ML21115A000
| ML21115A000 | |
| Person / Time | |
|---|---|
| Site: | Three Mile Island  |
| Issue date: | 04/25/2021 |
| From: | Donna Anderson FirstEnergy Corp |
| To: | Document Control Desk, Office of Nuclear Reactor Regulation |
| SECY RAS | |
| References | |
| General Proceeding, RAS 56071, Three Mile Island 50-320 LT | |
| Download: ML21115A000 (6) | |
Text
4/25/2021 trail Money inFirstEnergy scandal corruption leads outside Ohio upfor Sign email updates FirstEnergyimproperly usedmoneycollected from customersinfive topayfor states expensesconnected tothe ongoingcorruption scandalinOhio,thecompany hasconfirmed.
Themoney wascollected from customersofFirstEnergy's regulated distribution andtransmission utilitiesin Maryland, NewJersey, Ohio,Pennsylvania,andWestVirginia,according tostatementsfound inannual Form1reports recently theutilities filed thismonth with theFederalEnergy Regulatory Commission.
FirstEnergyfirstdisclosed inFebruarythat itsinternal related investigation tothefederalracketeeringcase against formerOhio Housespeaker LarryHouseholderhad:
Next a Warren Buffett doesn't want years ormore, includingvendor services,that were either improperly classified, misallocated tocertain oftheUtilitiesandTransmission Companies, https://www.energyandpolicy.org/firstenergy-corruption/ 1/6
4/25/2021 Moneytrail inFirstEnergy scandal corruption leadsoutside Ohio orlacked proper supporting documentation.These transactions resulted in amounts collected from customers that were immaterial toFirstEnergy, and the Utilities andTransmission Companies will beworking with the appropriate regulatoryagencies toaddress these amounts.
TheEnergy andPolicy Institute found similarstatements inannual Form1 reports for 2020filed FERC with byfourteen FirstEnergydistribution, generation, andtransmission utilitiesearlierthismonth; thestatements indicated thatthemoneywas collected from customersofall fourteen subsidiaries.
Onestatement found intheForm1 report filed byJersey Central Power & Light (JCP&L) reads asfollows (highlightsadded):
GG inconnection with the internal investigation, FirstEnergy recently identifl certain transactions, which, insome instances, extended back ten ormore years, including vendor service, that were either improperly classified, misallocated tocertain FirstEnergy utility and transmission companies, or lacked proper supporting documentation.These transactions resulted in amounts collected from customers that were immaterial toFirstEnergy and JCP&L.These utility andtransmission companies will be working with the appropriate regulatory agencies toaddress these amounts.
Nearly identical statements werefound inForm1sfiled bythirteen other FirstEnergy utilities, only with the initialsoftheutility filingthereport intheplace inserted ofJCP&L's, including Allegheny Generating Company, American Transmission Systems, Cleveland ElectricIlluminating Company, Metropolitan Edison, MonPower, Ohio Edison, Mid-Atlantic InterstateTransmission, PATHAllegheny Transmission Company, Pennsylvania Electric Company, Pennsylvania Power Company, Potomac Edison, Toledo Edison, and WestPennPower.
TheEnergy andPolicy Institute askedJennifer Young, a spokesperson for FirstEnergy, toconfirm that the moneywascollected from customers ofthedistribution andtransmission utilities that included those statements intheirForm1s.
"Your ofthedisclosure interoretation iscorrect."Younaresoonded inanemail.
Next a Warren Buffett doesn't want toreturn fundstoratepayers that wereimproperly includedincustomer rates."
https://www.energyandpolicy.org/firstenergy-corruption/ 2/6
4/25/2021 Money trail inFirstEnergy scandal corruption leads outside Ohio "During ourlast call,we mentioned thatwe wereproactively engaging with ourregulators torefund customers for certain vendor payments," FirstEnergy CEOSteven Strah said during anearnings callthis morning. "Those conversations are underway ineachaffected jurisdiction."
"In Ohio, atthe PUCO's request, thescope ofourannual audit ofRider DCRhasbeenexpanded toinclude a review ofthese payments," Strah said.
Last month, thePublic Utilities Commission ofOhio(PUCO) directed that theaudit ofFirstEnergy's Delivery Capitalization Rider (DCR) be expanded toinclude to"determine whether anyfunds from ratepayers were used topayfor thevendorsand if so,whether funds associated with thepayments should bereturned to ratepayers through Rider DCRor through analternativeproceeding."
FirstEnergy did notrespond toa request for more information about howexactly FirstEnergy isworking to refund themoneytocustomers, andinwhich affected jurisdictions.
Exactly howmuchmoneywasimproperly collected from customers remains a closely guarded secret, but somedetails have trickled outofFirstEnergy andmore may beonthe way.
Company officialssaid onanearnings call inFebruary thatthe "transactions" included a $4.3 million payment toanindividual whofit thedescription offormer PublicUtilities Commission ofOhio chairman Samuel Randazzo, whoresigned lastyear after theFBIraided his townhouse inColumbus.The transactions "could" have also included moneyspent onlobbying andpolitical efforts, company officials said onthecall.
Santino Fanelli, FirstEnergy's directorofrates andregulatory affairs, revealed during a March deposition led bytheOhio Consumers Counsel that atleast someofthe$56.6 million that wassecretly routed from the FirstEnergy Service Company toGeneration Nowwasmisallocated toFirstEnergy's Ohio utilities, which include Ohio Edison, CEI, andToledo Edison.
Generation Nowisoneofthree defendants that havepleaded guilty toracketeering conspiracy charges in theHouseholder case, inconnection with a $60 millionbribery scheme that resulted ina $1billion nuclear power plantbailout included inOhio's 2019energy lawHouse Bill 6,aswell ascoal bailouts anda gutting ofclean energy laws.
FirstEnergy disclosed today ina quarterly financial reportthat it isdiscussing thepossibility ofa deferred prosecution agreement with federalprosecutors. Thecompany also said thatit"believes itisprobable thatit will incur a loss inconnection with theinvestigation."
Next a Warren Buffett doesn't want transmission maybeonthehook utilities for asmuchas$137 million inmoneypaid totheFirstEnergy Service Company in2017to2019for external affairssupport that included lobbying andgovernment affairs.
https://www.energyandpolicy.org/firstenergy-corruption/ 3/6
4/25/2021 Money trail inFirstEnergy corruption scandalleads outside Ohio Below isanexcerpt from JCP&L's annual Form1report for 2020.
Page 51 of Jersey Central Power & Light FERC Form1Annual 2020 i : -
i / /
NameofRespondent This Report is: Date ofReport Year/Period ofReport (1) X AnOriginal (Mo, Da,Yr) ese Cea oe & Coa (2)A Resubmission / / 2020/o ie Corrup Aciviy Ac andcivil conspiracy agains FE.FESCandFES, Te plainiffsineac ofheabovecases. seek, among oer hings. o recover anunspecified amounofdamages (unless oerwise noed).inaddition onAugust 10. 2020,the United Staes Securities andExchange Commission, trougits Division ofEnforcement.
issuedanorder directing aninvestigaion ofpossible securities laws violaions byFE.andonSeptember 1.2020. issued subpoenas to FE andcerain FE officers. Furher. inleters daed January 26and February 22.2021. saff ofFERC's Division ofInvesigations noifiedFirsEnergy ta theDivision isconducting an investigation ofFirstEnergy's obbying and governmental affairsactiviies concerningHB 6,andsaff direced FirsEnergy o preserve and mainain all documensandinformaion relaedo hesameassuch avebeendeveoped aspart ofanongoing auditatisbeing conducted byFERC's Division ofAudits andAccouning, Theoutcome ofanyofthese lawsuits investigations andaudit areuncertain and coudhavea material adverse effect onFE's orits subsidiaries financial condiion resuls ofoperaions andcashflows, No coningency hasbeenrefleced inFirsEnergy's consolidaed financial statementsasa loss isneither probable norisa loss orrange ofa oss reasonably esimabe inernal Invesigaion Relaing o Unied Saes v.Larry Householder e al.
As previouslydisclosed. a commieeofindependen members ofhe FE Board ofDirectors(FE Board) isdirecing an inernal invesigaion related toongoing governmen invesigaions. Inconnecion wih FirstEnergy's inernal investigation suchcommitee deermined on October 29.2020,toterminae FirstEnergy's CiefExecutiveOfficer Charles E.Jones,together with twooher execuives: Dennis M. Chack, Senior VicePresiden ofProducDevelopmen Markeing. andBranding: and Michael J.Dowling, SeniorVicePresiden ofExemalAffairs. Eachofheseerminaed execuives violaed cerain FirsEnergy poicies andiscodeof conduc. These executives wereterminated asofOctober 29.2020. Suchformer members ofsenior managementdidno mainain andpromoe a conrol environmen with anappropriae oneofcompliance incerain areasof FirsEnergy's business norsufficienly promote monitor orenforce aderence o cerain FirstEnergy policies andiscodeofconduc. Furermore. certain former members ofseniormanagemen didno reasonably ensure ha relevan informaion wascommunicaed wihin our organizaion andno wihheld fromourindependent direcors ourAudiCommiee, andourindependen audior. Among hemaers considered wihrespec o he deerminaion byte commieeofindependen membersofheFEBoard thacerain former members of senior managemen vioaed FirsEnergy certain andiscodeofconduc policies relaed toa paymenofapproximaely $4million made in early 2019 inconnecion wih he erminaion ofa purpored consuling agreemen asamendedwhich hadbeeninplace since 2013. The counerpary o such agreement wasanentity associated wit an individua wo subsequently wasappointed toa ful-time roeas an Ohiogovernment official direcly involved inregulating heOhioCompanies, including wih respeco disribuion raes. FirstEnergy believes ha paymens under e consuling agreemen mayhavebeenfor purposes oherhanhoserepresened wihinheconsuling agreemen.
Immediatelyfolowing these terminations, te independent membersofisBoard appoined Mr.Steven E.Strahto te position of AcingChief Execuive OfficerandMr.Chrisopher D.Pappasa curren memberofhe Board,o he emporary posiion of Execuive Direcor.eacheffecive asofOcober 29. 2020,Mr.Donald T Misheff wi coninueo serve asNon-Execuive Chairman of he Boad.
on November Additionally, 8. 2020, Robert P. Reffner, Senior VicePresident and Chief LegalOfficer, and Ebony L.
Yeboah-Amankwah, VicePresiden. General Counsel. andChief Ethics wereseparaed Officer, from FirsEnergy due o inacion and conducta theBoard deermined wasinfluenced byte improper onea te top. Te matter isa subjec of e ongoing interna investigation asitrelates tote government investigations. Additionaly, on February 17. 202, theFE Board appointed Mr.John Somerhalder o heposiions ofViceChairperson ofhe FEBoardandExecuive Direcor ofFE.eacheffecive asofMarch1.2021.
Mr.Misheffwillconinue toserve asNon-Executive Chairman ofheFEBoard andMr.Pappas will coninue o serve on heFEBoard asanindependen director.Mr.Somerhalder will helplead effors o enhance FirsEnergy's repuaion. OnMarch 7,2021. heFE Boardappoined Mr.Seven E.Sraho heposiion ofChief Execuive OfficerofFirsEnergy, effecive asofMarch8,2021. OnMarch 7,202, atthe recommendation ofthe FirstEnergy Corporate Governance andCorporate Responsibility Committee, theFEBoard also eleced Mr.Strah asa Direcor ofFirsEnergy, effecive as ofMarch 8,2021increasing hesize ofheFE Board from11to12 ii i i i '
n -
OherLegal Maers Therearevarious lawsuis, claims (including claims for asbesosexposure) and proceedings relaedo JCP&L's normal business operationspending against JCP&Landits subsidiaries. Te ossorrange ofloss inthese maersisno expecedo bemateria o JCP&Lorissubsidiaries. Theoherpoenially maerial iemsno oherwise discussed above aredescribed under Noe 5,"Regulaory Maers."
JCP&Laccrues legal liabiliiesonlywhenit concludes ha i isprobable thaithasanobligaion for suchcosts andcanreasonably esimae e amounofsuchcoss. Incases whereJCP&Ldeermines ha i isno probabe, butreasonaby possibe ha i hasa Contributed toDocumentCloud byDaveAnderson (Energy andPolicy Institute) View document orread text Next a Warren Buffett doesn't want Unported license.
https://www.energyandpolicy.org/firstenergy-corruption/ 4/6
4/25/2021 Money trail inFirstEnergy corruptionscandal leads outside Ohio Updated onApril 23,2021with additionalinformation disclosed during FirstEnergy earnings call andin related investors materials onFirstEnergy's posted website.
Postedin: FirstEnergy Tagged in:FirstEnergy, Generation Now,house bill 6,Larry Housholder, ohio bribery,ohio corruption Posted byDave Anderson DaveAnderson isthe policy andcommunications manager fortheEnergy and PolicyInstitute.
Davehas been working atthenexus ofclean energy andpublic policysince2008.Prior tojoining theEnergyandPolicy hewasan Institute, outreach coordinator for theclimate and energy program attheUnion of Concerned Heisalso Scientists. analumnus oftheSierra Club andthe Alliance for Climate (now ProtectiontheClimate Reality Project). Dave's research hashelped tospur scrutiny public ofpolitical attacks onclean energy andclimate science by powerful special interests, such asExxonMobiland theAmerican Legislative Exchange Council(ALEC). His workhasbeencited by major media outlets,such asCBSNewsandthe Wall StreetJournal, andhehasserved asa speaker on panels atnational solar industry conferences. Daveholdsa MA inPolitical Science from ofNewHampshire, theUniversity where healso received a BA in Humanities.
G AllPostsG Website Search here. q Next a Warren Buffett doesn't want https://www.energyandpolicy.org/firstenergy-corruption/ 5/6
4/25/2021 trail Money inFirstEnergy scandal corruption leads outside Ohio https://www.energyandpolicy.org/firstenergy-corruption/ 6/6