By John Stang
FirstEnergy Corp.’s acting chief executive officer Steve Strah is now the permanent CEO, the corporation announced this week.
Strah had been acting CEO since October and president, a position he retains, since May 2020. He has replaced Chuck Jones, who was fired last October in the wake of a $60 million bribery scandal linked to the Ohio General Assembly’s 2019 bill that would provide a $150 million annual financial bailout to the company’s Davis-Besse and Perry reactors. Overall, the bailout was expected to provide about $1.3 billion to the reactors.
The 2019 law — House Bill 6 — was supposed to go into effect on Jan. 1, 2021. But implementation is on hold. That bailout was supposed to be paid with an $0.85 monthly increase in the electric bill for each Ohio residential utility customer, regardless of whether that home is a FirstEnergy customer.
“Since (Strah’s) appointment as acting CEO, he has taken meaningful steps to put FirstEnergy on the right path forward, including ensuring a renewed emphasis on compliance and transparency throughout the company; laying out his strategy. .. to transform the company; and working to reduce regulatory uncertainty affecting the company’s Ohio utilities,” said Donald Misheff, FirstEnergy’s non-executive chairman, in a press release.
Strah added: “Moving forward, we remain focused on driving strong performance, engaging constructively with regulators and our other stakeholders, and fostering a culture of uncompromising integrity and ethical behavior, starting from the top.”
Meanwhile, Ohio’s state Senate last week unanimously passed a bill to revoke much of the 2019 bailout law.
Senate Bill 44, introduced by Republican Sens. Jerry Cirino and Michael Rulli, would lower the utility rate hikes set by the 2019 law. A Senate fiscal report said this would trim $1.05 billion in subsidies from now until 2028.
SB 44 is now in the Ohio House.
In a press release, Rulli said: “Last General Assembly, I, and my constituents, had serious concerns about the provisions included in House Bill 6, which is why I voted ’no’ on that legislation. By repealing the nuclear subsidy, this bill is an important step to fixing some of those issues, including saving money for ratepayers.”
FirstEnergy has been accused of — but not so far charged with — funneling and laundering $60 million in bribes and hidden political contributions to former Ohio House Speaker Larry Householder (R) and the campaigns of many legislative allies in order to have ratepayers subsidize FirstEnergy’s two reactors. The FBI has charged Householder and four political operatives with racketeering. Two operatives have pleaded guilty. Householder, who lost his speakership over the charges, and two allies have maintained their innocence.
Former FirstEnergy subsidiary FirstEnergy Solutions — renamed Energy Harbor — now operates the two troubled reactors and had planned to retire them by May 2020 and May 2021, because it did not have the money to operate them economically.
The FBI alleges that FirstEnergy bribed Householder, and supported election of 21 new representatives in 2018 who would ensure Householder’s selection as House speaker. Householder would then ensure the state’s ratepayers would subsidize the two reactors with a rate hike, the FBI said.
In a related development last week, Cleveland.com reported that a federal judge threw out a lawsuit that FirstEnergy and contractor Clearsulting filed against a whistleblower who had worked for Clearsulting.
The whistleblower is former Clearsulting analyst Michael Pircio who was auditing FirstEnergy. Pircio downloaded information regarding the audit from a Clearsulting database and sent it to his attorneys, who then sent it to the U.S. Securities and Exchange Commission, which is now investigating that information, according to Cleveland.com. Clearsultng fired Pircio last July and the two corporations filed a lawsuit against him last September, alleging he stole confidential information.
“This is exactly the type of tactics that this company has used in the 35 years that I’ve been involved in Ohio politics, And now, they are using it on their employees and their consultants to scare them away from being whistleblowers,” Pircio’s attorney Marc Dann told Cleveland.com.
Ichan Out?
Bloomberg News reported Monday that corporate mogul and raider Carl Icahn is in talks with FirstEnergy for him to assume control of two seats of FirstEnergy’s board of directors. The two sides have not commented to Bloomberg. The news service said anonymous sources indicate that the talks could fall apart.
Several days ago, Icahn sent a letter to FirstEnergy announcing his interest in the Akron-based corporation. In a regulatory filing, FirstEnergy said Icahn Capital LP filed a document with the Federal Trade Commission and the Department of Justice to comply with the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Icahn’s Justice filing described “‘a present good faith intention to acquire voting securities of (FirstEnergy) in an amount exceeding $184 million but less than $919.9 million of the voting securities of the issuer, depending upon various factors including market conditions,’” FirstEnergy said in its own regulatory filing.
FirstEnergy Lobbyists Out.
In other developments, FirstEnergy recently filed paperwork with Ohio General Assembly’s Joint Legislative Ethics Committee that says it terminated two in-house lobbyists on Feb. 23. That leaves FirstEnergy with six lobbyists. Strah recently said that FirstEnergy would cut back on its lobbying activities.
Also, news reports said the Public Utilities Commission of Ohio is expanding one of its audits of FirstEnergy to look at a $4 million payment to a consulting firm owned by Sam Randazzo, former PUCO chairman. Randazzo resigned last November following an FBI raid on his home related to the $60 million bribery scandal.
