COLUMBUS — The original firm hired to audit FirstEnergy Corp.’s use of money designated for regional grid improvements must produce a witness to testify before the Public Utilities Commission of Ohio, an administrative law judge has ruled.
Attorney Examiner Gregory A. Price said in his 17-page order he is compelling the PUCO staff to produce a witness from Oxford Advisors to talk about what happened “in the interest of transparency.”
The evidentiary hearing date has not yet been scheduled.
Oxford Advisors was the original firm hired to perform an audit of where some $457.7 million collected by FirstEnergy and its subsidiaries went. The money, collected from ratepayers between Jan. 1, 2017 to July 2, 2019, was to be spent on improvements to the 13-state, regional electric grid operated by PJM Interconnection.
A 137-page audit released by Oxford’s successor, Daymark Energy Advisors, said “no documented evidence” proves FirstEnergy Corp. illegally used any part of that money to help secure votes it needed to bail out its failing nuclear and coal-fired power plants. But that firm also concluded that possibility can’t be ruled out.
Oxford Advisors did not finish the audit it had started. It could not be reached for comment.
In his ruling, Mr. Price denied several motions brought by the Office of the Ohio Consumers’ Counsel.
On Sept. 8, 2020, the OCC called for the audit of the fees FirstEnergy collected from what’s known as a Distribution Modernization Rider, or DMR. The commission agreed on Dec. 30 of that year to do that “in the interests of both transparency and state policy,” the ruling states.
But Oxford Advisors never finished the audit it began and, on June 2, 2021, the PUCO hired Daymark to do the one it released last month.
The ruling states, however, that Oxford prepared a mid-term report regarding the use of DMR revenues.
“Although this mid-term report was prepared to inform the Commission on whether the DMR should be extended and was filed in this docket only by mistake, the mid-term report may contain reliable, probative evidence regarding the Companies’ use of DMR funds,” the ruling states. “Therefore, the attorney examiner directs Staff to produce a witness from Oxford at the evidentiary hearing to be held in this proceeding.”
FirstEnergy obtained permission to impose the DMR on ratepayers from the utilities commission in 2016.
The Ohio Supreme Court nixed the surcharges in the summer of 2019 upon learning the utilities commission never actually required FirstEnergy to spend the revenue on grid upgrades.
It was never known if FirstEnergy used any of that revenue to lobby on behalf of controversial House Bill 6, the $1 billion bailout passed in the summer of 2019 that later became the focus of a $61 million bribery scheme federal prosecutors have described as the worst political scandal in Ohio history.
Daymark stated in its conclusion that it “found no documented evidence” that the utility did that. But in its Jan. 14 report, the latest auditor also took FirstEnergy to task for sloppy record-keeping and, thus, also stated in its conclusion it “cannot rule out with certainty” that money wasn’t misused, either.
FirstEnergy spokesman Mark Durbin said the utility was declining comment on the ruling.
J.P. Blackwood, Ohio Consumers’ Counsel spokesman, said that office is considering its options.
“We continue to be disappointed by PUCO rulings, such as Friday’s ruling by Examiner Gregory Price, that prevent our investigatory efforts in the FirstEnergy scandal. We are considering our options,” Mr. Blackwood said. “Unfortunately, the PUCO’s Friday ruling denied subpoenas that we needed for a deposition of a PUCO auditor. The deposition subject would have included how FirstEnergy used its infamous modernization charge that the PUCO allowed it to collect. That charge cost two million FirstEnergy consumers nearly half a billion dollars.”
Mr. Blackwood said the OCC has been “recommending legislative reform of the PUCO’s processes, and that includes giving OCC subpoena power without a need for PUCO approval.”
First Published February 21, 2022, 9:35 p.m.
