Neal Wellons / Creative Commons

An industrial site in Cleveland.

Advocates say industrial lobbyists play outsized role in blocking Ohio clean energy

Ohio lawmakers may be relying upon an industrial energy lobbying group more than they should, a watchdog group suggests after reviewing emails between lobbyists and legislators.

Industrial Energy Users-Ohio is an organization made up mostly of large manufacturers that has opposed expanding the state’s clean energy standards in recent years. The group wants more opportunities for customers “to control their own destiny… rather than having central planning and government mandating things,” said chief counsel and lobbyist Sam Randazzo, when asked last month about the group’s priorities for this legislative session. “And that manifests itself in a variety of ways, whether we’re talking about portfolio mandates or re-regulation or whatever.”

While it’s common for any lobbying group to provide input on regulatory or legislative action, the San Francisco-based Energy & Policy Institute has questioned whether Ohio lawmakers might give too much deference to IEU-Ohio.

“We now know that, in 2016, Senator [Bill] Seitz and his staff regularly consulted Sam Randazzo for bill language,” the institute’s Dave Anderson said last week when he provided copies of emails received in response to a recent public information request. The bill in question would have made any higher targets under Ohio’s renewable energy and energy efficiency standards unenforceable for at least two more years.

In response, Randazzo downplayed concerns that his group plays an outsized role in energy policy discussions, stating he’d be “happy to hear” if that were the case.

Close consultation

Among other things, emails show that a legislative aide for Seitz — a Cincinnati Republican who now serves in the state House and has led the attack on clean energy standards — contacted Randazzo for input at least two months before Senate Bill 320 was introduced last year.

Specifically, the aide wanted Randazzo to highlight items from an earlier bill that were not included in a 2014 law that weakened the state’s clean energy standards and froze them for two years. The email suggested those could be included in the 2016 bill.

Randazzo responded with “initial thoughts” on Feb. 19, 2016. A follow-up email in April suggested language for counting efficiency improvements by the affiliated generating plants of utilities. Those materials were apparently used by Seitz’s office in preparing SB 320. Additional emails followed through the rest of the legislative session.

Lawmakers can be expected to talk with lobbyists for different groups in the course of preparing bills and as proposed legislation is debated.

“On a very practical level most legislators will have good relationships with people on both sides of the issues,” Randazzo said last month. Energy policy, in particular, “can be complicated for legislators who are more or less generalists,” he added.

However, Anderson suggested IEU-Ohio might have “undue levels of influence over the state’s legislature in Ohio.” Anderson notes that Seitz copied Randazzo on a 2015 email suggesting that some committee members charged with doing a cost-benefit analysis of Ohio’s energy standards meet “as a small group to figure out what the report is going to say.”

Randazzo said in response to Anderson that he would be “happy to hear that I have undue influence.”

As someone representing a client, he would not have been acting improperly in responding to a lawmaker’s request for input. Yet while representatives of FirstEnergy, American Electric Power and Duke Energy were also copied on the Aug. 18, 2015 message, no members of environmental groups or from the solar or wind industry were copied on the email.

When the lawmakers’report came out six weeks later, it recommended an indefinite suspension of the renewable energy and energy efficiency standards without any discussion of the benefits for health, the environment or business.

House speaker Cliff Rosenberger (R-Clarksville) has also named Randazzo to serve on his behalf on the committee to nominate members for open seats on the Public Utilities Commission of Ohio.

In that position, Randazzo voiced concerns about nominating Howard Petricoff, a Democrat. Although Petricoff was appointed by Gov. John Kasich, he resigned in December when it appeared he might not be confirmed by the Ohio senate.

Specifically, Randazzo had noted that Petricoff might need to recuse himself from some cases involving wind energy because he had previously done work for wind farms.

However, Anderson said, other nominees also had ties to energy interests, such as the natural gas industry. “It’s hard to find someone as nominee for PUCO these days who doesn’t have ties to someone in the industry,” he observed. “That’s part of what makes them qualified for the job.”

Anderson stressed that Randazzo’s position on the PUCO nominating committee seemed “like a really unusual role for someone who’s a registered lobbyist representing industry that also has other ties to anti-wind groups and such.”

Randazzo responded that anyone questioning his role on the PUCO nominating committee “really doesn’t understand what the nominating council does.”

“I act as an agent of the speaker,” continued Randazzo, noting that the committee has 12 members with equal votes and that he has previously been appointed to serve by both Democrats and Republicans. In this case, he noted that he was not representing IEU-Ohio or any other client, and that, “The speaker ultimately provide[d] guidance on how he or she wants me to act on the nominating council.”

This year’s agenda

Much of the General Assembly’s attention during the first half of this year will focus on the state’s budget, Randazzo said last month. In his view, that will likely make it harder for lawmakers to pass more controversial energy bills dealing with re-regulation or other matters within the next few months.

“People keep saying we need a comprehensive energy policy,” Randazzo said. “Well, we keep saying that and we don’t seem to get any further on really important things.” He also expressed skepticism about “politicians who think ‘all of the above’ is something that’s capable of being implemented.”

On the regulatory front, Randazzo defended the fact that industrial customers generally pay lower unit prices compared to residential consumers.

“Industrial customers will always have a lower average price per kilowatt-hour than residential customers because they have higher load factors, which means that they’re using electricity at a more stable rate during on-peak and off-peak periods,” Randazzo explained.

Industrial customers also tend to take electricity from the utility “at relatively high voltage,” Randazzo added. “There is a cost associated with distribution that is typically not relevant in the case of large manufacturers.”

Many of the group’s members participate in demand response programs, Randazzo noted. Additionally, “all of our members are engaged in some effort to reduce their energy intensity, because they’re trying to compete in the global economy for the most part.” Some members also have behind-the-meter wind and solar installations, he added.

In both 2014 and 2016, though, Randazzo testified in favor of moves to weaken and suspend the state’s clean energy portfolio standards. In his view, those kinds of moves are not discouraging growth of renewable energy “as much as leaving it up to customers to decide how to spend their money.”

While Ohio’s clean energy industry has complained that the state’s repeated efforts to weaken and change the standards have put Ohio at a disadvantage compared to other states, Randazzo said that when everything is considered, including federal tax programs, “Ohio has done a great job.”

One thought on “Advocates say industrial lobbyists play outsized role in blocking Ohio clean energy

  1. Randazzo and IEU represent about sixty or seventy industrial clients. Five or six of them have received over $200 million per year in special rate discounts which are paid by other electric customers under Ohio law. I don’t know the current status of these subsidies, but one company was mentioned in a Wall Street Journal article as having received $346 million in the four years before it declared bankruptcy. Ormett Aluminum.

    Randazzo spent five years agitating in Ohio for deregulation. In 1998, when the legislature caved in, he got his SB 3. within two years 15% of his clients were out of business in Ohio, for the simple reason that he forgot to warn them that they were getting discounted rates, and the deregulation law eliminated the utility’s responsibility to continue the discounts. The six companies who have been getting subsidies more recently went to the Ohio legislature with their wet hankies in hand to get a new law to make it possible for them to get new subsidies.

    This entire process is far too secretive, and the discounts are grossly disproportionate to the jobs retained (few if any are created by the subsidies). It is more money in most years than Ohio’s statewide clean energy standards cost. And it is likely that some or all of the costs of these subsidies are hidden in the riders which are supposedly paying for efficiency and renewables programs, thereby making Senator Seitz responsible for much of the cost he likes to rant about.