The state has accused the company hired to conduct an...

The state has accused the company hired to conduct an audit of National Grid's gas and electric operations of presenting as its own work material that was provided by National Grid in response to auditor inquiries. Credit: AP / Bebeto Matthews

A consulting company hired by the state in 2018 to perform a comprehensive audit of National Grid’s gas and electric operations was fired in October for a series of irregularities in the draft report, including alleged plagiarism and a “lack of independent analysis,” according to a state filing.

The contractor, Raymond G. Saleeby Consulting Group of South Orange, New Jersey, was notified of its firing in an Oct. 1 teleconference, just weeks before Gov. Andrew M. Cuomo publicly criticized National Grid and the Public Service Commission over a gas shortage facing the downstate region that led the  British company to declare a moratorium on new gas hookups.

But the state discounted any connection between the matters, even though a part of the report's scope was to examine gas supply. 

"Saleeby Consulting’s audit failures are not connected to problems related to National Grid’s failure to adequately address Long Island’s gas supply demands," Department of Public Service spokesman James Denn wrote in an email. 

But the audit report was supposed to examine local supply issues. A state document outlining the scope of work specifically requires auditors to "assess the readiness, capability and possible impediments to meeting increasing natural gas load, and possible alternatives to new long-term projects like pipeline capacity, including the ability of conservation, temporary compressed natural gas facilities, demand response or other programs to meet peak load requirements in the future." 

It's unclear how delays in finalizing the report, which will now be completed by department staff, could affect the state's plan to address the problems. Cuomo has given National Grid two weeks to respond to the supply crisis or risk losing its franchise to operate in New York. 

 A Oct. 2 letter to Saleeby notifying the company of its "immediate" dismissal said it “identified several instances of material taken verbatim or nearly verbatim from internet sites and other sources and presented as [Saleeby]’s analysis in the draft report without identifying the material as quotations." 

The state also accused Saleeby of presenting as its own work material that was provided by National Grid in response to auditor inquiries. The contractor “presents many of National Grid USA’s information request responses as SCG’s analysis without identifying the material as quotations,” a pattern it found “consistent throughout multiple chapters of the draft report,” the letter said. The state found “some [National Grid] text is presented verbatim, and some is nearly verbatim with minimal words modified in what can only be interpreted as an attempt to create the appearance that [Saleeby] authored the text.”

More fundamentally, the state found the contractor’s work, on the whole, lacked “any independent analysis of the practices of National Grid USA.” The contractor “did not perform adequate cost-benefit analyses to support the recommendations made in the draft report,” even though the state contract required a “thorough analysis of potential benefits and costs.”

The state also found Saleeby used an “unauthorized editor in the development of the draft report,” something prohibited in the contract.

In a brief phone call, Saleeby said the state's accusations about his management audit are "horrendous … It's really just wrong. There's a lot of politics involved." He added in an email, "This was a format issue, nothing more" in what was a "highly focused" audit. "My team is among the best in the business with a history and track record that is unparalleled. Anything claimed that differs from that is unconscionable and simply wrong."

Revelations in an Oct. 2 letter from the state to Saleeby about the audit are “deeply troubling,” said state Sen. James Gaughran (D-Northport), because the report might have identified National Grid’s looming supply issues.

"We can only surmise it would have shed light on the supply issue," Gaughran said.

Gaughran said he will propose legislation that would give “tougher policing power” to the Public Service Commission, particularly if it’s found National Grid “purposely participated in fraudulently creating this audit.”

National Grid spokesman Domenick Graziani said the company has "fully supported" the state audit "in the interest of informing productive findings and recommendations and improving service to our customers. We have no comment on the dismissal of the contractor who conducted the audit."

The Public Service Commission as a matter of course requires regular comprehensive management audits of state utilities to examine the entirety of their operations and their ability to perform under a state franchise. The audits always include a long list of steps the utility will take to address shortcomings or problems identified in the audit. 

The order calling for the audit  noted it was the first time the state requested that National Grid's three state operating units be included in a single audit, which was due to be finalized in September. 

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