Quanta Services appeals dismissal of its lawsuit over LIPA contract

Quanta Services last month filed notice of its intent to appeal the dismissal of its lawsuit against LIPA and six of its trustees that charged they acted unlawfully in canceling a 2025 bid for a new grid operator.

On Dec. 30, acting state Supreme Court Justice Philippe Solages Jr. had dismissed Quanta's legal challenge as "untimely."

The back-and-forth in state Supreme Court and now the state Appellate Division is the latest chapter in Houston-based Quanta’s effort to overturn a series of decisions by LIPA's board that ultimately rejected Quanta’s bid to take over the grid management contract. LIPA trustees instead approved a $493 million, five-year contract extension to PSEG Long Island.

In dismissing the case, Solages, a judicial appointee of Gov. Andrew M. Cuomo, echoed LIPA’s arguments that Quanta’s lawsuit was "time-barred" because it was filed outside a four-month window for such claims.

"Since LIPA reached a definitive position on [Quanta’s] proposal on April 30, 2025, Quanta’s involvement in the process ceased on that day, and any proceeding challenging that decision should have been commended by the end of August 2025," Solages wrote. "Instead [Quanta] waited until Sept. 18, 2025 to file the instant petition. Accordingly this petition is dismissed as untimely."

Quanta had argued that it was the board’s unprecedented May 20 decision to cancel the request for proposals entirely, and not the board’s April 30 decision to reject Quanta’s superior bid, that had started the statute clock running.

The rejection came despite a LIPA committee’s finding that Quanta "demonstrated experience and qualifications across the required range of operations services, as well as experienced leadership with a strong track record." Quanta had also agreed to discounted fees for its contract for the first three years, of 15%, 13% and 12%, respectively, according to its suit. Its bid was "materially better" than PSEG’s proposed offer and past contract, the LIPA committee found.

To make its case in court, Quanta had pointed to correspondence from LIPA general counsel Bobbi O’Connor confirming that the bidding process "remains an active procurement" as late as May 2, amid concerns that Quanta’s "name was being besmirched by comments in the press." The email thread alleged a "representative from PSEG directly reached out to [a reporter] to write a negative story about the recent outages in Puerto Rico," where Quanta has a joint venture to operate the electric grid.

Quanta, a Fortune 500 energy infrastructure company, previously outbid PSEG in a competition to manage the Puerto Rico grid, which suffered years of outages after storm damage and a utility bankruptcy.

In a statement to Newsday last week, Quanta said it "stands by the merits of the proposal submitted to LIPA, which was unanimously selected by their evaluation committee following a thorough, expert-led review."

All three LIPA officials who had made that recommendation have left the authority. Acting chief operating officer Werner Schweiger and senior vice president Billy Raley, who alleged they had been pressured to lower Quanta’s score, were dismissed. Both have filed ethics complaints and notices of their intention to sue LIPA.

The third official, interim chief executive John Rhodes, left LIPA in July after Carrie Meek Gallagher took the reins.

A LIPA spokesman said the utility has no "further comment at this time."

The state Attorney General's Office approved the PSEG contract. State Comptroller Thomas DiNapoli also approved it in December, with conditions.

In a letter released as part of the approval, his staff wrote that if the utility is found to have engaged in criminality, fraud or abuse as a result of investigations, LIPA should immediately terminate the contract and seek a new bidder.

The state inspector general is investigating the Long Island electric utility but has not issued any public statement about the probe beyond confirming its existence. Nassau County Comptroller Elaine Phillips is reviewing the PSEG contract award at the behest of Nassau County Executive Bruce Blakeman, the likely Republican challenger to Kathy Hochul for governor this November.

Quanta in its statement suggested its LIPA ambitions were not extinguished. 

"We remain committed to LIPA’s 1.2 million customers and confident that our qualifications and customer-focused approach would provide better reliability, storm response, and long-term value," Quanta said.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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