LIPA-Navigant claims delay power plant contract
The Long Island Power Authority will delay a crucial step in the awarding of a power plant contract as it reviews state claims that a consulting firm that helped process the bids had overcharged LIPA for years.
LIPA at a trustees meeting Thursday had planned to name the preferred candidate to develop the new plant and to begin the process of environmental reviews. The finalists are a proposed expansion of the Caithness Energy facility in Yaphank or a new contract to JPower for a facility in Shoreham.
LIPA spokesman Mark Gross Wednesday confirmed that the power plant announcement won't be on the board's agenda but said it could be "addressed at a board meeting in the near future." LIPA trustees aren't scheduled to meet again until September, but a special session could be called during the summer.
The delay follows release of a report from Gov. Andrew M. Cuomo's Moreland Commission that found, among other charges, that Navigant Consulting charged LIPA "exorbitant" rates for work and excessive travel costs. The company's top consultants and executives billed LIPA for thousands of hours a year at rates as high as $500 an hour -- taking up nearly half of LIPA's consultant budget of $64 million between 2008 and 2011 -- and charged LIPA for flight upgrades and expensive hotel stays. LIPA didn't audit the charges, the commission found.
The commission also described a "revolving door" of executives moving from LIPA to the company and vice versa. The commission referred its findings to the U.S. attorney's office for the Eastern District of New York for a possible criminal investigation. A U.S. attorney's office spokesman declined to comment.
Gross said that LIPA has not been contacted by the U.S. attorney's office, but added the authority will "continue to cooperate fully with governmental authorities."
It's unclear whether the delay in the power plant project is related to the Moreland Commission report. Gross said, "We continue to perform due diligence on the . . . [power plant project] in order to address our customers' future energy supply needs."
LIPA records show Navigant was heavily involved in the power-plant review.
The authority's request-for-proposals Web page is hosted by Navigant. Companies that responded to LIPA's bid proposal were required to send copies to Robert Kendall in Navigant's Westbury office. Kendall is the executive named in the Moreland Commission report whose billings exceeded $4.5 million over a five-year period at LIPA.
Gross said LIPA was "reviewing its Navigant contracts in light of the Moreland Commission report."
Julie Howard, Navigant's chief executive, in a statement Wednesday said the company "will cooperate fully with any investigation if and when one is initiated."
On Tuesday, the New York Power Authority, which supplies power to municipal utilities and businesses throughout the state, said it had put all its Navigant contracts on hold pending an internal review of the charges.