlawful shouldn’t matter, because the companies had a right to collect the money until the Ohio Supreme Court found it was unlawful. The Public Utilities Commission of Ohio announced in January 2022 that an audit by Daymark Energy Advisors found “no evidence revenues from [the rider] were used to fund lobbying activities.”
In fact, the money went into a joint account which could be used for multiple purposes, and the report said the use of that joint money pool prevented the auditors from tracking the funds to any specific use. And its utilities’ dividends to FirstEnergy increased substantially once the bill charge took effect, according to an earlier interim report by Oxford Advisors. In Seryak’s view, that amounted to “free cash” that let FirstEnergy carry out lobbying and unlawful activities.
Statements by FirstEnergy’s lawyers during the June 10 cross-examination of an outside auditor who reviewed charges to an account for capital investments similarly suggested a narrow view that the commission should care only about how much more customers may have paid on their bills. Under that approach, dozens of improperly recorded transactions wouldn’t matter if they were above annual caps set by the commission.
In contrast, questions by challengers’ lawyers to Donna Mullinax of Blue Ridge Consulting Services, a witness for the Public Utilities Commission staff, suggested that all the payments mattered — and that the auditor and regulators at the utilities commission should have done more to flag irregularities, especially once the HB 6 scandal became public.
FirstEnergy’s arguments for keeping out expert testimony are “outrageous” and “insulting to the commission,” Brown told Canary Media. In his view, the commission needs a full understanding of the utilities’ history and corporate culture, along with regulatory audits and changes in FirstEnergy’s corporate practices, to properly impose potential penalties, which he says should be more than $500 million.
“The last thing you want to do is keep information from the decision-maker,” Brown told Canary Media.
Rulings in other cases have kept out evidence about House Bill 6 and circumstances that challengers say made it easier for former executives to divert company money and bribe former heads of the Ohio House of Representatives and the Public Utilities Commission. Regulators told stakeholders that the commission would eventually consider those issues in a future case.
“We are finally now at that case, and we should be able to proceed with a full and fair proceeding,” said Kimberly Bojko, a lawyer representing the Ohio Manufacturers’ Association Energy Group. The effort to block the experts’ testimony did not surprise her. But, she added, “I think it’s baseless.”
June 16 is the deadline for the manufacturers’ association and Ohio Consumers’ Counsel to submit legal briefs responding to FirstEnergy’s move to block the expert testimony. It’s also the deadline for responses to a separate company filing challenging the testimony of Joseph Perez, an analyst for the consumers’ counsel. Administrative law judges Megan Addison and Matt Sandor are expected to rule on the issue of expert testimony before the witnesses take the stand, which is tentatively scheduled for the week of June 23.
Columbus, OH