In the latest fall-out from a two-year-old bribery scandal, FirstEnergy will pay $3.9 million for failing to fully provide the Federal Energy Regulatory Commission’s enforcement office with requested lobbying and accounting information, according to an agency order issued Friday.
During an enforcement office audit, FirstEnergy didn’t tell FERC it paid more than $59 million to Generation Now, an organization operating for the benefit of then-Speaker of the Ohio House of Representatives Larry Householder, and over $22 million to companies owned by Samuel Randazzo, who became chairman of the Public Utilities Commission of Ohio, the agency said.
The Akron, Ohio-based utility company, which is emerging from a bribery scandal, admitted it violated FERC’s “duty of candor” rule and agreed to two years of compliance monitoring.
FirstEnergy is continuing to work through issues related to bribes it doled out in support of HB 6, energy legislation in Ohio that provided about $1 billion to two nuclear power plants owned by a former subsidiary, now called Energy Harbor.
In February 2019, FERC’s Division of Audits and Accounting started an audit of FirstEnergy and its subsidiaries and affiliates. The audit included a review of whether the company complied with FERC’s accounting and reporting rules.
The division asked FirstEnergy for information related to its lobbying and governmental affairs expenses and accounting through data requests and as part of site visits, according to FERC.
“Throughout 2019 and early 2020, FirstEnergy claimed to respond fully to those data requests with complete and accurate responses,” FERC said.
However, in late July 2020 it became known that FirstEnergy was facing allegations it was part of a racketeering conspiracy related to the passage of HB 6, the agency said. FirstEnergy later cooperated with the enforcement office’s investigation and provided the information.
FERC said the agreement reflects the nature and seriousness of FirstEnergy’s conduct and is a fair and equitable resolution of the issue.
Separately, the Securities and Exchange Commission is investigating whether FirstEnergy violated securities laws as part of the HB 6 scandal.
It is “probable” FirstEnergy will incur a loss related to the investigation, the company said in an Oct. 25 SEC filing. “Given the ongoing nature and complexity of the review, inquiries and investigations, [FirstEnergy] cannot yet reasonably estimate a loss or range of loss that may arise from the resolution of the SEC investigation,” the company said.
FirstEnergy owns 10 electric utilities that serve about 6 million customers in Maryland, New Jersey, New York, Ohio, Pennsylvania and West Virginia.