CLEVELAND (WJW)- The Public Utilities Commission of Ohio Wednesday directed a third-party auditor to investigate whether FirstEnergy has improperly used customer utility rates to fund the company’s naming rights for FirstEnergy Stadium.
Its directive expands the scope of ongoing investigations into the Akron-based utility company, which has admitted to criminal wrongdoing in a state bribery scandal.
In 2013, the Cleveland Browns sold naming rights for the taxpayer-owned football stadium to FirstEnergy in a 17-year, $102 million deal.
The state audit will review whether or not those costs have been recovered from utility ratepayers. The PUCO said promotional advertising cannot be paid for through utility rates.
“Putting their name on a stadium is in no way a benefit to the customer base that they’re supposed to serve,” said Ohio Representative Kent Smith, a Democrat from Euclid, who sent a letter to the PUCO Tuesday calling for the investigation.
Smith and Representative Jeff Crossman, a Democrat from Parma, previously called on Browns owners Jimmy and Dee Haslam and the city of Cleveland to drop the FirstEnergy name from the stadium.
“I just find it honestly heartbreaking the Browns would associate themselves with a company that’s been charged with this kind of criminal wrongdoing,” Crossman said.
Smith cited the company’s 2018 bankruptcy and a settlement with federal prosecutors in the House Bill 6 scheme.
FirstEnergy came under scrutiny after federal investigators said it secretly funded a scheme to win passage of the billion-dollar taxpayer bailout for two of its nuclear plants. The company has admitted to criminal wrongdoing and agreed to pay a $230 million settlement.
The PUCO has four ongoing investigations into the utility company. An audit report it released in August recommended FirstEnergy return $6.6 million to customers because the money was improperly charged to customer utility bills.
“They’re spending $6 million a year to put their name on a football stadium and buy luxury boxes, on frivolous things, when taxpayers and rate payers are paying more money because they need to fund these things,” Crossman said.
Crossman encouraged Browns fans to contact the team about changing the stadium name.
In a statement, FirstEnergy spokesperson Jennifer Young said the naming rights are paid for by the parent company FirstEnergy Corporation and not directly by subsidiary utility companies such as the Illuminating Company and Ohio Edison.
“Customer rates are set based on the cost of doing business, plus an allowable return on our investments and approved by local state commissions. Corporate dollars represent earnings from the company’s operations, which come from the allowable return. The corporation can determine how those earnings are used,” Young said in the statement.
The PUCO said an audit report on its investigations, including into the stadium naming rights, is due Nov. 19.
The Cleveland Browns did not respond to a request for comment.