The company that bought a law owns Lakewood's electric utility

FirstEnergy is a holding company. One part runs the wires, including The Illuminating Company (CEI), which serves Lakewood. Another part, FirstEnergy Solutions, owned power plants, among them the Davis-Besse and Perry nuclear plants on Lake Erie. Wires earn a regulated return. Power plants have to sell into an open market, and by the mid-2010s that market paid less than the nuclear plants cost to run. A federal appeals court later summed up the company's position in 2016 as "dire financial straits." FirstEnergy Solutions was "bleeding cash," and the company wanted a "guaranteed payment" to keep its plants going.¹⁹

It tried other routes first. In March 2016 Ohio regulators approved eight-year deals that would have had FirstEnergy's own customers guarantee its plants' income. A month later federal regulators ruled the deals could not take effect without passing a federal review, and they never went forward.²⁰ PUCO then let FirstEnergy add a new charge to electric bills, the Distribution Modernization Rider, set at $204 million for 2017 and $168 million a year for 2018 and 2019. PUCO's stated aim was to support FirstEnergy's credit rating. The Ohio Supreme Court threw the charge out in June 2019 because nothing required the money to be spent on the grid. Customers did not get back what they had already paid.²¹ A push for federal help went nowhere.¹⁹

On March 31, 2018, FirstEnergy Solutions filed for bankruptcy. Days earlier it had told PJM, the regional grid operator, it would close or sell its three nuclear plants.²² FirstEnergy Solutions left bankruptcy in February 2020 as a separate company, Energy Harbor, which kept the plants.²³ It had also failed to get a bailout from the Ohio House Speaker at the time. What it needed was a different Speaker.¹⁹

By then, Larry Householder had spent more than a year working to become that Speaker. He had been Speaker in the early 2000s, spent a decade out of office, and was elected to the Ohio House again in November 2016. According to the trial evidence as summarized by the federal appeals court in Householder's case, that month he ran into FirstEnergy CEO Chuck Jones at Game 7 of the World Series in Cleveland, and they talked about the company's urgent need for help. Two months later they met again over dinners in Washington, with FirstEnergy's Michael Dowling and Householder's strategist Jeff Longstreth. FirstEnergy pledged $1 million to Householder's run for Speaker. According to the appeals court's summary of the trial evidence, Dowling advised setting up a nonprofit that could take unlimited, undisclosed contributions, and Householder had Longstreth create one, Generation Now. The money arrived in four $250,000 payments over 2017.²⁴ HouseholderJones

The same court opinion describes a meeting at a West Virginia resort in the summer of 2017, where Longstreth briefed Jones and Dowling on the Speaker's race. By the court's account, Jones said: "we have to get Larry in there . . . because I know he won't let anything bad happen to us."²⁵ Jones and Dowling were not on trial in that case. Both have pleaded not guilty to charges of their own, and neither has been convicted.²⁶

HouseholderThe Speaker's chair. In 2018 the operation backed about 21 state House candidates, Householder among them. Most won,³² and in January 2019 Householder became Speaker of the Ohio House.³³

House Bill 6. Signed in July 2019,³⁴ HB6 created a ratepayer-funded subsidy of roughly $150 million a year, scheduled to run from 2021 through 2027, for two nuclear plants then owned by FirstEnergy's generation arm, added coal-plant subsidies, and cut Ohio's renewable-energy and efficiency standards.³⁵ It also guaranteed FirstEnergy's three Ohio utilities a fixed level of yearly revenue no matter how much electricity customers used, through a "decoupling" charge on bills. The appeals court described this as a fixed revenue stream of $20 to $50 million a year through 2024.⁷ Lawmakers repealed it in 2021, and regulators ordered about $27.5 million in collected charges, with interest, refunded.³⁶

Keeping it. When citizens tried to put a repeal on the ballot, the operation spent heavily to stop them, including ads that falsely claimed China was invading the electric grid³⁷ and payments to block or buy off petition circulators.³⁸ The repeal never reached the ballot.³⁹

RandazzoThe regulator. On January 2, 2019, FirstEnergy wired $4.3 million to a consulting company owned by Sam Randazzo. His selection to lead PUCO was announced on February 4, and he took office as chair that April.⁴⁴ The money was an early payout of a consulting agreement that ran through 2024. FirstEnergy later admitted that it had no legal obligation to pay at that time, and that it paid so he would take official action as PUCO chair to further the company's interests.⁴⁵ One example from that admission: in November 2019, PUCO dropped a requirement that FirstEnergy's Ohio utilities, including The Illuminating Company, file a new rate case in 2024.⁴⁶ A rate case is the review in which regulators examine a utility's spending and rates. Randazzo was never tried; see below.

The money was paid through FirstEnergy's service company. In its 2021 admission, FirstEnergy attributed about $16.9 million of it to FirstEnergy Corp. and about $43.1 million to FirstEnergy Solutions, the subsidiary that owned the nuclear plants, which filed for bankruptcy in 2018 and later became the separate company Energy Harbor.⁴⁷

HouseholderLongstrethCespedesOn July 21, 2020, the FBI arrested Householder and four associates on a federal racketeering conspiracy charge.⁸ The case became one of the largest public corruption cases in Ohio history.⁵³ Generation Now itself later pleaded guilty,⁵⁴ and agreed to forfeit its assets, including nearly $1.5 million seized from its bank accounts.⁵¹ Two associates, strategist Jeff Longstreth and FirstEnergy Solutions lobbyist Juan Cespedes, pleaded guilty to racketeering conspiracy in October 2020 and later testified for the government at Householder's trial.⁵⁵⁵⁶ Lobbyist Neil Clark died by suicide in 2021 before trial.⁵⁷

In July 2021 FirstEnergy Corp. was charged with conspiracy to commit honest services wire fraud and signed a deferred-prosecution agreement with federal prosecutors: the government agreed to dismiss the charge later if the company admitted the facts, paid a penalty, and cooperated. In it the company admitted paying millions of dollars to public officials in return for official action, and it paid a $230 million penalty. Half went to the U.S. Treasury and half to an Ohio program that helps low-income customers pay their electric bills. None of it was refunded on ordinary bills.¹⁰⁵⁸ It had already fired its CEO, Chuck Jones, and senior vice president Michael Dowling in 2020.⁵⁹ In 2024 it paid another $100 million to settle Securities and Exchange Commission fraud charges.⁶⁰

BorgesIn March 2023 a federal jury convicted Householder and the fourth arrested associate, lobbyist and former Ohio Republican Party chair Matt Borges, of racketeering conspiracy.⁵² Householder was sentenced to 20 years⁹ and Borges to five.⁶¹ Borges was moved from prison to a halfway house in October 2025 to serve the rest of his sentence.⁶² The Sixth Circuit upheld the convictions in May 2025, and the U.S. Supreme Court declined to hear the appeals in April 2026.⁶³ Householder is seeking a presidential pardon.⁶⁴ A presidential pardon applies only to federal crimes. Householder was also indicted in Cuyahoga County in March 2024 on 10 state felony counts, including theft in office and money laundering.⁶⁵

Randazzo was indicted by federal and state prosecutors⁶⁶ and died by suicide in April 2024, before any trial; the charges against him were dismissed.⁶⁷ His consulting company, the Sustainability Funding Alliance of Ohio, pleaded guilty in the state case in Summit County that December and agreed to give up more than $2.1 million in fines, forfeited money, and restitution. State prosecutors called it a shell company.⁶⁸

JonesDowlingJones and Dowling were indicted by a Summit County grand jury in February 2024, accused of bribing Randazzo,⁶⁶ and by a federal grand jury in January 2025 on a racketeering conspiracy charge.²⁶ Their first state trial ended in a mistrial on April 1, 2026, when the jury could not reach a verdict.⁶⁹ They were reindicted in June 2026 on 22 counts and pleaded not guilty.⁷⁰ Neither has been convicted, and both are presumed innocent unless convicted. As of October 2026 both cases are awaiting trial.⁷⁰²⁶

The largest piece of the bailout, the nuclear subsidy, was never collected. Lawmakers repealed it, along with decoupling, in March 2021.¹¹ PUCO ordered the decoupling charges refunded to customers.³⁶ The coal-plant subsidy was different. Customers of every large Ohio utility, including CEI, paid it from January 2020 until House Bill 15, signed in May 2025 and in effect that August, ended it. The state's consumer advocate put the total at about half a billion dollars.¹² That money went to the utilities that co-own the two coal plants, and it has not been refunded. HB6's cuts to Ohio's renewable-energy and efficiency standards were not reversed.⁷¹

Restitution. In November 2025 PUCO found that FirstEnergy's three Ohio utilities, including CEI, had violated Ohio law, PUCO rules, and PUCO orders,¹³ and ordered them to pay $250.7 million: about $186.6 million back to customers and about $64.1 million in civil forfeitures (penalties).⁷² A settlement PUCO approved in January 2026 built on that order and sent the money to customers rather than to the state as forfeitures: $249 million in bill credits, plus $20 million for low-income bill assistance and weatherization.⁷³ The settlement took the place of the November payment terms; the two figures are not added together. The $249 million was credited over three consecutive monthly bills expected to begin in February 2026. The city put the total at about $65.61 for a customer using 1,000 kilowatt-hours a month.¹⁴

Rates. In a separate rate case decided the same day as the restitution order, November 19, 2025, PUCO cut FirstEnergy's requested $190 million a year distribution rate increase to about $34 million across its three Ohio utilities.⁷⁴ On rehearing in February 2026 it cut a further $39.4 million a year, leaving the three utilities combined with a net decrease of about $5 million a year. The result was not even. Ohio Edison and Toledo Edison rates went down, by about $24.5 million and $29.5 million a year. CEI, Lakewood's utility, was allowed to collect about $48.7 million a year more, effective March 1, 2026.⁷⁵ FirstEnergy's utilities appealed the case to the Ohio Supreme Court in August 2026 (case 2026-1056).⁷⁶ The larger increase CEI is now asking for is a separate, newer case, described in Part 6.

A notice of probable non-compliance is PUCO Staff's conclusion after investigating. It is not a ruling by the commissioners. The 2025 notice ended with a Staff letter accepting corrective actions in place of a fine; the 2026 notice and its proposed fine are still pending.

How the two stories connect. No court or regulator has found that the HB6 scheme caused Lakewood's outages, and this page does not claim it did. The connection on the record is narrower. CEI is owned by FirstEnergy.¹⁵ PUCO regulates it, and FirstEnergy admitted paying $4.3 million to a company owned by the man who became PUCO's chair in 2019.⁶ From 2017 to 2019, FirstEnergy's Ohio customers paid a "distribution modernization" charge that the Ohio Supreme Court struck down because nothing required the money to be spent on the grid.²¹ Under that chair, PUCO dropped a requirement that FirstEnergy file a new rate case in 2024.⁴⁶ PUCO is now deciding how fast Lakewood's equipment is replaced and who pays.¹⁸

Old and near capacity. PUCO Staff counts more than 30 circuits serving Lakewood and surrounding areas in whole or in part (at least 20 serve the city itself, by Staff's 2025 count), fed by substations including Lakewood, Lauderdale, Edgewater, Grovewood, and Freedom. After field visits, Staff described a significant amount of the equipment as seeming older, on the whole, than elsewhere in CEI's territory, and reported that many of the substations shift load to one another when the daily high passes 90°F because of capacity limits.⁷⁷ CEI's own response describes its improvement plan as focused on reducing and retiring its 4 kV system in favor of the more standard 13.2 kV.⁷⁸ Age is not the whole story. Two transformers at the Lakewood substation were installed in 2007, and in October 2025 Staff required CEI to investigate their "premature failure."¹⁶

Warnings before the failures. On September 13, 2024, PUCO Staff sent CEI an earlier notice of probable non-compliance, this one covering its whole territory rather than Lakewood: the average time to restore power to a customer who lost it was about 145 minutes in both 2022 and 2023, against a standard of 135. Staff accepted CEI's action plan and there was no fine.⁷⁹ In December 2024 FirstEnergy asked PUCO to loosen its reliability standards.⁸⁰ Through late 2024 and early 2025, repeated Lakewood outages traced to equipment at the Lakewood and Grovewood substations, and on February 19, 2025, CEI told Staff no large projects were planned there that year.³ A maintenance record CEI filed in its 2026 rate case shows four repair orders opened on Lakewood substation transformer No. 42 between December 11 and 20, 2024, and a fifth on June 2, 2025, three weeks before the summer failures.⁸¹

Summer 2026. On June 24, 2026, PUCO denied FirstEnergy's request to loosen its standards.⁸⁸ The Ohio Consumers' Counsel, not FirstEnergy, then asked PUCO to reconsider parts of that order, and PUCO granted rehearing on August 19. If PUCO does not rule by about November 17, 2026, the June order stands. The second summer of failures began a week after the June order. On June 30 more than 3,000 customers served by the Lakewood substation lost power. Underground cable faults at the Lauderdale substation then cut power to 4,650 customers on July 1 and 3,023 on July 2. On July 3 another cable fault put 1,010 customers out for about 20 hours, and on July 14 the underground feed to the Edgewater substation failed, cutting power to 6,359 customers for about an hour and a half. Staff said storms and high winds were not a factor in most of the outages. Staff inspectors saw lawn sprinklers spraying transformers at the Lauderdale and Dawson substations and called the practice outside industry norms; CEI told Staff it uses them routinely on extreme heat days and considers that standard practice. PUCO received 825 customer contacts about the outages in the week of June 28, nearly the same as the 828 a year earlier.² On July 6 the city asked PUCO to reopen its investigation; four days later PUCO's chair replied that Staff had begun to investigate.⁸⁹ Councilman Tom Bullock then ran an online survey that drew nearly 300 responses. Among those who answered, the typical outage lasted 12 hours and some lasted 48, 70% had to replace food or pay to eat out, and 28% reported health effects or dangerous risks.⁹⁰

The second notice. On August 7, 2026, Staff sent CEI a second notice of probable non-compliance and proposed a $3,049,750 forfeiture (a fine), along with new corrective actions, including replacing by the end of 2027 any equipment that failed while running above its designed peak load, delivering a replacement schedule for all of Lakewood's distribution equipment by the end of 2026, and producing a plan to replace all the underground lead cables serving substations in and around Lakewood.⁴ CEI answered that its long-term strategy is "not to replace all existing infrastructure on a like-for-like basis" and promised Staff an overall plan by December 31, 2026. It said it "does not recommend replacing the underground lead cables between Clinton Substation and Lauderdale Substation due to the cost and time required to replace" (six circuits, about 34.5 miles of cable). It also recommended that the money for the proposed forfeiture be invested in the Lakewood system instead of going to the state treasury, where it said the money would "not directly benefit the customers who experienced the outages."⁷⁸

At a Crain's Cleveland Business event in August 2026, FirstEnergy CEO Brian Tierney said of Lakewood's grid, "It's too old. It's not reliable. It's at capacity, and that system needs to be replaced," and said replacing it will take seven to nine years, according to the mayor's account of his remarks.¹⁷ The mayor wrote that CEI's August 21 written response to PUCO is less explicit about the scope of the problem and the time needed to fix it.¹⁷

What FirstEnergy says. In its August 21 response to Staff, CEI said its plan differs from the notice: Staff's corrective actions focus on "renewing the system in its current configuration," while CEI plans to retire the old 4 kV system in favor of 13.2 kV, so that it is not "simply replacing aging infrastructure with facilities of similar design."⁷⁸

The letter in your mailbox. In September 2026 Lakewood households received a letter from the president of FirstEnergy Ohio, Torrence Hinton, apologizing for the outages and listing work done and underway.⁹¹ We checked it against the PUCO record. Nothing in it contradicts that record, but it leaves out most of what the record says.

The letter as mailed, with our notes in red. Select a page to open it full size.

• What checks out. The first of two new transformers at the Lakewood substation is in service, and the second is due to be energized by the end of the year. Both are ahead of the deadlines PUCO Staff set: the end of 2026 and the second quarter of 2027.¹⁶ The "49 circuits" reviewed matches what CEI told PUCO Staff in August.⁷⁸
• What is a requirement, not a favor. The transformers and the smart meters, due by the end of 2026, are corrective actions that followed PUCO Staff's 2025 notice.¹⁶ The letter presents them without saying so.
• What raises a question. The letter says crews began thermal imaging "this month." PUCO Staff's October 2025 letter called for a visual or thermal imaging inspection of Lakewood's pole equipment by the end of 2025.¹⁶ The letter also says outside engineers were brought in, without naming them or promising their report.
• What we could not check. Four breakers replaced, work at "nearly 170 poles" since October 2024, and "nearly 54 miles" of tree trimming do not appear in the PUCO documents we have.
• What it leaves out. PUCO Staff's two notices of probable non-compliance and the proposed $3,049,750 forfeiture;⁴ the lead cables CEI does not recommend replacing;⁷⁸ the seven to nine years its own CEO has said a rebuild will take, by the mayor's account;¹⁷ and the rate increase now before PUCO.

What the weather data shows. This site compared 11 summers (2015 to 2025) of Cuyahoga County outage records with Cleveland Hopkins weather.⁸² In that data, outages rise on hot days even with storm days removed, and warm nights, when equipment cannot cool off, are the strongest signal. The nine Lakewood failure days described in PUCO Staff's 2025 and 2026 notices fell on some of the warmest nights of each summer, as the chart below shows.¹²⁸² The outage data is countywide, not Lakewood only, and a correlation does not prove a cause. It is consistent with what the company and Staff have said: CEI told Staff that equipment age could have been a factor in several of the 2025 failures,¹ and Staff found in 2026 that substations serving Lakewood must shift load on days above 90°F because of loading and capacity limits.²

CEI's Three-Year Rate Plan (PUCO Case 26-0347-EL-AIR). This case decides how much CEI may collect and what it must build with the money. The City of Lakewood moved to intervene on August 20, 2026. The deadline to intervene passed on September 29, 2026; residents can still file public comments and testify at the local public hearings. The PUCO Staff Report is due November 30, 2026. The formal hearing, with lawyers and expert witnesses, begins March 1, 2027 in Columbus. Local public hearings, where any resident can speak, have not been scheduled yet. If PUCO has not ruled within 360 days of July 1, 2026, the date the application was found complete, the plan is deemed approved automatically under state law. That date is about June 26, 2027.¹⁸

What the filing says about Lakewood. Asked in his written testimony whether the plan addresses Lakewood, CEI's president, Torrence Hinton, answered yes: the outages were "primarily due to equipment failures," and in early 2025 CEI began "a comprehensive reliability improvement plan," including "replacing or repairing transformers and breakers." He referred the details to another witness, Mark Josef.⁹² Josef's testimony does not mention Lakewood. It describes company-wide spending categories, including $276.9 million for equipment failure or damage across CEI over three years, without locations.⁹³ We searched the rest of the company's filing and found no Lakewood project, schedule, or dollar amount.⁹⁴ Some of that money may well be spent in Lakewood; the filing does not say how much, or on what. The same Torrence Hinton signed the September 2026 letter to Lakewood households described above.⁹¹

The second Lakewood notice. Staff has the next move on three things: the changes CEI proposed to the corrective actions, its position against replacing the Clinton to Lauderdale lead cables, and its recommendation that the proposed $3,049,750 forfeiture be invested in its Lakewood system instead of paid to the state treasury. CEI's response does not say whether customers would later be charged for that spending through rates. As of the mayor's September 25 letter, PUCO was still weighing CEI's response.¹⁷ CEI has proposed its own dates. By October 31, 2026 it says it will inspect the accessible cable in the remaining 139 of 153 manholes on the Clinton to Lauderdale lines (Staff had asked for September 4), review the age and expected remaining life of the equipment serving Lakewood, and determine whether the equipment that failed this summer was overloaded. By December 31, 2026 it says it will give Staff an overall plan for what will be retired, replaced, or upgraded, and it says it is on track to complete the five corrective actions still open from 2025.⁷⁸

The reliability standards (Case 24-1112-EL-ESS). On June 24, 2026, PUCO denied FirstEnergy's request to loosen its standards. The Ohio Consumers' Counsel, not FirstEnergy, then asked PUCO to reconsider parts of that order, and PUCO granted rehearing on August 19. If PUCO does not rule by about November 17, 2026, the June order stands.⁸⁸

An interim plan. On September 25, 2026, the mayor asked PUCO to explore additional requirements for FirstEnergy, saying the company should commit to an interim emergency-capacity plan, such as emergency generators placed near Lakewood, to cover the seven to nine years its CEO said the rebuild will take. PUCO has not acted on the request so far.¹⁷