A utility construction company working for LIPA and PSEG Long Island claims the utilities mismanaged a controversial high-voltage cable project through North Hempstead, then shortchanged the firm by at least $1.5 million, according to a new federal lawsuit.
Energy Contract Recovery of Port Huron, Michigan, claims in the breach-of-contract suit filed in U.S. District Court in Central Islip that PSEG and LIPA failed to get permits and traffic control restrictions on time; did not accurately describe the site and underground conditions and failed to deliver materials needed for the job and to properly coordinate with other contractors.
When the contractor's representatives exerted their expertise to finish the project, PSEG employees rebuffed them and became "abusive and threatening," according to the suit.
ECR said it has sought payment for the additional work it was forced to perform, including on weekends, because of the delays and problems, but PSEG and LIPA have declined.
PSEG spokesman Jeff Weir said, "While we have not yet been officially served with a lawsuit, as a matter of corporate policy, we will not comment on pending litigation."
The 5-mile transmission line from Great Neck to Port Washington drew criticism from North Hempstead residents who claimed its 80-foot utility poles were unsightly and dangerous. The town wants PSEG to bury the line. The town was sued by PSEG after passing an ordinance that would have forced the utility to attach warning labels to poles, which are treated with a toxic preservative, pentachloropheno.
ECR was initially contracted by National Grid in 2013 to construct the 69,000-volt line, which PSEG said was needed to ensure reliable power to the region. The work was scheduled to begin in December 2013, but the necessary permits weren't secured until February 11, 2014, according to the lawsuit. ECR, for instance, said it mobilized workers in the Village of Thomaston the following March, but was told needed permits were not in place.
ECR said that when it was able to get to work, PSEG and LIPA failed to disclose site conditions. The company said it encountered boulders where PSEG and LIPA said none would be in the way to dig holes for utility poles.
ECR was supposed to control the "means and methods" for doing the work, but PSEG and LIPA often attempted to "direct and control" the work, the suit said. This often resulted in "unnecessary long cable runs, caused the work [to] take longer to complete" or forced the contractor to redo work it already had done.
When ERC rebuffed PSEG and LIPA's "ill-advised attempts" to direct the work, LIPA and PSEG employees "became personally abusive and threatening," according to the suit, and threatened "physical violence" at least once.
The contractor alleges that PSEG and LIPA directed ECR employees to stop work on the cable project to help with storm preparation and post-storm clean up, according to the suit, and failed to pay ECR at the proper rates for that work. The company also worked weekends to get the work done on time.In all, ECR said it billed LIPA and PSEG for more than $4.3 million in work performed, but the utilities paid only $2.7 million. The suit, which also accuses the utilities of unjust enrichment, seeks full payment of the $1.52 million and court costs.