Company to build transmission lines in Loudoun has history of legal problems 

Second company under investigation 

By Audrey Carpenter

Sam Randazzo turned himself into authorities last month. He is the former chair of Ohio’s Public Utilities Commission which regulates utility service providers, including companies that supply electricity to consumers.

Randazzo, 74, of Columbus, self-surrendered in the U.S. District Court in Cincinnati Dec. 4 to the FBI, which has been investigating a $60 million bribery scheme involving FirstEnergy related to a legislative bailout for two Ohio nuclear power plants. The investigation resulted in a 20-year prison sentence for former Ohio House Speaker Larry Householder, a five-year prison sentence for Republican Party Chair Matt Borges, the firing of FirstEnergy’s CEO Chuck Jones and Vice President Michael Dowling, and a $230 million government fine assessed against FirstEnergy.

Most recently, Ohio Gov. Mike DeWine and Lt. Gov. Jon Husted received subpoenas for a civil lawsuit on Nov. 17 seeking any communications the politicians may have had with FirstEnergy, executives named in the lawsuit or Randazzo. Husted is scheduled to be deposed in that case between Feb. 28 and March 19, 2024.

Gov. DeWine appointed Randazzo to head the Public Utilities Commission on Feb. 4, 2019. Randazzo resigned in November 2020 after FBI agents searched his condominium and FirstEnergy publicly acknowledged as part of a settlement agreement to avoid prosecution that it had made a bribery payment of $4.3 million to Randazzo in December 2018.

The FirstEnergy scandal has been dubbed “the largest corruption scandal in Ohio history” and resulted in one individual charged in the case committing suicide.

FirstEnergy, headquartered in Akron, is comprised of 10 affiliate companies involved in the distribution, transmission, and generation of electricity, as well as energy management and other energy-related services affecting six million customers within Ohio, Pennsylvania, West Virginia, Virginia, Maryland, New Jersey, and New York.

See FirstEnergy’s agreement to resolve the Justice Department’s investigation here: https://firstenergycorp.com/newsroom/news_articles/firstenergy-reaches-agreement-to-resolve-department-of-justice-i.html#:~:text=Under%20the%20three%2Dyear%20deferred,all%20terms%20of%20the%20agreement.

See Randazzo’s indictment here: https://www.justice.gov/usao-sdoh/pr/grand-jury-indicts-former-state-public-utilities-chairman-federal-bribery-embezzlement#:~:text=CINCINNATI%20%E2%80%93%20A%20federal%20grand%20jury,Court%20in%20Cincinnati%20this%20morning.

How is this connected to Loudoun County?

The Ohio scandal and fallout is cause for concern in Loudoun County. FirstEnergy is one of two companies that was approved Dec. 11 by the PJM Interconnection Board of Managers, a regional transmission organization, to build the MidAtlantic Resiliency Link (MARL), referred to as Project 853.

MARL is a controversial electrical transmission project that would build 130-miles of 500-kilovolt (kV) transmission towers and lines from Southwestern Pennsylvania, through West Virginia and Maryland to Virginia, along with a new 500/138-kV substation. 

MARL must get final approval from Virginia’s State Corporation Commission, as well as other involved states, before construction can begin. If the SCC gives the green light, it’s anticipated the project would begin emitting electricity by 2027 to satisfy increased regional demand.

The project has received wide scale criticism from homeowners, farmers and conservationists many of whom spoke at a December meeting of the Loudoun County Board of Supervisors intended to receive public comment on the zoning ordinance. However, the Board received feedback about the proposed transmission line construction in Western Loudoun and ongoing data center development throughout the county.

FirstEnergy was also an owner of the Potomac-Appalachian Transmission Highline (PATH) project, a proposed 290 mile 765 kilovolt electric power transmission line designed to supply power from the Amos Substation in Putnam County, W.Va. to a proposed electrical substation to be constructed in Frederick County, Md. 

PATH was ultimately defeated in 2011 and never built, but the companies involved in the planning of the project were reimbursed a total of $250 million by consumers for pre-construction costs, land and easement purchases, legal fees, lobbying efforts, public relations, accumulated interest and the like, fees allowed by the Federal Energy Regulatory Commission, but vehemently criticized in a Dec.19 meeting by one of its own Commissioners as being “ridiculously generous” to utility companies with a call for revision of its “incentive policy” that accommodates energy contractors. 

Second company under investigation

As if all that weren’t enough, the second company involved in the MARL project, NextEra Energy, headquartered in Juno Beach, Fla., is now being sued.  

On Nov. 8, the law firm of Bragar, Eagel & Squire P.C., based in New York City, said it is investigating potential claims against NextEra Energy on behalf of long-term stockholders following a class-action complaint that was filed against NextEra. 

The lawsuit, filed by a group of investors who purchased securities in NextEra Energy, focuses on NextEra’s subsidiary, Florida Power & Light Company. Former Florida Power & Light Company CEO Eric Silagy is alleged to have sold 62,480 shares of the utility’s stock in December 2021 under suspicious circumstances, the largest number of shares he had bought or sold since becoming an officer for the company in 2012. Silagy made a profit of $5.4 million on the sale of his stock.

According to the suit filed in the federal Southern District of Florida, “The company made false and misleading statements to the market. NextEra’s subsidiary, Florida Power & Light Company, engaged in misconduct aimed at politicians and journalists that opposed it. The company denied this misconduct despite the fact that the actions of its subsidiary put it at risk of legal and reputational damage. Based on these facts, the company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about NextEra, investors suffered damages.”

The suit names NextEra Energy, former Florida Power & Light CEO Silagy, former NextEra Energy CEO James Robo and Chief Communications Officer David Reuter, as defendants.

The law firm is seeking long-term stockholders of NextEra Energy to come forward, share information and sign on as plaintiffs to the lawsuit. More information about the investigation/lawsuit can be read here: https://www.bespc.com/cases/NEE.

On Jan. 5, 2023 NextEra announced Silagy would retire with Armando Pimentel replacing him. Silagy’s last day was May 15. The same day that NextEra Energy announced Silagy’s departure, the company acknowledged political scandals in a notice sent to its investors which revealed alleged violations of federal campaign laws as the basis of a complaint filed against NextEra with the Federal Elections Commission.

NextEra Energy Transmission MidAtlantic, LLC, a subsidiary of NextEra Energy Transmission, LLC, will finance, develop, construct, own, operate and maintain the MidAtlantic Resiliency Link. 

“It’s scary to know the companies selected to move forward with the MARL project in Virginia are the same companies that have had serious bribery convictions, lawsuits and questionable political influence associated with them. The fact that PJM would continue to do business with FirstEnergy and NextEra by awarding them approval for transmission construction projects is a huge cause for concern. This is not good for Virginia and the Virginia State Corporation Commission needs to evaluate the MARL project through this lens while reviewing any projects in our state,” said a source who spoke on the condition of anonymity.