The Long Island Power Authority Tuesday suspended its use of Navigant Consulting Inc. to review a proposed power plant project in the wake of a state report that found the firm charged LIPA exorbitant rates for work and travel expenses.
In a letter to Navigant Tuesday, LIPA chief operating officer John McMahon said the authority was suspending use of Navigant for the plant review and a smart grid-related contract "given the Moreland Commission final report and the resulting reviews of Navigant."
The New York State Power Authority, another one-time heavy user of Navigant, suspended its use of the Chicago-based firm last week.
LIPA said it had waited to suspend Navigant's contracts to ensure it did not need the firm to finish its review. LIPA had planned to announce last month the awarding of a power plant development project to either Caithness Energy or JPower for facilities to be built in Yaphank or Shoreham, respectively.
"The concerns raised by the Moreland Commission report led us to review our work with a focus on our ability to continue and complete the subject matter of the projects Navigant was engaged in," LIPA said. "We concluded we could and concluded suspension was appropriate." LIPA expects to finish its analysis of the plant project "in the near term."
Navigant referred to a statement issued last week, saying, "We take the questions raised by the [Moreland] Commission in its report very seriously.
"Our reputation depends on strict adherence to the highest ethical standards in everything we do and we are committed to maintaining and defending our strong reputation . . . " the company said. "We will cooperate fully with any investigation if and when one is initiated."
The commission probe found many Navigant consultants who worked for LIPA were based off Long Island and billed LIPA for travel expenses.
In one instance, LIPA reimbursed Navigant $6,815.30 for one consultant's 11-day Manhattan hotel stay, which included a room cost of $542 a day -- well over the state-mandated cap of $295, the report said. One top-level Navigant director alone billed LIPA for $4.5 million over a five-year period.