The Ohio Power Siting Board says it may reconsider a ruling that developers say would effectively kill the state’s first offshore wind project

Editor’s note: This story has been updated to correct Sen. Sandra Williams’ party affiliation.

The fate of a proposed 20.7-megawatt Icebreaker wind farm in Lake Erie is headed for a final ruling by the Ohio Power Siting Board in September after the board’s chair was confronted by state lawmakers at a meeting last week.

The project, worth an estimated $250 million to the local economy, would be the first freshwater wind farm in the nation. Developers say a May permitting decision by the siting board potentially requiring extensive shutdowns to protect wildlife will effectively kill the project.

Power Siting Board Chair Samuel Randazzo — facing questions at the board’s Aug. 27 meeting from two state lawmakers who sit on the siting board — said he hoped to have an order prepared for a vote at the board’s September meeting, though it isn’t yet clear what impact it would have on the May decision.

State Rep. Jeffrey Crossman and State Sen. Sandra Williams, Democrats representing greater Cleveland, interjected questions about the fate of Icebreaker before other business could begin.

Crossman argued that in light of the recent indictment of former Ohio House Speaker Larry Householder on a federal racketeering charge in connection with the passage of a bill to subsidize two Ohio nuclear plants, the siting board’s decision about the Icebreaker project should be transparent. 

“I think we owe it to the public to make sure that decisions that are coming out of this board and of the legislature are fully transparent and that we understand fully how decisions are being made and [are] certainly in the best interest of the public,” he said at the start of the meeting.

Randazzo, a longtime critic of renewable energy, has been criticized for what some regard as overly stringent reviews of solar and wind projects since his 2019 appointment.

The siting board had approved the Icebreaker project in May without Randazzo mentioning that deep in the 111-page permit was language allowing the state to order the turbines to shut down at night for eight months out of the year if it decides that sophisticated radar and bird collision detection systems are not adequate or if the wind farm kills more than 21 birds in 24 hours. Neither Crossman nor Williams were aware of the provision. They are non-voting members. 

Williams demanded that Randazzo explain why she and her staff did not receive the documents for the May vote until only hours before the meeting. “That is not the norm. That has not been the process since I have been on the board,” she said, “especially with such a large and significant document.”

Randazzo said he “could not agree more” with Crossman that the process should be transparent. He apologized to Williams if she had not received the order in May well before the meeting.  “We circulated the decision to board members, I believe, well in advance,” he said.

Williams noted that she and Crossman were among the 32 Northeast Ohio lawmakers who had written directly to Randazzo in July objecting to the overnight shutdown requirement and asking the board to take another look at the decision.

“We have reviewed the facts in the case, and we remain puzzled the Board would re-insert the evening Shutdown Order that its own technical staff had determined was not necessary to meet the statutory standard of “minimum adverse impact,” the letter stated in part.

The siting board’s technical staff had previously insisted that the turbines not operate at night for 10 months of the year to protect migrating birds.

In response, the Lake Erie Energy Development Corp., Icebreaker’s developer, had agreed to install sophisticated radar at the site as well as equip the turbines with high-tech sensors capable of detecting the collision of a single bird with a turbine. 

For that reason, the inclusion of a potential nighttime shutdown in the May permit surprised LEEDCo, which called it a “poison pill” making the project impossible to finance.  That’s about the time state lawmakers from the region got involved.

Williams also asked Randazzo why the lawmakers had heard nothing from him except that the letter would be placed in the public file of the case, a response she called “simply not sufficient.” 

Randazzo countered that the board often receives letters from lawmakers or numbers of lawmakers and that those letters are “not part of the evidentiary record” but are posted in a public comment section of the case so that the public is aware “in the interest of being transparent.” More than 1,000 public comments have been made in the Icebreaker case, including one filed Friday in support of the project from Cleveland City Council.

The siting board’s administrative staff agreed in July that it would reconsider the order as LEEDCo had asked as well as request for reconsideration from others, including opponents who want the project flatly denied because of possible bird and bat kills.

“We have people who have identified issues that we have to resolve based upon allegations of error that they believe the board made in issuing the initial decision,” Randazzo told Williams, “and that’s what we will take up, I hope, at the next board meeting.”

Ohio lawmakers challenge siting board over ‘poison pill’ for offshore wind is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

The state’s siting board had approved the project, but with a provision that made it nearly impossible to build.

Editor’s note: This story has been updated to include comments from Sen. Matt Dolan.

A bipartisan coalition of 32 state lawmakers from Northeast Ohio has interceded on behalf of the Lake Erie Energy Development Company’s 20.7-megawatt demonstration offshore wind project, now before state regulators.

In a strongly worded letter to Sam Randazzo, chair of the Ohio Power Siting Board, the lawmakers objected to the board’s ruling in May granting a permit —  if LEEDCo agreed to shut down the wind farm’s six turbines from dusk to dawn eight months out of the year, Mar. 1 through Nov. 1,  so there would no impact on migrating birds.

The provision, which the ruling noted might be lifted at some future point, was a “poison pill” that made the development financially unfeasible because it would drive away investors, LEEDCo president David Karpinski said at the time.

LEEDCo in June asked the board to reconsider. An administrative law judge granted the request, along with requests from other parties as well. The board does not meet until Aug. 21.

Calling the siting board’s May ruling “puzzling” and in part “unlawful,” the legislative coalition’s letter asks the siting board to “immediately grant LEEDCo’s request for reconsideration.”

Randazzo, a longtime opponent of renewable energy, also chairs the state’s Public Utilities Commission.

The nightly shutdown requirement had been an issue earlier in the four-year case, prompting LEEDCo to negotiate with the board’s technical staff, which had sought 11-month nightly shutdowns. 

The company then committed to installing state-of-the-art radar to detect birds and bats weighing a little as 11 grams, and collision detection systems on the turbines as part of a program to keep bird fatalities to a minimum, settling the issue. Or so LEEDCo thought, only to see the overnight shutdown provision buried deeply in the board’s May decision.

That history was not lost on the lawmakers.

“We have reviewed the facts in the case, and we remain puzzled the Board would re-insert the evening shutdown order that its own technical staff had determined was not necessary to meet the statutory standard,” they wrote.

The letter further argues that the May order is “unlawful” because

• It contradicts the evidence in the four-year case record as well as the formal finding of the U.S. Fish and Wildlife Service
• It does not offer “compelling evidence” to override the recommendations of the board’s staff or the recommendations of the Ohio Department of Natural Resources
• It requires two separate approvals, one for construction, one to operate at night — a violation of rules governing the board’s actions.

“I am hopeful that the [siting board members] take notice that legislators in this area and the people of our communities support this project,” said Rep. Jeff Crossman, a Democrat from Parma, and one of 15 lawmakers from Cuyahoga County backing the project.

“There doesn’t seem to be a legitimate basis for inserting the language that was inserted, which looks to me as a way to kill the project without overtly denying the project,” he said.

Crossman, along with Rep. Dave Greenspan, a Republican from Westlake; Sen. Matt Dolan, a Republican from Chagrin Falls; and Sen. Sandra Williams, a Democrat from Cleveland, organized the coalition to question the siting board’s May ruling.

The 32 legislators represent 11 Northeast Ohio counties and compromise about a quarter of the Ohio House and Senate.

Dolan said he advocated for intervention by the legislators because more is at stake than just the lake wind farm project. 

“Ohio is sending a very clear message: ‘We do not want innovation,’” he said. “Ohio will not be seen as fertile ground for investment in any new invention, innovation or technology. That is my point.

“I support [the lake wind farm] but if they had not worked their way through and had failed, that is what can happen. But they did, though. And that is what is disturbing. Why would anyone spend millions of dollars for at the last minute to have a poison pill inserted? And it stands. And no one says anything.

“It will be a wet blanket on all innovation, all new technology. People just won’t feel comfortable coming to Ohio. We cannot let this stand because of the long-term implications that it will have.” 

LEEDCo has previously estimated the project’s construction would be worth $250 million to the local economy. If built, the project would be the first freshwater wind farm in North America.

“If there ever was a time that Ohio needed a renewable energy project of this magnitude and with this economic impact, it’s now,’’ Karpinski said. “And if there ever was a time to make sure this project passed the smell test given the unusual circumstances of the decision and the fact that fossil fuel interests were opposing our project, it is most certainly now.”

Ohio lawmakers want ‘puzzling’ offshore wind ruling revisited is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Board Chair Samuel Randazzo, who unexpectedly demanded further review of the projects, says his concerns are now resolved.

The Ohio Power Siting Board has approved three utility-scale solar projects following a delay demanded last fall by the board’s chair, Samuel Randazzo.

The siting board on Thursday approved the 80-megawatt Nestlewood solar project that will be built on about 600 acres east of Cincinnati as proposed by Dallas-based developer Lendlease Energy Development, LLC.

The close scrutiny of the project by Randazzo, a longtime critic of renewable energy, put the brakes on the project in October and had come as a surprise to developers and board staff. Randazzo said his concerns are now resolved.

In a second vote, the board approved altering the location of some of the solar panel arrays in two solar farms previously approved for northwest Ohio’s Hardin County.

The siting board in May 2019 approved the two adjacent solar projects with a combined output of more than 300 megawatts proposed by Chicago-based Invenergy.

Rows of solar panels typically sit on metal racks atop steel I-beams driven into the ground. Subsequent test borings by the developer — as required by the siting board’s permit — indicated that portions of the land were unsuitable. Invenergy then asked to alter the footprints of the two adjacent projects.

The siting board’s staff, the company, and the Ohio Farm Bureau — which had intervened in the case to represent farmers adjacent to the project as well as farmers who own the land leased for the project — had agreed on the layout changes and had submitted the modified site plans to the board for a vote of approval when Randazzo unexpectedly demanded further review of the entire project in October.  

He laid out his objections in great detail, including what he said was lack of specificity about the final design of project, including lighting and appropriate vegetative screening to hide the solar arrays from adjoining properties. He also said he was concerned about the impact the project would have on the Kirtland’s snake, a threatened species.

Before Thursday’s vote to approve both projects, Randazzo said he was satisfied that each of the projects had now been more thoroughly vetted.

“There were some things that needed more attention, from my perspective … dealing with the geotechnical drilling and test results,” he said before the vote to allow Invenergy to alter the footprint of the two Hardin County solar projects.

“We deferred action on the project due to the facts. That may not have fit with the wishes, inclinations or passions of everyone, but it was necessary given the job we have,” he said.

But a look at the siting board’s docket for the two Hardin projects shows that the details that Randazzo sought in October had already been filed, including possible environmental impacts connected to moving the locations of the arrays and the underground wiring delivering the solar power to an on-site substation. The issue of the Kirtland’s snake had also been dealt with. 

The siting board’s docket on the 80-megawatt Nestlewood case in southwest Ohio shows that the company, the staff of the siting board, and the Ohio Farm Bureau filed an agreement in June 2019 seeking to resolve potential issues, and that a siting board judge conducted an administrative hearing in August 2019.

The docket also shows that following Randazzo’s October objections to the board approving the project, six expert witnesses for the company submitted additional testimony and a siting board judge conducted a second hearing in February 2020. The hearing sought to deal with Randazzo’s objections and to resolve issues raised by a neighbor opposing the project as well as issues raised by local government regarding safety and storm water runoff.

Lendlease Energy Development, the Texas company building the Nestlewood project, began its application in October 2018.

Before the second vote to approve the Nestlewood project, Randazzo thanked the developer and the siting board staff as well as local public officials who undertook additional work following his objections in October.

“While we previously identified some things that needed attention in the Nestlewood case, I want to thank the project developer and stakeholders, the OPSB staff and also the actions of local officials, for their constructive effort to address these through the submission of additional evidence and modifications to their agreement proposing to resolve issues of fact and law,” he said.

Editor’s note: This story has been updated to correct a technical detail about the the solar array construction.

After months of delay, Ohio solar projects gain siting board’s approval is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Less than a year into his position as head of the Public Utilities Commission of Ohio, Samuel Randazzo has already made his mark.

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 heir 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.

Unanswered questions

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 article is part of a joint investigative project by Eye on Ohio and the Energy News Network. 

How a longtime critic of clean energy became Ohio’s top utility regulator is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Utility-friendly lawmakers and regulators have shielded Ohio utility power plant affiliates from competition at customers’ expense.

In a residential neighborhood south of downtown Cleveland, a decorative lamppost provides a stark illustration of what critics say is an abusive system of surcharges that have created billions of dollars in subsidies for the state’s utilities.

The 150-watt light in a tiny residential park is the only thing for which the South Hills Neighborhood Association used electricity in July. Yet the electric bill was nearly $70 — only 38 cents of which was for the actual electricity consumed.

The bill for that single lamppost is now nearly 750% higher than it was just 11 years ago. In July 2008, the charge for the same light totaled $8.28, with $2.69 going toward electricity.

The following summer, the monthly bill had already jumped to $34.85, with the inclusion of a new “Distribution Related Component” charge of $19.69. That charge alone would nearly double to $38.17 by 2019. 

“We transformed this neglected traffic island into our little park. Part of this was the lamppost that reflects the architecture of the neighborhood,” said Mary Ann Jannazo, an organizing founder of the association and past president. “It was manageable a decade ago, but now it is the highest cost we have monthly. Annually we are paying over $700 a year for one streetlight.”

Other ratepayers are seeing similar bills. Mike Hulett, the owner of Broadway Cyclery in Bedford, said the delivery charges on his most recent electric bill from FirstEnergy’s Cleveland Electric Illuminating Co. came to $74.33, while the actual price of the electricity was $21.42. Like the neighborhood association, the bike shop is billed by the Illuminating Co. at a small business rate. 

How did it get to this point? Like most things involving utilities, it’s complicated.

In 2008, the Ohio Legislature enacted Senate Bill 221, allowing state regulators to develop “electric security plans.” Those plans let utilities add riders to bills beyond the basic costs of distribution services and investments. 

“Customers’ base distribution rates have not changed since 2009 and will continue to be frozen through May 2024,” FirstEnergy spokesperson Mark Durbin said. However, the company’s utilities and others in the state have added a variety of extra charges to their bills.

“The use of riders is common among all Ohio utilities, and has been for years,” Durbin noted. “All riders are subject to PUCO [the Public Utilities Commission of Ohio] review and approval. Many riders are part of utilities’ rate plans, as authorized by Ohio law and approved by the PUCO.” 

As a result, thousands of customers’ bills remain high, even as wholesale costs for electricity have fallen.

Timeline: From deregulation to now 

A 2018 analysis by 24/7 Wall Street calculated Ohioans’ average monthly bill at $111. Average electricity use was 23rd lowest among the states, yet Ohio ranked two places higher for costs — meaning its people paid disproportionately more for their electricity.

Those higher costs also reflect a disparity between wholesale and retail electricity prices. Ohio is part of the PJM regional grid, a mid-Atlantic regional transmission organization, where wholesale prices have had some significant drops and an overall downward trend since 2008. For the most part, however, the trend in Ohio’s retail electricity prices has been upward, even at times when wholesale electricity prices have fallen.

The average residential customer’s cost per kilowatt-hour delivered was 8.24 cents in 2000, 11.26 cents in 2008, and 12.89 cents in 2018, data from the Energy Information Administration shows. Over that time span, the average wholesale price of power fell from roughly 5.5 cents per kilowatt-hour to 2.5 cents per kilowatt-hour.

“Since deregulation in 1999, Ohioans have been made to pay an astounding $15 billion in subsidies to electric utilities,” energy industry consultant Michael Haugh told lawmakers in June, speaking on behalf of the Office of the Ohio Consumers’ Counsel. 

Impacts of subsidies depend on where consumers live. American Electric Power’s residential customers’ rates rose more than 4 cents per kWh since retail restructuring, reported Ohio State University energy analyst Noah Dormady and others in the March 2019 Energy Journal.

Like FirstEnergy, AEP transferred its power plants to an affiliated subsidiary instead of selling them outright. AEP finally sold most of its Ohio coal plants in 2017. The company still has partial ownership interests in two coal-fired power plants at Coschocton and Brilliant. The company also retains a share of the output from two 1950s-era plants, known as the OVEC plants. 

In contrast, deregulation saved Duke Energy’s residential customers roughly 3 cents per kWh, Dormady and his colleagues found. Duke sold almost all of its power plants to unaffiliated entities, although it too has a share in the OVEC plants’ output.

Most recently, FirstEnergy and other utilities persuaded lawmakers to require customers to pay yet more subsidies. The companies say FirstEnergy’s affiliated nuclear plants and OVEC’s two aging coal plants are no longer competitive. House Bill 6, passed July 23, creates new charges on customers’ bills to help prop up the plants.  

Here’s a look at how Ohio came to the crossroads it faces today.

Before 1999: Full regulation

Before 1999, Ohio utilities owned and ran both power plants and electric distribution systems as regulated monopolies. Customer charges were not well understood by the public. However, the Public Utilities Commission of Ohio provided oversight through comprehensive rate-making cases. Customer charges covered a bundle of services, including costs to make electricity, debt service for costs to build and upgrade power plants, costs for the transmission and distribution of electricity, and various surcharges.

That system also let utilities earn a profit as a return on their investments. This encouraged “gold plating,” a practice where companies often opted for higher-priced options over lower-cost alternatives. That way, the rate base on which companies earned their guaranteed profit was higher. Gold plating made consumers’ electricity rates higher as well. And without competition, companies had little incentive to run their power plants as efficiently as possible.

1999: The move to deregulation

Senate Bill 3 called for Ohio to move to a competitive generation market. The bill also authorizes government aggregation plans, to give consumers bulk purchasing power vis-à-vis generators. In other words, local governments could now negotiate lower power prices for their residents. The provision led to the creation of the Northeast Ohio Public Energy Council, or NOPEC, and similar groups. Delivery prices remained under the control of state regulators. 

The law allowed for a transition period from 2001 through 2005, but left most details up to the Public Utilities Commission. Those details included how utilities could recover so-called “stranded costs” for plants they had built and run, but for which they would no longer be able to recover customer charges in a “distribution-only” system. Transition charges under the 1999 law included billions of dollars in costs for FirstEnergy’s Davis-Besse and Perry nuclear plants and for other power plants in Ohio.

By the end of the first five years, a competitive market still had not developed in Ohio. Meanwhile, prices for coal and gas kept rising. In response, the PUCO and utilities developed rate stabilization plans for 2006 through 2008.

2008: “Electric security plans”

By 2008, a competitive generation market for electricity had developed. Nonetheless, Ohio lawmakers authorized “electric security plans,” which were presented as a way to protect consumers from wild fluctuations in electricity prices. The law, Senate Bill 221, also added the state’s first renewable energy and energy efficiency standards. And it added charges for things such as utilities’ “lost profits” due to energy efficiency measures and “reasonable arrangements.” Those arrangements shift some costs from industrial customers to consumers and smaller commercial businesses. Varying rates for different classes of customers also do the same thing, to some extent.

By the time SB 221 took effect the next year, Duke Energy had sold all of its former power plants in Ohio. However, FirstEnergy, American Electric Power and Dayton Power & Light had merely transferred their plants to affiliated subsidiaries. The 2008 law set the stage for those three companies to shift a variety of costs from some customers to others and from their regulated distribution customers to their unregulated generation subsidiaries, said Dormady, the energy industry analyst at Ohio State University. Among other things, the law let utilities add a variety of charges that were not directly tied to distribution costs, and companies could then shift revenue to affiliated generation companies. 

2010: Natural gas boom

Fracking — a combination of horizontal drilling and hydraulic fracturing to get oil and gas from shale — took off in earnest in Pennsylvania starting in 2010. That same year, FirstEnergy chose to more than double its investment in coal-fired power plants by announcing a merger with Allegheny Power.

FirstEnergy “doubled down on coal at the same time that natural gas prices were falling,” said Dick Munson, who works to advance clean energy in the Midwest for the Environmental Defense Fund. “Did that mean Ohio ratepayers and taxpayers should bail them out for having made a bad decision?”

By 2011, FirstEnergy acquired Allegheny Power and its coal-fired power plants. Then in 2012, Senate Bill 315 paved the way for fracking expansion in Ohio’s Marcellus and Utica shale.

At the same time, AEP and FirstEnergy competed for customers with each other and with new suppliers that had entered Ohio’s generation market. Monopoly-type profits for their affiliated generation plants were no longer guaranteed. And declining costs for natural gas, and then renewables, made coal and nuclear power less competitive.

Meanwhile, FirstEnergy announced it would close four power plants in Ohio, rather than comply with federal rules to reduce pollution from mercury and other toxic compounds. For the next three years, customers paid higher prices in standby fees and for expanding the distribution system to bring in more electricity from the rest of the PJM grid area.

2014: Bailout cases begin

AEP, Duke and FirstEnergy all filed cases seeking to charge all customers costs for certain noncompetitive coal plants. FirstEnergy’s case also seeks to subsidize the Davis-Besse nuclear plant. In addition, FirstEnergy asked federal regulators to set aside the results of PJM’s annual capacity auction — presumably because some of its plants had trouble competing.

Utilities said the arrangements would save customers money in the long run. Competitors balked and said more efficient resources could be shut out of the market. Consumer and environmental advocates said customers would foot big bills. For example, FirstEnergy’s plan could have cost consumers $3.6 billion to $5.15 billion, according to the Office of the Ohio Consumers’ Counsel.

Also in 2014, Ohio lawmakers weakened the state’s renewable energy and energy efficiency standards, put a two-year “freeze” on those standards, and tripled property line setbacks for commercial wind turbines. The measures slowed the pace of growth in the renewable energy sector, arguably providing some insulation from competition for utility-affiliated power plants. Natural gas development continued, however, increasing competitive pressure on coal and nuclear power.

2016: Ohio regulators rule for bailouts

After initial denials for Duke and AEP in 2015, a March 2016 ruling by the Public Utilities Commission of Ohio allowed FirstEnergy’s plan to guarantee sales of all power from certain noncompetitive plants, plus a similar plan for AEP. Then federal regulators called for strict scrutiny of the deals between utilities and their affiliated generation companies.

AEP called for a return to regulation of generation with guaranteed profits where it could own power plants. The company dropped affiliated plants from its plan but still sought subsidies for the two 1950s-era coal plants from its initial 2014 plan. Those plants are owned by OVEC, the Ohio Valley Electric Corporation, and Ohio utilities had previously committed to buy power from them. The PUCO eventually allowed those subsidies for AEP, Duke and Dayton Power & Light, with costs being passed on to all customers, regardless of who they chose as their electricity supplier.

Meanwhile, FirstEnergy shifted to a “virtual” power purchase plan, where it would just get the money for the noncompetitive plants, with no formal contract to buy electricity. By July 2016, estimated costs for FirstEnergy’s requests ballooned to more than $8.5 billion. In October 2016, the PUCO instead let FirstEnergy charge customers a credit support rider of about $200 million per year for three years. The PUCO called the charge a “distribution modernization rider,” but nothing required FirstEnergy to use the money for that purpose.

2017: Renewed legislative efforts

The Ohio Consumers’ Counsel said riders under electric security plans and other subsidies since 1999 totalled more than $14 billion as 2017 started. Yet pro-utility bills in the 2017-18 session would have cemented subsidies for the old OVEC coal plants, subsidized FirstEnergy’s Davis-Besse and Perry power plants, further weakened the energy efficiency standard, and made the renewable energy standards voluntary. Ultimately, they did not pass.

Industry competitors and consumer advocates called for fuller competition, noting that deregulation of generation has saved consumers roughly $3 billion per year. However, a bill to get rid of electric security plans with their riders, prohibit utility ownership or affiliation with generation plants, and allow customer refunds of unlawful utility charges didn’t move out of committee, despite support from conservative, environmental and consumer groups. Neither did bills to relax the tripled wind turbine setbacks from 2014.

2018: Bankruptcy and more

FirstEnergy filed for bankruptcy for its generation subsidiary, FirstEnergy Solutions, and announced that the Davis-Besse and Perry power plants would close if the company didn’t get subsidies. FirstEnergy Solutions filed notice to planned closures with the Nuclear Regulatory Commission. An April 2019 ruling later held that FirstEnergy could not use the bankruptcy case to fully insulate itself from the closure costs associated with its former plants.

In late 2018, the Ohio Supreme Court affirmed the PUCO’s order calling for AEP ratepayers to subsidize the OVEC plants, affirming the regulators’ choice to insulate old coal plants from competition.

2019: Subsidy charges back on the table

In July 2019, Ohio lawmakers gave in to pressure from FirstEnergy and other utilities. House Bill 6 will make all Ohio customers subsidize the Davis-Besse and Perry nuclear plants, plus the two 1950s-era coal plants. The law also guts large parts of the state’s clean energy standards.

In June 2019, the Ohio Supreme Court finally ruled that FirstEnergy’s 2016 credit support rider was unlawful. By then, ratepayers had already shelled out roughly $440 million in extra charges. However, the court would not let consumers recover the money for charges before its decision.  

“A frustration for consumers is that Ohio government, including the PUCO, seems determined to find ways to make Ohioans subsidize or bail out FirstEnergy companies when they want money that they can’t make in the competitive market,” said J.P. Blackwood, spokesperson for Ohio Consumers’ Counsel Bruce Weston, when the court’s June 2019 decision came out.

What’s next? 

“FirstEnergy provides electric distribution and transmission service to more than 2 million Ohioans through our three regulated utilities companies in the state,” said Durbin, the FirstEnergy spokesperson. “We are committed to providing those customers with safe, reliable, clean and affordable energy.”

Nonetheless, continuation of riders, subsidies and other policies has shifted away from the state’s original 1999 goal of deregulating the state’s retail electricity markets. Most consumers’ total electric bills have risen, even as wholesale prices for electricity have fallen over the last decade. 

Yet competition in electric markets has kept bills from climbing even higher, according to researchers at Ohio State University and Cleveland State University. Competitive generation markets have saved Ohioans $23.9 billion since 2011, the researchers report in an August 2019 analysis prepared for NOPEC, the Northeast Ohio Public Energy Council. 

“Ohioans would have seen even greater savings had state regulators been more frugal in their approval of these non-bypassable charges [added to the delivery side of the bill]” said Chuck Keiper, executive director of NOPEC. 

“AEP Ohio is focused on delivering electricity to our customers and making improvements that make our distribution system smarter, more reliable and more resilient,” AEP spokesperson Scott Blake said. “Many of the charges referred to in the report are directly related to these improvements and are regulated by the PUCO as well as other government agencies.”

Meanwhile, the energy market continues to evolve.

“The falling price of natural gas, as well as to a lesser extent the falling price of wind and solar, have caused old technologies — things from the 1950s — to no longer be able to participate in the market,” said Munson at the Environmental Defense Fund. “The owners of those plants would like them to be able to. And if they can’t do it through the traditional free enterprise system, they’ll look for subsidies.”

How affiliate arrangements, subsidies and riders led to higher electric bills in Ohio — even as power prices declined is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.