FirstEnergy bribery scheme sank Lake Erie offshore wind, lawsuit says

Six years ago, it seemed like the Midwest was well on its way to building the first offshore wind farm in the Great Lakes. Then the project withered on the vine — and a civil lawsuit puts the blame on utility FirstEnergy’s bribery scheme in Ohio.

That corruption scandal is best known for leading to the 2019 passage of House Bill 6, a law that gutted the state’s clean energy standards and forced consumers to pay nearly half a billion dollars in subsidies for uneconomical coal plants.

But the bribes also led to a regulatory decision that effectively killed the Icebreaker wind farm proposed off Cleveland’s shore, claims the lawsuit filed in July by Lake Erie Energy Development Corp. — the nonprofit that spent more than a decade trying to launch the clean energy project.

The group, known as LEEDCo, zeroes in on FirstEnergy’s bribes to Sam Randazzo, who formerly headed both the state’s Power Siting Board and Public Utilities Commission. LEEDCo argues that those payments led to a 2020 ruling that imposed unworkable restrictions on when the Icebreaker project’s turbines could operate. By the time the restrictions were revoked, funding for Icebreaker had collapsed. The nonprofit is suing FirstEnergy for monetary damages that could top $10 million.

Icebreaker ​“represented a generational opportunity for the region,” said Jay Kelley, managing partner at Elk & Elk and one of the lawyers representing LEEDCo. ​“It would have positioned Cleveland as a national leader in offshore wind, created a new advanced-manufacturing supply chain, supported jobs, and strengthened the region’s climate-resilience and economic-development goals.”

How Icebreaker got put on ice

The Icebreaker demonstration project called for six turbines to be built approximately 8 miles northwest of Cleveland. Although relatively small, its roughly 20 megawatts of clean electricity would have been enough to power thousands of homes. Just as important to LEEDCo was proving that offshore wind generation was feasible in the freshwater lake. If so, proponents in the public and private sectors hoped to leverage the region’s strengths in engineering, steelmaking, maritime, and other fields to help the sector take off.

“The big dream was to build an industry here,” recalled Lorry Wagner, who served as LEEDCo’s first executive director until he retired in late 2019.

By that time, the organization had spent millions of dollars on offshore wind studies, and it had lined up the developer Fred. Olsen Renewables to build Icebreaker once approvals came through. In 2018, the project cleared the federal government’s environmental review process. LEEDCo was also deep into discussions with several Ohio agencies and had applied for a permit from the Ohio Power Siting Board.

By May 2019, LEEDCo had agreed to various permit conditions supported by the Power Siting Board’s staff, two environmental groups, a trade association, and a carpenters’ union. After a hearing that autumn on the fairness of that settlement, the project’s only remaining hurdle was to get the board’s final approval.

When that ruling finally came in May 2020, the board, led by Randazzo, imposed a whole new condition: Every night from March through December of each year, Icebreaker’s turbines would have to ​“feather,” or shut down.

“When it came out, everybody was shocked,” Wagner said.

LEEDCo appealed to the Power Siting Board to remove the restrictions. A bipartisan group of 32 lawmakers urged Randazzo to reverse the ruling. Republican Gov. Mike DeWine’s office fielded similar complaints. The board finally removed the ​“poison pill” provision in October 2020, although Randazzo remained highly critical of Icebreaker.

By then, however, Fred. Olsen had withdrawn from the project. According to LEEDCo, that loss of both funding and technical expertise meant it could no longer meet its obligations for a grant from the U.S. Department of Energy. When the Ohio Supreme Court later upheld the permit without the ​“poison pill” in 2022, LEEDCo still didn’t have new funding. On Dec. 8, 2023, LEEDCo said it was freezing Icebreaker.

What was FirstEnergy’s role?

Just a few days before LEEDCo paused Icebreaker, the federal government indicted Randazzo on criminal bribery, fraud, and conspiracy charges related to HB 6 and other matters. He also faced criminal charges from the state of Ohio and the prospect of losing his law license.

FirstEnergy admitted in 2021 that it paid $4.3 million to one of Randazzo’s companies shortly before Gov. DeWine nominated him to lead the Public Utilities Commission. According to that federal court filing, the payment was in return for Randazzo taking official action on HB 6, along with ​“other specific FirstEnergy Corp. legislative and regulatory priorities, as requested and as opportunities arose.”

LEEDCo claims that stopping the Icebreaker project fell into the general category of other opportunities in which Randazzo furthered FirstEnergy’s interests. The nonprofit alleges in its filings that FirstEnergy thought competition from the Icebreaker project would cost its subsidiaries more than $5 million in lost revenue per year.

LEEDCo wants the Cuyahoga County Court of Common Pleas to make FirstEnergy pay monetary damages to make up for the alleged wrongdoings: interference in LEEDCo’s contracts and business relations, along with corruption and conspiracy in violation of Ohio law.

“Pursuing relief is not only justified — it is necessary to make LEEDCo whole for the years of investment, planning, and opportunity lost,” Kelley said, adding that when wrongful conduct delays or derails a project like this, it doesn’t just hurt one company. ​“It holds back an entire region’s ability to compete and innovate.”

FirstEnergy asked the court to dismiss the case in August, arguing that LEEDCo’s allegations are based on insufficient evidence and that too much time has passed since the alleged wrongdoing. FirstEnergy spokesperson Jennifer Young said the company has no further comment beyond its case filings.

LEEDCo filed its brief against the motion to dismiss in October. Judge Cassandra Collier-Williams has scheduled the next case conference for late January.

If the case moves ahead to pretrial fact-finding, called discovery, LEEDCo will gain access to various FirstEnergy documents, and the nonprofit’s lawyers will be able to question people under oath. But LEEDCo may need to make its case without testimony from some key witnesses.

Randazzo died in April 2024, so he can’t testify about his arrangements with FirstEnergy or any documents concerning Icebreaker. Randazzo forwarded at least one Icebreaker-related document to himself, using an email connected to one of his companies that received money from FirstEnergy.

The Fifth Amendment would likely protect former FirstEnergy executives Chuck Jones and Michael Dowling from making statements that could be used as evidence against them in criminal cases. FirstEnergy’s lawyers identified Jones and Dowling as people who paid the bribes in the HB 6 scandal. The two men still face charges in state and federal court.

Icebreaker, for its part, has changed hands.

Maryland-based developer Mighty Waves Energy, which is not part of the lawsuit against FirstEnergy, acquired the remaining permit rights for the project last year and is working on meeting the Power Siting Board’s preconstruction conditions. But even if it can do that and get enough people to agree to buy the project’s power, Mighty Waves may well face headwinds, including high interest rates and the Trump administration’s persistent attacks on renewable energy.

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