City Council - Regular Meeting

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All right, we will call Committee of the Whole to order. So first, I will move to approve the minutes of the June 15 Committee of the Whole without the necessity of a reading.

Second.

Motion's been made and seconded. Discussion? Hearing none, all those in favor? Aye.

And that motion passes.

We have one item on the docket tonight, which is the communication that I submitted outlining the timeline of litigation with First Energy and also setting us up for tonight's discussion with the law department to provide us an overview of those legal matters addressing the First Energy's failure to provide reliable electricity and accurate and timely communication. And then, so tonight, thank you all for being here, members of the public. as well. Tonight you'll hear some of the steps that have already been taken. So those are a little bit complicated. I think sometimes they're almost set up to be intentionally complicated to make it harder for us to hold the utility companies accountable. So we'll be hearing about those as well as asking our law department some questions about potential next steps. Some of those questions, I intend to have as much of the conversation as possible in the public because part of the whole reason for doing this is to help all of us understand and help all of our neighbors understand the legal process that we've taken and what we can do some of that we will have to have an executive session to preserve the public interest because it will be with our legal counsel so as much as possible though we'll have in front of in front of all of you we're also joined tonight by members of the office of ohio consumers council so thank you for being here with us jp blackwood and tom broadbeck we'll be hearing from them after we hear from the law department And I just want to point out before we get started that this is an ongoing effort. It's been over a year since Mayor George and I and Rep Rater and Councilman Casey met with First Energy representatives. about what steps they were going to be taking. And were it not for the legal action that the city has taken, we wouldn't be seeing any progress. And I know that most of us aren't experiencing a lot of progress. Today, I did hear back from our first energy rep about some of the improvements that have been taking place that they are working on. Of course, everything right now, instead of trust but verify, it's a little bit more in the just verify stages. But they are being asked to make these changes, ordered to by the Public Utilities Commission of Ohio. And then we also want to be diligent in our duty to making sure that we are following up on them as well. So that's the plan for tonight. We'll have the presentation. Council members will be asking questions, I'm sure, of both entities, and then we will take public comment. So if you haven't already signed in for public comment and you would like to, you may do so at any time before then. I'll also call for anyone else who would like to make public comment who hasn't yet signed in. Oh, yes, they already pulled it up, but we'll put it back. Thank you. Our clerks are very efficient, sometimes too efficient.

All right.

So you can go ahead and sign in on that. And with that, I'm going to turn it over to Mayor George. Do you want to make some preliminary remarks?

Yeah, thank you. Thank you, Council President. We appreciate the opportunity to provide some ongoing updates on our efforts to hold First Energy accountable and to do everything we can to push for safe, reliable power in Lakewood. We appreciate the partnership of City Council on this very important issue. I also want to emphasize that we all appreciate the voices of our residents and the people who showed up here today. This is an all hands on deck effort and we continue to work together to hold First Energy accountable for their failing infrastructure. This is a statewide issue that we are being forced to confront here locally. We are fighting a multi-billion dollar corporation that rather than put money into the aging infrastructure in Lakewood and across the state, instead put its dollars into bribing the Speaker of the House and other public officials. Lakewood has been pursuing an aggressive, multi-faceted, and creative approach to apply pressure to First Energy. Over the past two years, the city of Lakewood has been the leading municipal actor pushing first energy. We're actually getting calls from other municipalities asking for our playbook on this issue. With our approach, we've had meaningful upgrades required of First Energy. We have gotten PUCO to order First Energy to make significant investments in Lakewood's power infrastructure. First Energy is required to install new large transformers at the Athens substation. They are required to inspect every pole and line within the city. and are required to improve communications, as well as install smart meters citywide. We also formally intervened in First Energy's reliability case and had PUCO side with the city in denial of those relaxed standards. We continue to press things with First Energy and have filed a new complaint to investigate this summer's outages. We are demanding financial penalties for First Energy as part of our new complaint. which includes significant direct fines to First Energy, refunds of payments to ratepayers, and other creative options such as the creation of an escrow system that would withhold all ratepayers' utility payments until the issues in Lakewood are fully resolved. But we know we need to keep fighting. This is a life or death issue for thousands in Lakewood and a quality of life issue for us all. People with health challenges, those that need oxygen, medications, and in-home support, they all need safe, reliable power. Many have lost hundreds of dollars in spoiled food when our refrigerators lack power for days on end. Many of our small businesses have suffered major losses when forced to close their doors for days and lost tens of thousands in sales. The list goes on and on, and many of you here today have stories to tell as well. Given the chronic failures of First Energy, we are looking at creative and alternative options. We've had multiple conversations with Cuyahoga County about the potential for microgrids. And we've reached out to other regional partners to gather insights on possible paths forward. We believe we have a good action plan, but we are still listening and welcome all ideas from our partners here on city council, from our trusted experts, and from you in the community. Now I want to turn things over to Law Director Vargo, who's going to go over things in detail and answer specifics.

Thank you, Mayor George, President Keppel, and members of council. With me is Jen Swallow and Jeff Crossman of the law department. All three of us have been working closely together for the better part of a year to pursue a legal strategy against First Energy to address the deficient infrastructure in Lakewood. We started with meetings with the mayor. The mayor convened meetings with the law department, instructing the department to do research and to develop a legal strategy to confront First Energy. This followed the summer outages last year in June, the unacceptable outages.

Yes?

Can everybody hear me OK? OK. That's OK. Those outages of last summer affected over 13,000 residents in the city, and it led to aggressive thoughts and strategies from the law department. We met with every department head and individuals in the departments to understand the impact of these outages on city services, but even more importantly, to understand the impact on our residents and our small businesses. We collected data on the impact, and we set a legal strategy. That strategy centered on assuring the city that we get improved infrastructure, equipment upgrades from First Energy. That was the strategy. That was the remedy sought. We went before PUCO. PUCO is a regulatory body that you go in front of when you want to seek equipment upgrades from a regulated utility. You do that because, by statute, utility companies are required to provide safe, reliable services. There's a statutory requirement on this business to do that because of their natural monopoly status. And because of that statute, it gives PUCO the authority to order the remedy of improved equipment. And that's why we pursued this with PUCO, and we continue to do so. As part of the strategy, the comprehensive strategy on June 27 of last year, the mayor filed a petition with PUCO demanding a formal investigation into the chronic infrastructure failures. The mayor demanded enforcement of the statutory duty of reliable energy for the people of Lakewood. And again, the focus was always on mandating equipment upgrades. Within one week, the commission, the regulatory commission responded to the mayor's petition indicated that the Pucco staff has opened an investigation into the outages. That investigation occurred and it was not a run of the mill investigation. It was done by technical people staffed at Pucco and the investigation was quite thorough, very technical engineering based. As a result of that investigation, four weeks later, four weeks after the complaint filed by the city of Lakewood, PUCO issued a notice of probable noncompliance to First Energy. And again, that's the regulatory commission telling First Energy, you are not complying with your statutory duty to provide reliable energy to the people of Lakewood. The commission made some key findings after or based on its investigation. First of all, the Commission determined that the outages were caused by failed equipment and lines, not necessarily storms. Next, PUCO found, and this is the most disturbing for everybody in Lakewood, that Lakewood has significantly older infrastructure than most of the areas in the service area of First Energy. How that came to be, we don't know. By statute, First Energy has to file with PUCO the performance of its circuits throughout its performance area. Lakewood consistently, over a period of years, was identified as having the worst performing circuits. Some of our circuits were in the worst 8% performing circuits of First Energy. Under the reports, First Energy was required to file with PUCO. PUCO also found that there were substantial communication failures by First Energy, as all of us know too well. PUCO cited the statutory violations in its notice. Most importantly, PUCO compelled corrective measures by First Energy. This is the equivalent of affirmative injunctive relief. The city of Lakewood filed a petition with PUCO in the form of the mayor's petition and achieved in one month, or in two months from the notice, or from the petition, this affirmative injunctive relief. And here's what it was. Number one, as the mayor indicated, First Energy is required to install two new transformers in the Lakewood substation. The first was delivered in June, just last month, The second one, we understand, is due to be delivered in September. They will be installed, and under the order of PUCO, they have to be up and running smoothly by the second quarter of 2027. These transformers cost several million dollars each. First Energy has plenty of money. But but for this order from PUCO, these important transformer upgrades would never have occurred. Number two. PUCO required First Energy to investigate the root causes of the failures of those transformers to make sure it was not system-wide or something in the system that caused them to fail, but to make sure the transformers had unique defects that could be remedied simply by bringing new transformers in. Next, the Commission required First Energy to perform inspections on all the pole equipment throughout the City of Lakewood. just like the mayor referenced earlier. Also, First Energy was required to complete their smart meter application throughout the city by the end of this year. Those smart meters are important because it gives instantaneous notice to First Energy of an outage. And again, First Energy was required to overhaul, do a complete overhaul of their notification system to consumers in Lakewood. Most importantly, none of this equipment investment upgrade was planned by First Energy. The commission made that clear in its findings in its notice of noncompliance, that whatever First Energy would tell the commission, not once did First Energy say it had planned any of these equipment upgrades. These equipment upgrades were mandated of First Energy based on the complaint by the City of Lakewood and the finding and the order by the Regulatory Commission. The legal strategy to confront First Energy has been multifaceted. We talked about the notice of probable noncompliance. One more, please. There we go. One more. Thank you. Right there. Thank you, Holly. The mayor sat with the law department and asked us to investigate and research the viability of intervening in the reliability case, the reliability application filed by First Energy before the commission. In that application, as many of you know, First Energy sought to lower the standards by which the PUCO judges the performance of First Energy. And it tried to do so, attempted to do so, for many reasons. But the important reason they might try to do that and the implication of it is if First Energy is meeting its reliability standards, it is in a much better position to resist mandates by the Commission to upgrade equipment. So First Energy could say, we don't need all of this expensive equipment upgrade. Look, Commission, we are meeting our reliability standards. So the law department researched that. And as part of that research and analysis, we met and spoke with lawyers of the Ohio Consumers Council, whom you'll hear from later on. I worked very closely with Mr. Brogbeck He's been very patient with me, and I've learned a lot from him. And I want to thank Councilman Bullock for the introduction. You introduced us to the OCC very early and has been very helpful. So thank you for that. Our opposition in our intervention. Well, we did. We intervened. We filed a motion to intervene in October of 2025. We were grateful that the Commission granted our motion to intervene. In December, Mayor George filed an affidavit with PUCO in opposition to First Energy's application to reduce the reliability standards. As part of that affidavit, we put together a series of pieces of evidence so PUCO can analyze them. The first piece of evidence was the resolution from this council supporting the intervention. And we thank Council for that support. And President Keppel, you're right to emphasize the importance of public support and public comment before PUCO. PUCO mentioned the value of that in their ruling. The second piece of evidence that we put before PUCO was the impact on our seniors. We got real-time contemporaneous reports by our first responders of how they had to rescue seniors who were trapped in elevators during power outages. We got those days. We overlapped them with the power outage days of First Energy. And we produced the actual documents with appropriate redactions to put a human face for the commission as to the cost of these outages. The law department worked with human services Director Berry, as Human Services, worked diligently to help individuals who could not afford the loss of food, those who least could afford it, would come to Human Services. We worked with Director Berry to understand those types of services and we put that evidence before PUCO as well. Finally, one of the most important pieces of evidence we were able to obtain was through public records requests of First Energy to understand how many outages there were in the summer of 2025 and the causes. Throughout the briefing filed by First Energy in the reliability case, First Energy referenced broad, tried to keep things broad as possible. And First Energy's position was, climate change is causing these power outages. The increase of rain is loosening up the roots of these trees in Lakewood, and these trees are falling over and causing these outages. So nothing to see here from First Energy's standpoint. And coincidentally, most of the trees, according to First Energy, were on the private side of the property, meaning First Energy did not have access. public right away, the tree lawns. Well, the evidence we were able to obtain from First Energy dispelled that allegation. That was false as it related to Lakewood. We have no idea whether it's true for the entire service area of First Energy or throughout the state or throughout the country, but we know from the evidence that was false as it came to the city of Lakewood. Most of the outages in 2025 by First Energy's own documents were the result of equipment failure or employee error. The commission cited that evidence in their ruling. Now, we did go down. The hearing was probably six or seven hours long on February 26. Mr. Brodbeck, did a lot of examination, did an excellent job. The mayor's office attended with me. Director or Chief Story went down there. And we did engage in cross-examination of First Energy's engineering witness. The cross-examination focused on two areas. Number one, how did Lakewood get so lucky that our circuits were consistently failing compared to the entire service area of First Energy? So we focused on that equipment, the necessary equipment upgrades that Lakewood needed and was entitled to. The second area dealt with the consumer survey filed by First Energy as part of its application. By law, First Energy had to do a consumer survey, and they relied on that survey to tell the commission that the consumers are generally satisfied with the performance of First Energy. Interestingly, we were able to understand and determine that that survey time conveniently ended in 2024, did not include the 2025 time period. First Energy hid behind the technical language of the rules that allowed them to do that. But PUCO was not impressed because that survey is nothing more than a surrogate for consumer sentiment. And if consumer sentiment in 2025, when there's a hearing in February of 2026, if that sentiment is overwhelmingly negative, that's what's relevant to the commission. And that's what the commission found as relevant. Ultimately, just last month, the Commission did issue its order and we were gratified that First Energy's application was denied. Our strategy continues. Of course, right after that ruling by PUCO, we had significant outages in the city in July. As a result, Again, the multifaceted legal approach led to Mayor George's formal complaint to PUCO, a second complaint, first one of 2026. The mayor demanded that PUCO reopen its investigation of First Energy to determine whether First Energy is continuing its noncompliance with its statutory duties. the mayor pushed for financial penalties, as she described. I won't repeat those, but the mayor laid them out in her presentation earlier. Pucco, in four days, responded to the mayor's petition and indicated that The investigation will be opened. An active investigation will be opened, a second investigation of the Lakewood equipment. Now they're going to look at the Lauderdale substation. If you recall, the transformer updates increases applied to the Lakewood substation. This will now apply to Lauderdale, and if there's more equipment that needs to be upgraded or invested in, we're confident HUCO will require it.

Director Vargo, can you just pause and note that it was the Lauderdale substation primarily that affected the customers that were without electricity leading up to the days the 4th of July. That's what First Energy has told us. Anyway, is that correct?

That is correct. And that is why the focus is on the Lauderdale substation in this July PUCO response. Thank you, Madam President. Continuing with our strategy, the law department will monitor the compliance of First Energy, their compliance with the July 25, 2025 notice of noncompliance by the commission. The city has requested documents from PUCO under public records. We don't have them yet, but we've been in contact. We have no reason to believe they will not be forthcoming. We will monitor when those investments occur. Do they get in on time? Are those transformers put in on time? We'll make sure they are. All the poll equipment that needs to be updated by the end of this year, we'll find out when that has occurred, what has occurred, and we'll monitor it. Next. Part of our legal strategy is to consider intervention in the rate case.

Excuse me, Director Ryder. Just before you move on there, I just want to mention in the public records request, we're also requesting, because First Energy was required to file a plan to improve their communications, right? So we've requested a copy of that plan as well as the infrastructure plan and the reports. Is that all accurate?

That is correct, Madam President. We have requested every document that First Energy has submitted to PUCO to evidence First Energy's compliance with the July notice of noncompliance. So everything that First Energy is submitting to PUCO, that's our request. And it covers all of those areas of investment that I spoke of earlier, including a complete overhaul of the communications.

Thank you. I bring that up because, well, one, I think anyone who lives in Lakewood would probably say that they don't believe that First Energy could possibly be beating their communication responsibilities as well as infrastructure. So that's something I think for all of us as council members, you know, we're Often the ones folks are reaching out to and we're trying to get folks answers which is difficult for us to get from First Energy as well. So that's something the communication improvement is something that I think is very important for us to keep an eye on and to push for. And then another piece of that is that once these items are submitted to PUCO they are public records. Correct. So they are public records once PUCO has them. So would any member of the public also be able to request them from PUCO if they wanted to?

Yes, they are. There are some confidential documents dealing with the engineering of equipment that is protected. But by and large, that's accurate, President.

And so the same thing is, so if we were, you know, I tend to invite First Energy to come before council and speak with us about what they have done and intend to do. And sometimes in the past, they've been hesitant to do that on the public record. But anything that is within these documents that are considered public record, they would probably not really have much of a stance to say that they couldn't speak about it. Would you consider that to be true?

I consider that to be very true. Yes.

Thank you, Director Fargo.

Thank you. The next part of the legal strategy involves the rate case filed by First Energy, again with PUCO. First Energy has filed an application with the regulatory body to increase its rates charged to consumers. NOW, WE ARE LIKELY TO INTERVENE AND OPPOSE THAT. WE ARE DOING THE LEGAL RESEARCH. THAT'S SOMETHING THAT AS WE GET OUR MENTAL IMPRESSIONS TOGETHER, OUR LEGAL IMPRESSIONS TOGETHER, WE WOULD BE GLAD TO REPORT TO COUNCIL, MOST LIKELY AN EXECUTIVE SESSION, BECAUSE IT REMAINS TO BE DONE. BUT AGAIN, WE'LL WORK WITH MR. BROADBECK. HE'S VERY HELPFUL IN THAT SITUATION. WE AS LAWYERS, cannot get emotional. We try to keep it level-headed. But after all of this, for First Energy to seek a rate increase from our residents and businesses is quite insulting. So we'll try to keep it objective. But we're going to oppose that. The mayor's instructed us to oppose it. We're just working on the form of opposition. Finally, I want to set forth the goals of all of our work As we set these on, we set the goal about the equipment upgrade, but the equipment upgrade is a means to the end. And the end has to be fewer outages of lower, shorter duration. First Energy is measured by the frequency and duration of its outages. We need far fewer outages in Lakewood, and the outages that occur have to be much shorter in duration. And those outages cannot be equipment-related or employee air going forward. We understand weather issues, but those are the goals. These equipment upgrades are happening as we speak. There may be more as a result of the mayor's second complaint to PUCO. We'll monitor that. Those large transformers will be fully operational by the second quarter of 2027. We will get reports on outages. We'll compare those outages and make darn sure we're seeing some results for the residents and businesses. And if we aren't, we will keep at the legal strategy. We put a lot of information on the web page for our residents and businesses. They can check in on it periodically. I just want to remind everybody of that. We've left plenty of time for questions. We'll take it. I know we've addressed some already. And I know the OCC graciously has come up from Columbus. And they will speak as well. Thank you.

Thank you very much, Director Vargu. And I just want to express our appreciation for the partnership with Mayor George and your work within the law department on this. I know it's been a lot of labor that is very meaningful and impactful, as well as the work of our other departments, our human services, our first responders. One of the things that I'm often asked about the toll that the electrical outages take on our community, and one of those pieces is the resources that our city expends in trying to respond on the back end to needs that wouldn't exist should First Energy have taken care of their infrastructure in a timely manner. So it's both the human toll and the financial toll, as well as taking our city employees away from other labor that they would probably rather be doing than trying to take on first energy in court. So we appreciate your efforts tremendously on that. I do want to just, if we could go back to the slide with the timeline, I think it's one before this. I just want to point out, Director Vargo went through this very well, but just to emphasize a little bit here again that we look at this timeline. I'm sure many of us, many of you who are here tonight also attended the public meeting that First Energy offered last Summer I believe it was after those outages when they promised that they would do better. But then if we look at this timeline, they were also seeking to lower reliability standards at the same time. So it is important that we stay on this, as Director Varga pointed out, None of these orders with PUCO would have happened without this intervention. So this work is making a difference. It's not as fast as we want, but we are seeing, you know, as the transformer was delivered to the Lakewood Station, which is the one in Birdtown area, and then I heard reports that another transformer was delivered to Lauderdale. potentially maybe getting ahead of Pucco's next investigation, which would be a step in the right direction. So we'll see. We'll see how those, when things actually get hooked up. But just thinking about that, that we are a little bit, I saw, an article in the newspaper that compared this to David versus Goliath. You know, we're a municipal, we're a city, taking on a multi-million dollar corporation and it takes all of us working together. And I just want to emphasize once again that point that First Energy tried to cite, that customer service survey, and it was the complaints of over 800 residents speaking out directly, submitting those complaints to PUCO that, you know, your voices are powerful. And even when we don't have electricity, you still have power. So we want to make sure we continue to do that. As people experience outages, hopefully never again. But when we do, we have to keep filing those complaints because it is, although we're all tired of doing it, it's an important tool and we have to use every tool in our tool belt to tackle this issue. Okay, with that, I will open up for questions. I'll turn first, Council Member Stubing.

Thank you. I appreciate all the work that's gone into this, President Kuppel, by yourself and by Mayor George and the Law Department. And I'm wondering if you could give us a quick overview. And I see that... Director Gordon isn't here tonight, but Mayor George, maybe you could tell us about the number of transformers in the city, or if anybody can shed light on that. And if Athens failed first and Lauderdale failed second, are we expecting a third and a fourth to fail? someplace else and also if you could also address the question of from several of people that have reached out to me is with the new developments that are being put in across the city will this also be a drain on their electric and I Quite sure that we addressed that when we talked about the Lakewood Commons going in. And it didn't seem to be even a second thought like, oh, that'll absolutely be fine. Now I'm starting to question that as well. Do we need to go back and look at what kind of drain these new developments are putting on our system? Thank you.

And I'll just mention, you know, some of these questions may be better suited when we have First Energy here or once we get the report. So some of the things Director Vargo referenced was one of the things that First Energy was required to file with PUCO a plan for the infrastructure of how they were going to bring their infrastructure up to where it needs to be, as well as the communication plan. And so we have requested that plan so we can see in detail some of, we know some of the things like the transformers, but some of that we need that detailed plan. And if I'm misspeaking, correct me, Mayor George. And so some of those things in terms of the number of transformers and where they are and those sorts of things, the experts we have before us tonight may or may not have those answers. So I just want to put that out there. I don't want to put pressure on the law department to be able to answer engineering questions. But just to put that in there. So I'll let, and I forget your other question was. Great.

Yeah, so thank you. A couple of things. So regarding the new construction, the developer will work directly with First Energy to identify the power load for each development. And speaking with First Energy, they have told me they do do a thorough audit. So the details of that and the engineering behind that is definitely a First Energy question. But I know that does happen every time there is a large development. Regarding the transformers, again, First Energy is going to have a lot of the detailed information and the substations, but the city of Lakewood does have a handful of substations, one at Athens, one at Lauderdale. It seems to be, to summarize some of the issues of the past couple years, it seems to be that the initial issues were at the Athens substation, which I would assume that's why PUCO has identified for them to get new substations. The last big outage around the holiday was related to the Lauderdale substation.

Director Varga.

Yes, thank you. President Keppel, just I'll add in response to Councilperson Strebeck's question. The Ohio Revised Code requires First Energy, the utility, to understand new development and to provide energy for that new development. It's not, oh, we may not have this development, this housing development, if you can't service it. They are mandated to get their act together and to provide, put them on the grid and make sure they have all the upgrades in place. So we want the city to move forward. It's not on the city to put the brakes on new housing in the city. It is on First Energy. Thank you.

Thank you, Director Varga. And just also add something you've mentioned in another interview I heard, too, is it's kind of strange to have a for-profit entity not want more customers. So they would certainly want to service a large development, one would think. Council Member Evans?

Yeah, no question for me, but I just want to take a moment to say I think this is an unprecedented situation. We're in 2026, and these are conversations we should be having in like the 1930s about reliable power grid. It's absurd, and it's ridiculous, and I'm really proud of my colleagues here in the DACE and the administration for tackling this, which is just something that shouldn't be happening where we are right now. and for all the hard work that everybody's done. And I really want folks, you know, this community to know we are as frustrated as you are with every one of these things. And I feel confident that all the folks up here and the administration have done every single thing we can to fight this. And again, I'm proud of that, extraordinarily proud of that. That doesn't make this any easier for all of us, but this is just one of those things that it's actually mind-blowing. So thank you for all the cooperation in this room. I mean, I do have lots of questions, but I'm going to yield to my colleagues on that. But I just want everybody to know that this is something that is absolutely top of mind. This is life and death. And we're dealing with an absolutely, I mean, just basically a corrupt corporation that's almost holding us ransom. And it's just so frustrating. So I appreciate the... so much of the community that understands that we're doing what we can. And I appreciate the folks that are really frustrated that we're not, think we can do more or we aren't doing more. So I just wanted to put that out there. Thank you to everybody. I'm really happy to be a part of this fight. And I'm proud of this community in this, I think, which is a dark moment through no fault of our own. Thanks.

Thank you. Councilman Bullock?

Thanks, Madam President. Thanks for the hearing. Thanks, administration, for being here. I'll save my comments till after Ohio Consumers Council. But I did have one answer, at least the beginning of an answer to the question raised by Councilman Striebig, because a couple of residents have asked that. So the public works director and the building director kind of shared this. They said, well, first of all, let's contact First Energy. First Energy got back to the public works director. And this is what he said. First Energy explained that they have a team who evaluates all new proposed developments Within their service territory, this team conducts detailed load analyses to ensure new projects do not create adverse impacts on the local grid. Developments must have approval before proceeding, including accounting for power needs and any changes needing to be made to the system before proceeding. Therefore, the new developments should not have any impact on reliability throughout the city, which is consistent with what the law director said. The inference is that We're experiencing breakdowns in equipment that serves both new and old buildings. Also on the grid on a typical day, there's plenty of capacity, there's plenty of electricity. What we're experiencing is in the worst rush hours on the peak usage days in two summers in a row now, the heat waves. When people are using air conditioners, for what they're for. And that should be predictable. So there's strain to our grid that's beyond new developments. In fact, only one of three new developments is actually up and running. And we had outages last summer, and the other two are not activated yet. So it's bigger than just the new development question, I think.

Thank you. And I think it's important to I think it can be easy to just like it can be easy to blame the newest immigrants. We don't want to blame our newest residents. So as we're trying to solve the affordable housing crisis, one of the ways we do that is adding more housing units. So we try to solve one problem. And it's important to note that. Again, we can all try to, that we're not pointing fingers at each other, but remembering that the engineers at PUCO told us that these failures are caused primarily, almost entirely, by equipment failures and employee error and lack of proper investment. It's the same thing with even the excuse about climate change. Again, that's not... something that should be a surprise to a multimillion-dollar corporation when it's not a surprise to most of us, and it's their responsibility to plan for it. I was saying to some folks in the audience earlier before we started of, you know, last summer when Mayor and I had that meeting with First Energy, and they talked about how long we asked about how long should a typical transformer last or circuits or some of the other equipment pieces and you know because some of them in the report i think are at least over 20 years old or almost 20 years old and um you know that might have been true in you know between 1960 and 1980 the 20 years is going to be sufficient. But the change in our electrical needs is much greater. And a power company should know that and anticipate that when it's their job and that's how they make money. All right. Council Member Hamilton-Steiner.

Thank you, President Keppel. So I believe my question is directed towards Director Vargo. And I believe you may have answered it. But just to clarify, in what we're doing and the actions that we're taking would also include our business corridors. So our commercial and small businesses as well are included in this.

Oh, absolutely, Councilperson, absolutely. These equipment upgrades need to improve the reliability of the energy for everybody in Lakewood. That's the goal. That's what we're fighting for.

OK, thank you so much, because I had a meeting with the chamber and that was one of the things is that there were some businesses that you know they have had their insurance claims denied for some of these instances and even if they try to apply in our approved and their rates rates increase as well so I just want to make sure that they're also included in whatever action that we're taking so that they can benefit from this as well and so going back to the goals of our legal strategy So we want less frequent outages, shorter duration, no equipment-related outages, and then equipment upgrade solution. Has there been any thought of restitution included as part of, I guess, part of that strategy and eventual outcome?

Yes, Councilperson. The mayor indicated in her second complaint to PUCO SHE HAS REQUESTED FINANCIAL COMPENSATION FOR RESIDENTS, FINANCIAL FINES TO BE IMPOSED ON FIRST ENERGY AS WELL. THANK YOU.

THANK YOU.

THANK YOU, PRESIDENT KEPPEL. THANK YOU, DIRECTOR VARGO. In my day job being a member of a smaller legal department for a public entity, I know it's hard to go a mile deep on issues that your old law firm would charge a lot of money to represent the city of Lakewood on this. So I just want to say that to the entire law department and then the OCC, I think we got a lot of bang for our buck for the work that you guys have done. And I certainly really appreciate it, and other residents do as well, and my colleagues. On the new development piece with downtown development in particular, let's not forget there used to be a hospital there. That hospital used to pull a lot of power as well. And to Director Vargo and some of my colleagues' points, we shouldn't slow growth in our community because the billion-dollar company that's supposed to provide safe and reliable power to us can't. And also the irony, and when we get First Energy here, I think they'll say is that WITH NEW DEVELOPMENT COMES UPGRADED SERVICE FROM THEM AS WELL BECAUSE THEY TYPICALLY INVEST IN OUTLINE AREAS THAT ARE DEVELOPING FASTER. AND SO TO THE LAW DEPARTMENT, TO THE ADMINISTRATION, TOTALLY ON BOARD WITH EVERYTHING. COUNCIL WILL DO WHATEVER WE CAN TO HELP FURTHER THOSE LEGAL STRATEGIES WITH PUCO, WITH THE RATE CASE, WITH EVERYTHING. THE QUESTION I HAVE IS MORE FUNDAMENTAL. GOING BACK TO THE 1930s, YOU KNOW, OUR STATE CONSTITUTION DOES GIVE MUNICIPALITIES THE ABILITY AT LEAST TO EXPLORE MUNICIPALIZATION, ESSENTIALLY THE ACQUISITION OF POWER INFRASTRUCTURE. RIGHT NOW, THAT IS A SCARY CONCEPT IN THE SENSE THAT IT'S LIKELY VERY EXPENSIVE. BUT THE PROBLEM THAT I THINK WE HAVE IS THAT WE DON'T KNOW HOW EXPENSIVE. AND SO WITHOUT good information or at least a consultant to help us understand it, it's a pathway with which we don't even know if it's possible. And so I'd like to ask if the administration has considered this. And then if not, I'd certainly be committed to work with the administration to think about it. And for members of the public or folks listening, essentially every power pole in Lakewood where our streetlights are on, Every transformer we've talked about, every substation we've talked about is owned by a private company. That private company is First Energy. The U.S. Constitution, the state constitution says you can't take private property without just compensation. And so the Ohio Constitution gives municipal corporations, cities like Lakewood, the ability to appropriate that property, essentially take it from a private party. AND USE IT FOR OUR OWN PUBLIC PURPOSE. NOW, I AM UNDER NO ILLUSION THAT THAT IS CHEAP OR EASY. MY PROBLEM IS THAT I DON'T KNOW HOW EXPENSIVE OR HOW HARD IT IS UNTIL WE AT LEAST EXPLORE IT A LITTLE BIT. BECAUSE NOT ONLY DO YOU HAVE TO APPRAISE EVERY SINGLE LIGHT POLE, EVERY SINGLE LIGHT, EVERY SINGLE TRANSFORMER ON A POLE, EVERY SINGLE SUBSTATION, AND WE JUST GOT THEM TO INVEST MULTIPLE MILLION DOLLARS IN NEW new transformers that are coming to town, so that increases the value of those things. So I guess I'm asking the administration, is there even an RFQ or an RFP to see if there are third-party companies that help advise cities on this or municipalities on this? Because I could envision something where there's essentially a bond offering and the city of Lakewood already runs water, already runs sewer, at least explore what it would look like, how it would be structured. And if nothing else, I think that's a bit of leverage as we pursue these issues with First Energy. Private corporations typically respond and respond better when there are more areas of weakness in which we can exploit. And I don't want to get too much into legal strategy, but I think that what we're doing on the PUCO side, on the rate case, and the reliability standards is excellent, and I commend the law department's work, and I commend the administration for doing that. What I'm curious about is if we can go on another front and make them defend us on two fronts or at least consider it. And so that's my question to the administration. And folks here might not be able to answer it, but know that I'd be willing to appropriate funds to help do that or at least study it.

Yeah, thank you, Councilman. I can answer that. We have begun initial efforts to determine if formal exploration of municipalization makes sense. As you know, this would be immensely costly for the city. As you know, we would be inheriting the crumbling infrastructure THAT IS THERE TODAY. AND INITIAL JUST OFF THE CUFF ESTIMATES ARE FROM HUNDREDS OF MILLIONS OF DOLLARS TO UPWARDS OF A BILLION. BUT WE ARE EVALUATING. WE ARE LOOKING AT IT IF IT'S WORTHWHILE. BUT WE WOULD NOT WANT TO BANKRUPT THE CITY TO MOVE FORWARD WITH IT. BUT ALL OPTIONS ARE ON THE TABLE.

THANK YOU. WHERE ARE WE GETTING THOSE ESTIMATES?

I've had some initial conversations with Cuyahoga County on this, and that's what we're kind of the estimated numbers we're talking about. No formal study has gone into this yet. These are just high-level conversations we're having about what options the city has.

Thank you. Vice President Baker?

Yes, and Mayor, I certainly agree with you that it will be expensive. I do think that there are There are financing options similar to how we upgrade our sewer infrastructure, where you basically bond out and pay over time. But no doubt. And so the public can understand. I mean, we'd have to either contract with a third party to have laborers and people that would go up on poles and fix things and respond to things all the time. So it's not a small undertaking, but I think at least I GUESS WHAT I'M SAYING IS, AS ONE OF SEVEN COUNCILMEMBERS, I'M WILLING TO PUT SOME RESOURCES IN TO UNDERSTAND WHAT IT LOOKS LIKE, HOW MUCH IT MIGHT COST, AND WHAT FINANCING OPTIONS MAY BE AVAILABLE. BECAUSE THE PRIVATE MARKET MAY BE WILLING TO COME IN AND ESSENTIALLY HELP FUND IT, AND THEN WE HAVE A DIFFERENT OPERATOR. I'M GOING WITH ABOUT, YOU KNOW, 10% OF THE KNOWLEDGE ON THIS, AND SO I GUESS WHAT I'M SAYING IS I'M WILLING TO WORK WITH THE ADMINISTRATION AND MY COLLEAGUES TO AT LEAST FUND TO GIVE US MAYBE 30 TO 40% OF THE KNOWLEDGE SO WE CAN MAKE INFORMED DECISIONS AND HAVE LEVERAGE.

THANK YOU. You know, as a former librarian, I support research and like to have that information as well. I'd be interested in that. I'd also be interested, I would love to have, you know, maybe have the county come in too and talk about some of the work that they've been doing with the microgrids and the pilots because, you know, I think that there's opportunities for us to have a yes and strategy of the more we reduce our reliability, or dependency, not reliability. We don't want to reduce our reliability. It's already bad enough. Reduce our dependency on first energy and increase our sustainability. That's a win-win for our community. So that's also on the to-do list of things to be talking about in an all of the above strategy. All right, Councilman Bixenstein.

THANK YOU, PRESIDENT KEPPEL. THANK YOU TO COUNCIL COLLEAGUES AND THE ADMINISTRATION FOR ALL OF YOUR DUE DILIGENCE ON THIS VERY SERIOUS MATTER. MY COUNCIL COLLEAGUES ACTUALLY COVERED MY MAIN TWO QUESTIONS. THE QUESTION I HEAR I FEEL MOST OFTEN FROM CONSTITUENTS IS ABOUT THE POTENTIAL TO MUNICIPALIZE, SO I APPRECIATE You broaching that topic, Council Vice President Baker. And then with regards to the transformers and the substations, I'd like to see First Energy provide us with a substation map where we can see each substation and the coverage area it provides so we all have a clearer picture beyond infrastructure upgrades to the Athens substation and the Lauderdale substation, what else needs to be targeted. But anyways, the other comment I wanted to make is thank you for humanizing this issue in your legal strategy. I think that's really important to remember that at the end of the day, Well, nobody in Lakewood has been unscathed by this. It's the most vulnerable members of our population who have truly suffered. And for them, it really is a life or death situation. So your example of elderly folks being caught in elevators or when my observation when I was out in the field on those first couple days of July and the 110 degree heat index was walking around neighborhoods and seeing how many people had resorted to being out in their car, oftentimes with young children and or with pets. because at that point they were on multiple days of no power in a record-setting heat wave, and this was the best strategy they knew to stay safe. And so I share in the frustration. I certainly agree with the sentiment this is unacceptable and that we as council will do whatever we can to support fixing this life-or-death issue, but I really appreciate the ongoing effort to remember that We are all humans. We need to humanize this and remember that our most vulnerable members of our population are suffering more than anybody.

Thank you. Other questions from council members? Okay. With that, I'm going to ask, I'm going to invite Tom Brodbeck from the Ohio Consumers Council to speak. Tom, if you want to come up to this mic here, if you push the button, it'll turn green and then we'll be able to hear you.

And I'm going to very delicately slide these remote mics. Okay. Good evening, President Keppel, council members, Mayor George, city staff, and members of the public. My name is Tom Brodbeck. I'm an assistant consumers council at the Office of the Ohio Consumers Council. And I'm just here tonight to be present and to go over some of our The current rate case, as well as what we consider sort of the big hits of the history of the first energy investment into the grid.

Can you scoot a little closer to the mic, please? Yes. Thank you. I know you're tall and it's short, but I'm getting some signs from folks in the back that they're having trouble hearing you.

Yes, I hope everybody can hear me now. For anybody wondering, there are some copies of this document up on the sign-up sheet over there. Council members, you also have one in front of you. As Mr. Vargo shared, we've worked closely, the OCC, with the law department in First Energy's reliability performance standards case before the PUCO. That did ultimately end in a victory where the application was denied and the standards were kept the same rather than weakened as First Energy saw it. However, partially based on what we're going to share tonight, our office has filed an application for rehearing on that order. Our application's core basis is that for all of the money, the hundreds of millions of dollars invested, consumers should be able to expect more than the status quo. They should expect more reliability, certainly not less, but the investment's been made.

I'm sorry, Tom, you said to reopen which?

That is the reliability standards case.

Okay, thank you.

And an application for rehearing is a procedural mechanism. It's more than we need to discuss right here. OCC has also intervened in First Energy's rate case. In that rate case, we represent all of First Energy's residential consumers, including Lakewood. The first page here in front of you on this packet, front and back, is our consumer alert related to the First Energy rate case. There it provides some background and context about the case, why rates are going up, monthly bill increases. That is based on the average household use. And at first blush, it might not seem like a large number to an individual household, but it is a massive number in the aggregate of the consumers, and it still largely impacts our most at-risk neighbors, sometimes for whom every dollar counts. On the back page of that consumer alert is a short explanation of how to make your voice heard at the PUCO, as well as a brief timeline on the bottom of the page there of the rape case. I believe this document is also available on our website at www.occ.ohio.gov. And although the rate increase is our primary concern in regards to the rate case, particularly in this concerns of affordability, we believe it is also an opportune time to review and discuss FE's reliability performance issues. And for that reason, we look forward to working closely with the city law department and Mayor George to make sure that Lakewood and all of First Energy's consumers are heard. Moving through our packet, some background on our role as an office. The Office of the Ohio Consumers Council advocates and educates to secure for Ohioans affordable, reliable, and equitable residential utility services that are essential to their well-being. Basically, we represent all residential consumers to make sure they are getting the service that the law mandates. Our advocacy includes representing consumers at the PUCO, education and outreach, including advising legislators on issues and policy. Turning the page, we get, what is the first step of the grid modernization investment that First Energy has made. That is called the distribution modernization rider. This rider was in effect from 2017 to 2019. Through this rider, $457.7 million were collected. The Ohio Supreme Court ultimately halted that DMR rider in response to an appeal. And there are some links available there with more information on that. However, if you do some simple Googling, you may be able to find some more in-depth breakdowns of that case history. Moving on, first energy implemented in 2019, it was approved by the PUCO, grid modernization phase one. In grid modernization phase one, First Energy was authorized to invest up to $516 million in capital improvements to modernize their energy grid. Through 2022, First Energy collected $369.6 million from consumers under grid mod phase one alone. Turning the page. In 2024, first energy grid modernization phase two was approved by the PUCO. First energy initially requested $626 million over four years for grid mod two. However, there was a settlement reached and that number was reduced to $421 million over the same amount of time. These investments were made for a variety of reasons, but particularly, and the PUCO went back to this a few times, as well as the parties, reliability was a focus of these modernization efforts. And again, we should be seeing with these hundreds of millions of dollars invested, more reliability and not less. If you turn the page, you can see what first energy consumers paid for out of pocket for these programs. Through 2017 to 2019, the average consumer paid $108.54 over a three-year period for DMR. That charge was ended after the Supreme Court appeal. From 2017 to 2025, Grid Mod 1 and 2 consumers paid $146.32. That is a fixed charge based on an estimate, and that is still being collected from consumers. As Mr. Vargo and Mayor George made very clear this evening, the PUCO does take heed when citizens speak up, when consumers speak up, and especially when the cities speak up. They cited not just the City of Lakewood's involvement, but also numerous resolutions passed by various cities and villages in the service territories of First Energy. The next page. pretty much is just how citizens can engage. More voices do make a difference. You can share and pass along OCC's consumer alerts. We do have these for all rate cases. You can file public comments in rate cases that are impacting you. You can stay informed through our OCC resources available on our website, encourage your friends and neighbors to speak out, and contact your local officials such as the city council members, Mayor George and Mr. Fargo. Finally, on the back of that last page is a QR code as well as our web address. We invite everybody to visit our website and stay informed because as we've learned in these cases, there's power in letting your voices be heard. OCC looks forward to working closely with the city and Mayor George to make sure that Lakewood and all of First Energy's consumers are heard through these proceedings. And I will be around to answer questions and I believe participate in the executive session if one.

Thank you. I do have a question. So if folks wanted to submit public comment to the PUCO about the rate case, I know it has the link here, but I think they're usually asked to enter a case number. Would they give that 24-04168-ELAIR? Is that the right one?

That would be the up in the top right corner, reference PUCO case 26-347-ELAIR. And if you have any other questions about that number, I'm sure Mr. Varga would gladly share the case number with any citizens looking to make a comment.

Is that a different one than, I thought we had a different one in our slide deck for the rate case. Are those different cases?

Did we have a 2-5 number there?

Clerks, can you go back on the slide to the slide that has the rate case number?

That might be a typo.

We can get that straightened out. I just want to make sure. But the 26 would indicate that it's this year's case. Is that inaccurate?

It was filed in December of 25, but it is ongoing. So it should be at 2-5. Okay. Mr. Varga, I believe yours is more accurate.

Yes. Thank you, President Keppel. There are a series of applications pending from First Energy. And we might have put the non-rate case number up there. But we certainly have it. And Tom's number is accurate on the rate case.

OK. So folks who want to comment on that, I suppose council members can help share that out, and maybe we can also put it on the city website where we have the ongoing strategy with that case number, so folks who want to comment on the case can make sure to comment on the correct case number.

Yes, and again, we have information available on our website, and we're always happy to interface and help people get involved.

Thank you.

Council Member Hamilton-Steiner.

THANK YOU, PRESIDENT KEPPEL. ACTUALLY, IF FOLKS TYPE IN EXACTLY THAT LITTLE SUBMIT A COMMENT ONLINE, THE CASE NUMBER POPS UP AUTOMATICALLY. SO I'LL SEND YOU TO THE DESTINATION LINK. YOU CLICK ON THAT, AND IT PULLS IT IN AUTOMATICALLY.

THANK YOU SO MUCH, COUNCILMEMBER.

ANY OTHER? GO AHEAD. COUNCILMAN BULLOCK.

THANKS, MADAM CHAIR. MR. BROADBECK, THANKS FOR BEING HERE, ALSO WITH YOUR COLLEAGUE. AND THIS IS A VERY HELPFUL SUMMARY. So 108, $108 plus $146 in change together is, well, it's above $250 per customer in First Energy territory. That's probably bigger than just the Cleveland area, but all the way to Toledo as well, I'm guessing. But can you tell us which of these was the funds lost by First Energy? and that the auditors found that they were not properly accounted for. I believe it was a distribution modernization rider.

That I believe was a reference to a rider, you are correct, under one of the DMR programs. I believe it is an accounting auditor who noted that either descriptions of accounts or something of that nature were mislabeled, which made spending hard to track. I'm speaking without any specifics here, but that is my recollection as far as I can think of as far as missing accounting issues.

Yeah, and the Ohio Supreme Court, I believe, has ordered some penalties. Actually, the PUCO and I believe Ohio Supreme Court has ordered some penalties from some of these funds to be delivered, I think, soon back to the consumer. But the bigger picture is a very valid one, which is essentially consumers, customers, Laker residents have already paid for the grid that we have installed, and the funds for repairs and upgrades haven't properly been used. And so now we're experiencing repeat chronic outages of long duration and high frequency that sometimes are so severe that the trees next to the poles get caught on fire and Lakewood Fire Department has to go and put out a tree. that was ignited by an overheated utility pole. And then that's just the beginning of the problem. So I guess what occurs to me is in Lakewood we have A SYSTEM FOR ABSENTEE LANDLORDS TO BE REQUIRED TO MAINTAIN THEIR PROPERTIES. WE HAVE 100-YEAR-OLD HOMES. THERE'S A LOT OF MAINTENANCE TO TAKE CARE OF, PLUMBING, ELECTRICITY, INSULATION, YOUR ROOF, AND MORE. AND WE'VE GOT A SYSTEM IN OUR HOUSING DEPARTMENT TO stay on top of these things and hold accountable property owners who are behind on their deferred maintenance. And sometimes it happens, but every homeowner, every business owner eventually has to be held accountable. And so it seems as if we've got this problem on a grand scale, even though we've already paid plenty of money for it. A couple thoughts to share with my colleagues. To me, probably the fastest and least expensive solution will be to get the grid that's in place that we've already paid for to function like it's supposed to. We've also got a cop on the beat, PUCO, whose job it is to focus on this, impose financial penalties, order corrections. They've begun to do that. The challenge is that the repairs for Last summer's power outages seem like they're taking three years. Here we are in this summer's power outages, and we've got more. So it seems as if we've got whack-a-mole on our grid maintenance and equipment failure problems, and that's probably because for the last 10 or 15 years, the company hasn't been making appropriate use of these funds that we've been paying. I do want to say I appreciate the linemen who are working out in the heat. IBEW Local 39. I appreciate a lot of the people today soldiering on in First Energy. headquarters has not given them the tools and the budget to be successful. But just as some of my colleagues noted, not too long ago, headquarters wasn't even trying to be successful. They were playing games with politics in the statehouse. So we've got a lot of catch-up to do with utility. So I guess for our job, I think the point of this hearing and thank you to the administration is that We can't have another summer of this. We're going to have to be on top of it. I, too, want to consider municipalization or a microgrid. Those are probably five, 10, 15-year solutions. So maybe we do both tracks where we consider a big long-term change. But I'm trying to help this summer and next summer also. So appreciate the good work.

And Council Member Bullock, I could respond to that very briefly. You are correct that the cases that authorize the spending for the grid as it stands today are done and over with. That spending has been determined, revenue requirement, all the charges. Problems occurring now, such as the 2026 outage, would need to occur in the ongoing case, which is why Lakewood's involvement, as well as all the citizens' comments in the Wray case would be, are so important. Because due to this regulatory lag, which is within the nature of all regulation, the problem, the time to face the problem is now. So reliability, OCC believes, is a core part of the conversation in this Wray case. We believe that Lakewood plays a part in that.

Thank you. Any other questions for Mr. Broadbuck from council members? Thank you so much. I appreciate you.

Thank you.

260347. Thank you. That was for anyone watching at home, just because you probably couldn't hear that. So that was another member of the Consumer Office Council. Mr. Blackwood was giving us the correct number, which is the 260347 number. Thank you. OK. So any other questions from council members? I did think of one other thing that I wanted to ask. In regards to financial penalties, Director Vargo, Is there a statutory limit to how much First Energy can be fined? And if so, can you talk about that?

Yes. Thank you, President Keppel. The statute allows the commission to issue a penalty on First Energy of $10,000 per violation or per incident. And again, I know we spoke about this. You could fight forever as to what an incident is. So there's plenty of flexibility for PUCO to levy a meaningful fine on First Energy for its recent failures.

Thank you.

Thank you.

And then some members of the public have asked about pursuing a class action lawsuit. And I know you talked about how the POCO is the proper authority. But I just wondered if you had any thoughts you could share about that idea. And if it's better not to do that on the public record, we can.

Well, thanks. Yeah, I don't want to give legal advice to consumers. I can tell you that regardless of whether there's a viable class action to be filed, that would be an extended process. It would be financial compensation. not affirmative injunctive relief like we saw here last year from PUCO. So that would be a two, three-year litigation item if it's viable. And again, be limited to financial compensation, not the equipment upgrade that we desperately need yesterday.

Thank you. Thank you. And for those who aren't attorneys, can you define affirmative injunction, really? I think I understand what you mean, but I just if you could maybe explain that.

Yes, President Keppel, most of the times you hear injunction, a party is enjoined from doing something. They have to stop a conduct. So somebody's doing something, you sue for an injunction to stop it, stop a development, stop this, stop this. But when a court or regulatory body affirmatively requires conduct, That is simply called an affirmative injunctive relief.

Great. Thank you. They have to supply us with reliable power, essentially.

Well, in this case, the affirmative injunctive relief in this case was new transformers, new equipment, review the equipment, and upgrade the equipment. Great.

Thank you. Thank you. Vice President Baker.

Madam President. Councilman Bullock. So on this topic, it's a good line of question. And I do have an OCC question. Again, we've been talking about getting at the root cause, which is the preventing or correcting the breakdown of equipment. There's a whole separate conversation we haven't gotten into tonight, which would be to attempt to facilitate at least some partial reimbursement by Lakewood residents of damages. Now, what I'm researching and everything I've heard over the years is that the state law does not require or obligate the utility for any damages when there's power outages, which seems pretty outrageous because I don't remember getting a discount on my bill when the power goes out and all this inconvenience comes. And I haven't had the chance. Council members, I've shared a survey of residents that 297 different residents reported their actual experiences this July, and many had to spend on hotels or meals out. or scrambling by generators, and all those costs are beyond what their normal family budgets would afford. So even if it's not dollar for dollar, there could be, and I think there are ways that the city might facilitate a variety of strategies to get some partial reimbursement. My question for OCC is, are you aware if the illuminating company even though it's not required, may nevertheless offer a partial reimbursement for spoiled food if the consumer documents it, et cetera. I know that some utilities do that, but I can't find a clear answer right now. I haven't sat on the 800 number for a long, long time.

Unfortunately, I don't have an answer specific to First Energy if they have a line or a program for reimbursement of consumer goods. However, that is something that we often comment on in cases is to make that more widely available if not required.

I'll just, oh, yeah.

On an individual basis, I am not aware sitting here whether or not First Energy has that type of program.

Okay, so it's probably difficult, if possible at all, direct to the utility. There may be other workarounds, which probably is subject for a different discussion, but thank you.

Thank you. I'll just add that this is something that we, the city, Mayor George and I both asked First Energy to do. Mayor George, you want to talk about that?

Yeah, I was just going to add, this has been requested of First Energy directly. They have informed us that their tariff prevents that. they could change their tariff to allow that. But also the recent formal complaint to PUCO, we did request for refunds or credits to rate payers. So we're anxious to hear back on that request.

Thank you. I'll just note that their tariff prevents them from giving our residents money back for spoiled food, but they can put their name on the Brown Stadium, apparently. So that's an interesting choice. And, you know, we did also ask them this recent, you know, previous ones this time and this last time during the outages, during the sweltering heat leading up to the 4th of July, after it was pretty much over, they offered one case of water per customer. So, you know, the likelihood of them doing it out of the goodness of their heart I think is low.

Yeah, just to add some commentary to that, I also asked if they could at least deliver the water to Cove so we could get it to residents in need, and they denied that request as well.

But good question. Okay. So any further questions from council members for on the record questions for OCC or law department? And Director Vargo, if we enter executive session, is it appropriate for Mr. Brodbeck to join us since they've been working with us on this case or no?

PRESIDENT KEPPEL, I WOULD REQUEST THAT WE HAVE AN EXECUTIVE SESSION IN THE FUTURE BECAUSE WE ARE STILL DEVELOPING OUR LEGAL STRATEGY FOR THE RATE CASE. WE'VE DETERMINED TO INTERVENE, WE HAVE BASIS, BUT WE'RE GOING TO SET FORTH A STRATEGY, THE THREE OF US, BASED ON RESEARCH, BASED ON CONVERSATIONS WITH OCC, AND IT WOULD BE FAR MORE MEANINGFUL TO COUNSEL, I BELIEVE, AFTER RECESS TO HEAR FROM US IN EXECUTIVE SESSION.

Okay, but I guess the question, though, is if we do choose to have one tonight, would it be appropriate to include Mr. Brodbeck or not?

It would, President Kev, it'd be fine because we have a joint agreement with the OCC to maintain the attorney-client privilege among us. We have a common interests in our cases against First Energy. And therefore, we would not breach any attorney-client privilege by speaking in front of Mr. Brodbeck. So he could attend. I'll ask Ms. Swallow to confirm that. Do you agree with that?

I do. Thank you. All right. So with that, though, I want to make sure we have time for public comment since we've spent a lot of time tonight talking about how powerful your voices are. We want to make sure we have time to hear them. And grab the sheet. When I call your name, if you come up to the microphone, it's already on, so the one Mr. Brodbeck was speaking at. You'll just state your name for the record and your address if you're comfortable. And you'll have up to five minutes to speak. Address the chair, that's me. And avoid personalities. And I think that's it. All right, so with that, first up, Mr. Blackwood, did you still want to speak? Okay. So then we have Nico Roux. Apologize if I didn't say that correctly.

No, you got that right. Thank you. I want to start my comment and just start with a statement of gratitude, right? I've lived in Lakewood the last eight years. It's very clear and obvious that everyone in this room is frustrated by the same problem and seemingly working really hard to try to get creative with ways to solve it. You know, we're all aligned here that, you know, if we come out of this, you know, in a year or two and the outages are far fewer in between, you know, that's a win and I'm really refreshed to hear that. So thank you. I'm also really refreshed to hear that we're taking creative measures to try to maximize our leverage with First Energy in trying to bring them to the table. And it's to that comment that I'm here speaking today. It's very clear that First Energy just, they don't have a meaningful deterrent from performing this type of behavior, especially with the cities of Lakewood and cities similar to Lakewood. The example came from the mayor's table earlier where we are one of the oldest, if not the oldest infrastructure with one of the poorest grids in the state, yet as a municipality we are among the most population dense. I mean, in a free market, if this wasn't a regulated monopoly, we'd be their ideal residential customer. And if we had options, this would be the perfect case to churn as that customer. But because we lack that, there's no viable deterrent, at least from First Energy's perspective, for them to care. And otherwise, they would be here tonight to answer for it. I've worked as a consultant for some of the largest governments in the world, the federal government, some of the largest energy providers and public utilities, and there's an asymmetry in their thinking between how they operate and how this room is dealing with the problem and the rules to the game and how we operate. And that asymmetry stems from the fact that This room is operating within the set of rules for which it can control to try to hold them accountable. And First Energy is doing the same thing, except they're involving another player, and that's the State House in Columbus. We've alluded to at the Mayor's table that they're all too frequent in the pockets of that State House. And my fear is that by imposing some of these reactive measures we've discussed today in responses to their recent breaches, that even if the judges in Ohio get in alignment, all the municipalities in Ohio get in alignment, PUCO gets in alignment, and the maximum penalty per incident is levied as maybe a credible deterrent, that same influence in the state will just remove the teeth. And that's what First Energy, if I were them, they'd be banking on. And the one thing, going to maybe Councilman Baker's point earlier, as he alluded to the state constitution, the one thing that those folks in Columbus, who's another party that needs to be at this table, that they don't get to seem to intervene with as much is the state constitution. And I know that there's plenty of laws on the books around what municipalities can do to bring citizen-led ballot initiatives to the state voters of Ohio. But it's that very clear definition that gives us gray area to then operate again to try to maximize that leverage. any opportunity that the city has to partner with other like-minded municipalities to perhaps bring a state ballot initiative in attempts to hold companies like First Energy accountable. I admit, it's probably not the intended use case of the state constitution, but this is the rules of the game that we find ourselves in. And this is the asymmetry that companies like First Energy with $30 billion market caps are playing with versus perhaps maybe what's going on in this room and other municipalities like us. So I would just ask that in the spirit of being creative with how we employ the law, that we investigate anything we can do from driving or at least helping to foment, even in unofficial capacities, state laws and ballot initiatives that could put pressure on First Energy to be accountable to ratepayers, because even if at nothing worse it doesn't pass, every dollar they have to spend fighting ballot initiatives might be cheaper to just fix the problem. So thank you for letting me speak today. My name is Nico Roux. I live at 1421 Cordova Avenue. I think I'm in Ward 1. Thank you. Shit.

Thank you. And I appreciate that. Also, would you want to give a shout out to our state electeds here that represent us here in Lakewood, both State Representative Tristan Rader and State Senator Nikki Antonio, who've both been supportive in this matter. But of course, they're in the minority at the State House and the party that did not take bribes from First Energy. Okay, so, but to your point also about the ballot initiatives, you know, the State House is aware of the power of ballot initiatives, and you see that because they have tried to change the rules around citizen-led ballot initiatives as well. So you're not wrong about the power and that they recognize it as well, or they wouldn't be trying to stop it. So thank you for bringing that up. All right, next up is... Karen Pezento.

I live on Lake between Cove and 117. And when we had a power outage on June 16, most residents, their power was restored within eight hours, which of course is much too long. But my building, for some reason, was 13 hours, even though the building on either side of me came back on at 8. I'm also one of the seniors that was stuck in an elevator thanks to First Energy, and I want to commend the fire department for coming within half an hour to liberate me. I want to say about what Councilman Bullock and a few others have brought up, which is like reimbursements to consumers for lack of power, lost food, medical emergencies, and so on. I moved here from New York State four years ago, and I can tell you in New York that if the power is off more than four hours, which is the FDA standard for refrigerated goods beginning to deteriorate without refrigeration, the utility is required to give consumers $250. as reimbursement for lost food. Now, I don't expect First Energy to give everybody $250, but I think it really would be something, at least as part of a settlement for Lakewood, that everyone should get $100 per incident. Because I can tell you, I've had to spend more than that six times this year. I happen to still be working, so I can accommodate this expense. But as you know, we have many seniors that are retired. They either have very small pensions or only Social Security. This is a significant loss for them. I also want to say the idea of having an escrow fund is not a bad idea, in my opinion. But I think it has to go further than that. Mr. Bullock had like a Facebook inquiry and I read that the people were saying they end up in the hospital because their medical equipment couldn't be powered. I can tell you I know someone individually who is restricted to an electric wheelchair. The power went out. She could not see anything. Her aide had gone home for the day. She couldn't recharge the wheelchair. She was stuck in the chair for eight hours. Now you can imagine the consequences of this and the indignity to her. This should not happen. Another issue I want to bring up is because we have so many senior congregate living situations in Lakewood, are they required to have a backup generator? Because unfortunately, even if First Energy tomorrow suddenly developed an impetus and start fixing everything, this situation won't be resolved for at least another year or two. Now I know that would be an additional expense for the senior residences, but perhaps as part of the reimbursement, First Energy could have a fund so these locations can get backup generators as part of an interim measure, you know, an action that would be a kind of reimbursement without them direct payments. I also just want to mention that I'm now in a position to buy a house or a condominium, but I've decided I cannot do it in Lakewood, though I would like to because of this kind of thing.

Thank you. Yeah, and that's tough to hear, but I understand. This is a life and death issue for many residents, as we've all heard from literally hundreds, thousands of residents about this. We witness it ourselves, our neighbors next door. Every time it happens, it's not just an inconvenience. It's really, truly life or death for many of our folks. So it's a critical piece. And to the point about the high-rises, some of the buildings are grandfathered in so that the code does not require them to have a generator. Mary, you can correct me if I'm wrong about that one. Unfortunately, because this happens so often, we have these conversations a lot. But to that point, as we've talked about with microgrids, the potential for especially some of the high-rise buildings to have solar panels and have electric backup and some other sustainable solutions that reduces their reliance on first energy as well as provides those emergency solutions. But some of those things so that I think it's yes and all of the above is that we keep fighting on this front and we also look for creative and sustainable solutions on all levels. So thank you for those good ideas.

Madam Chair?

Yes.

One quick observation. The last couple of comments have been about what the state laws allow and not allow. I was having a conversation with somebody in the administration today pointing out that Something you touched on, I think that we have a state delegation. They could propose some changes to Ohio Revised Code that exempt the utilities from all damages or would implement a standard closer to what New York State has. Thank you, ma'am, for sharing that because today we're at the other end of the spectrum. Now, easier said than done, but kind of like Councilman Baker is saying, maybe you study the municipalization option. we start climbing. And I would actually be a little bit optimistic. I think there is some bipartisan frustration in Columbus with this kind of indefensible experience from the utilities. So it may be that we have more to work with than not. I'll make a note to myself to follow up with one of our legislators.

Thank you. And I do think, actually, I think Representative Rader has a bill. right now that I will have to come back to. But it's related to this issue. And to your point, this is really a nonpartisan issue in the sense that reliable electricity affects everyone. All right. Next up is Gary Federley.

Good evening, everyone. I'd like to thank everyone for taking the time to listen to me, particularly the council and the administration. Thank you. I have a couple concerns. I attended the last meeting, the meetings last year at the Lakewood Public Auditorium, and I heard First Energy tell us it takes five years to get a transformer and a that I won't say it humored me, but I lost all credibility for what they had to say. That's a ridiculous statement and they never, one member of the audience said that at no time did they ever apologize to any members of the community or the community as a whole. And I think that deserves repeating. At this point I don't have a lot of faith in First Energy at all. There was an issue that I had that I don't think that anyone had mentioned, and that was my air conditioner condenser browned out and made terrible noises, and I turned it off. And those conditions take years of life off of your utility, particularly refrigerators, and so there's an unknown cost to everyone in this community with their utility. And I do know my power has gone off intermittently for short periods of time and the lights have blinked and I live on Lee Dale and I'm not sure how the grid works. I make no pretense to knowing being an electrical engineer. But I think that's an issue that might be looked into. I'd like to say that I support the administration extremely in all their efforts. And Consul, particularly Consul Baker, in your comments, Anything you can do to put pressure on First Energy, I think, would be conducive to resolving the situation. I think we'll be lucky to get much out of them. They obviously have a lot of resources. And I really appreciate all your efforts. And I support Consul and the administration, and I wanted to let you know that. So thank you for your time again.

Thank you. We appreciate that very much. And to your point about the brownouts, I did hear from another resident, too, who was suggesting, you know, looking at whole home surge protectors. And, of course, that also costs people money to install. And it's one of those things is when we also talk about generators for folks. I mean, we're all thinking about how we survive and respond to these ongoing conditions, which we unfortunately have to do, while also trying to stop them from continuing to happen. Yeah, sure. Yeah. Thank you. And I think that's something, you know, from the law department, it probably won't come up in the rate case as much, but in future cases too, you know, it's those kind of preference things. And for anyone listening at home who maybe couldn't hear that, the comment was about preferring losing power to the brownouts because of the damage. And I'll just note, too, is that similarly with the communication, you know, we have repeatedly asked First Energy not to send communications with an estimated time of restoration that isn't based on any facts. And they have told us in some of the previous ones, oh, you know, as we're desperately trying to, you know, contacting our council members. We're all trying to put it out to the community. OK, can you give us any information? And find out that those ETRs are often just automatically generated. So when it goes out, it's two or three hours later. And that's what they say your estimated time of restoration is. before they've even arrived on the scene to check it out. And so that having misinformation is worse than no information. We would much prefer that they just tell us it's out. We don't know why. We'll let you know when we know why and when it's going to be back on. Because it's really harmful if people think it's only a couple hours versus a day or two. And people need to be able to make decisions accordingly. Vice President Baker.

Thank you, President Keppel. And the one thing I, and I'm sure the law department is on this, but if not, I'd be reluctant not to mention it. We discussed the tariff a little bit, and for folks that are uninitiated, essentially it's kind of like the contract of adhesion that all utility customers have to apply by to get power from First Energy. And First Energy regularly, I'm not sure how often OCC can probably help us here, but they have to go before PUCO and get that tariff reaffirmed or updated every some period of time. Is that accurate? And so I guess what I'm saying is what First Energy often does is they propose this tariff and they say, hey, PUCO, approve this. And in that tariff it says, we don't have to pay any damages to anyone if they lose their groceries. We don't have to pay anything if someone's air conditioner goes out. We don't have to pay anything if this happens. And it sounds like what New York State did is said, every time power goes out for more than four hours for non-weather related issues, $250. And so I think there's something that we can also do as a litigation strategy or a legal strategy is like, when that tariff is up, we have a concerted effort as a city, letting our residents know, to put comment into PUCO to have them change that tariff. Now, I may have described it incorrectly. And I'll ask the member of the OCC to correct me if I'm wrong. Sorry.

at home, so they have to have the microphone on to hear.

Oh, yes. Rate cases, as of a recent law change, are now forecasted every three years. It's a regular rate case situation. Historically, it was when utilities wanted to. The reliability law for reliability performance standards is currently still written that way. That it is just stated when a utility wants to apply effectively. That's not a quote. So a lot of it was just by the utility's own volition in the past. But now we do have regular rate cases, and that would impact the tariff language, or it could.

Thank you. All right. And then last up is Don Nottage. Welcome back.

My name is Don Nottage. I live at 2159 Morrison in Lakewood. A lot of speakers, previous speakers have stolen some of my thunder because a lot of the points that I was going to make have been very eloquently covered. And that's great because it saved me some time. So to Madam Mayor, to Madam Council President, good evening. Thank you for this amount of time. I'll start out with the good news. The good news is that I was very encouraged by what I read tonight and what was put forth tonight. Last time I was here, it was shortly after my respiratory event that ended up me being in the Lakewood emergency room because of the heat and humidity and the failure of power, et cetera, et cetera. And I kind of held people to task. And I was very encouraged by, Madam Mayor, what you responded with. And I am very encouraged by what I saw what I saw tonight going forward. Actually, Councilman Bullock, this survey, and I grabbed this because I wanted to mention this and enter this into record, this was very, very valuable because it puts a human face and human experience onto what occurred due to First energies, how do we want to define it? Not negligence, but lack of, well, let's just leave it at that. Let me read a couple of things. 66% of respondents lost food because of power outages, myself included. We went to Whole Foods a couple days before, spent 200 and some bucks on food items and thought that they would keep, they did not. So 62% made unplanned purchases, 56% lost vital communications, myself included, 38% lost work hours, wages or customers, 28% reported adverse health effects, with many unable to operate medical equipment. Seventy percent said they had to replace spoiled food or spend money on restaurant meals while almost half purchased coolers or ice to protect food and medications. Hello. One in six respondents reported buying generators or backup battery systems. Health concerns were a recurring theme throughout the report. This can't be mentioned enough during this whole process. And that's why we're here. And that's why it is important for this side of the aisle, so to speak, and this side to come together and put aside everything else. We have a common, I don't want to say enemy, but a common nemesis here that hasn't been really square with us. Let me point out... Okay, let's jump to this. On August 19th, Brian Tierney, CEO of First Energy, is holding at the Union Club an informational luncheon that you have to pay to go to. We shouldn't have to do that. We need this information offered freely and encouragingly to all of us, to the citizens of Lakewood and the region. I find that kind of ironic and humorous. And then all of a sudden, this was July 18th, 1,172 customers lost power. Now, this wasn't during the period of extreme heat. It was prior to the storms hitting, and this whole region, Edgewater Hill, Lakefield, Detroit, this whole region lost power. Now, they haven't been straight with us, and they haven't been encouraging us to engender them with confidence. to have confidence in them. I just have to go back to the beginning, to the good news. I am glad that we're working together, that our government is working towards holding them accountable. And let me just add, today, just today, in North Royalton, where my wife works, her company, a major construction firm, lost power. That's outside of Lakewood, I know. But still, it just happened, and it's happening in other regions as well. And the more this is discussed by the public, by the citizenry, by residents, by those involved with this situation, the more, I think, the more awareness that will be, well, obviously, the more awareness that will be developed and the more tools that we can offer by tools I mean direct experiences of people that have been impacted. So let us be involved with helping you do the things that you need to do. Thank you very much for your time.

Thank you. I couldn't agree more. A couple weeks ago, my article in the Observer was called Power to the People, because we keep talking about this point about the importance of not just the public comment, but public engagement. Seven of us up here, one mayor. There's a small law department where we have only so many levers, but when we act together as a citizenry of almost 50,000 people here in Lakewood speaking out, and taking action, it really does have more power. We have more votes. We have more accountability. So in addition to your points of we continue to speak out using the systems we have with the Public Utilities Commission of Ohio, as well as there's other actions that I put in the article that we can all take, all of us, whether elected office or not. is signing the petition to limit the expansion of large-scale data centers, which is also a potential drain on our resources. There was just a case before the Ohio EPA too where they reversed the decision to let them dump wastewater from those centers into our public water streams as we're spending millions to not pollute, update our sewer system here to not pollute. So that's one action people can take, as well as, you know, it does matter who is elected to statewide office. And I won't speak to those particular candidates, but just encourage folks to look up people's stances on statewide candidates this November and how they might impact this fight that we are in. So just some of those things. But another component is I do appreciate the administration putting up this page on the website. I think part of this is that we are all so busy trying to respond to individual constituents. work to fight First Energy, work to help residents, that sometimes it's difficult to get the communication out of all the things that we're doing, especially those of us who are part-time up here. So it's helpful to have this resource. We also keep pushing, both the mayor and I keep pushing First Energy to communicate themselves directly with you so that we don't have to keep being intervening but it's important what we we are going to keep communicating the actions that we're taking and encourage everyone to stay engaged because we are going to need you with us in this fight for sure all right that's everyone i have signed in for public comment did anyone else wish to speak who didn't get a chance to sign in no okay All right. Council members, we have the option of going into executive session. If you have questions that you feel like would be better answered in executive session at this time, we can do so or we can schedule that. I do anticipate scheduling a few more Committee of the Wholes. One, I will be inviting First Energy to come and speak with us. AND I ALSO ANTICIPATE HAVING SOME DISCUSSION ABOUT SOME OTHER SOLUTIONS, SO THERE WOULD BE AN OPPORTUNITY AT EITHER OF THOSE AS WELL. THOUGHTS FROM COUNCILMEMBERS, ARE THERE QUESTIONS YOU'D LIKE TO ASK AT THIS TIME? COUNCILMAN EFFENS.

THANK YOU, PRESIDENT CAPITOL. I AGREE WITH LAW DIRECTOR VARGO. IT MIGHT BE BETTER USE OF OUR TIME AFTER THE BREAK ONCE THEY'VE HAD A BETTER CHANCE TO align their strategies for continuing litigation to answer those questions, just to make it more efficient for all of us.

Thank you. I also think it's going to be important once we get those documents that we've requested. One of the questions that I asked is, again, both is for the law department's interpretation of is First Energy, so not just the rate case, but is First Energy in compliance with what they stated in their plan that they would be doing as ordered by PUCO for both infrastructure and communication? It's hard to imagine that when they cut off communication with council members during the July 4th outages that they are in compliance with the communication plan. But I could be wrong about what it states, so that'll be interesting. Vice President Baker.

Thank you, Council President. And, yes, I agree that, you know, waiting until we have a little bit more information in the law department to go into executive session would be good. I also think that, you know, a reason to go into executive session is, you know, talk about initiating litigation, but also the acquisition of real property. which we can talk about as far as acquiring First Energy's assets. So I'll say that, that that's another reason to go into executive session and discuss those things. And I would be happy to work with the law department to figure out how we might find out a way to at least get our hands around what it is. Thank you.

MS. Council members? All right. All right. So with that, then I'll just ask members of the public, stay tuned. We will be having more meetings, I'm sure, on this topic. And we'll keep going on the fight. So with that, then no further business to come before council. We are adjourned.