Behind-the-scenes struggle occurring over LIPA contract to manage electric grid

As LIPA’s board prepares to meet in private again Monday to discuss which company will manage the Long Island electric grid, forces are working behind the scenes in a last-ditch effort to sway support for companies vying for the long-term contract.

Several people with knowledge of the matter say the Long Island Power Authority board is wrestling with the question of whether to award the contract to Houston-based Quanta Services after the global energy infrastructure firm received high scores from LIPA staff reviewing the bids.

PSEG Long Island, which has had the contract since 2014, is also in the running. In recent weeks, people with ties to PSEG have been attempting to leverage difficulties at the Puerto Rico electric utility that Quanta helps run in an effort to criticize that company’s record.

Last week, former LIPA board member X. Cristofer Damianos wrote an editorial in a local business newspaper urging caution in awarding the contract given recent accounts of problems in Puerto Rico.

Damianos, who heads a local real estate firm, didn’t respond to a message seeking comment. In an interview, publicist Gary Lewi, who works as a consultant to PSEG, acknowledged that he was "working with Cris" on the column "because he’d asked me regarding the op-ed."

"I certainly had a discussion with him [Damianos] making sure that he’s fact-checking" his column, Lewi said.

PSEG didn’t respond to a request for comment, including whether it had authorized or directed Lewi to help write the editorial, which blames Luma Energy, the Quanta joint venture, for "blackouts, lack of maintenance, failure to maintain the balance between energy supply and demand within the system, and lack of cooperation with the government to oversee its performance." Reports Wednesday said Puerto Rico’s governor is considering dropping Luma.

A senior Quanta official, in an interview with Newsday, pushed back on the criticisms, noting a $10 billion bankruptcy that had beset Puerto Rico's electric utility and a 2017 storm that heavily damaged the infrastructure. Quanta has built back the Puerto Rico grid "from decades of mismanagement, decades of underfunding," the official said.

In a statement, B.J. Ducey, president of strategic operations for Quanta Services, Inc., said, "From storm response to customer service, there is no reason for Long Islanders not to have one of the best electric systems in the country, let alone the world. We strongly believe in our capabilities as a service provider, and we are driven by our belief that Long Island deserves better.

"Our 62,000-strong Quanta team, including 2,000 employees across New York State, has the experience, training, and expertise to help deliver what the 1.2 million Long Islanders expect and deserve — better storm response, improved customer service, world-class workforce training in safety, affordable electric service, and a utility that puts their local energy concerns and interests first."

LIPA declined to answer a series of questions from Newsday asking about Quanta’s score in the review. Nor would the utility address how LIPA expects to receive needed approvals from the state comptroller and attorney general if the board awards the contract to a company that was not recommended by staff.

One local activist group, the Long Island Progressive Coalition, has brought concerns about PSEG's lobbying activities in opposition of a fully public LIPA to the attorney general's office, Newsday has reported. The office has not commented. PSEG Long Island has not been accused of any wrongdoing.

Mark Fischl, a former acting chairman of the LIPA board, said the prospect of the LIPA board not taking a staff recommendation in awarding the next service provider contract would be "absolutely inexplicable."

"It never would have happened, and certainly didn’t in my 10 years as a board member," Fischl said.

Among the firms said to be helping to defend Quanta against the campaign critical of its Puerto Rico service is Greenberg Traurig. Todd Kaminsky, a former state senator from Long Beach, is a registered lobbyist for Quanta at the firm. He declined to comment.

PSEG, as Newsday has reported, in the past several years has hired several high-powered lobbying firms, including for a successful effort to quash proposed state legislation that would have cleared the way for LIPA to operate the utility itself. 

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.