Lubbock Electric Utility Board hires outside counsel to investigate ‘serious allegations’; no action taken against director
Lubbock’s Electric Utilities Board voted Wednesday, Oct. 23, to hire outside counsel to investigate possible state violations in relation to the procurement of alternative electric generation.
“A full audit will be conducted,” said spokesman Matt Rose. “The board voted to take no action on the current status of the (request for proposal) until that audit has been completed.”
The decision came during a special meeting the board called after Mayor Glen Robertson aired publicly his concerns about possible bid-rigging in connection with a request by Lubbock Power & Light for proposals for electricity generation after 2019.
The utility board on Friday, Oct. 18, posted the special meeting for Wednesday in a move Robertson, who is also a non-voting member of the board, said was in response to the complaint.
Additionally, the board moved to take no action against Gary Zheng, the director of electric utilities.
The meeting’s agenda included an item regarding Zheng’s appointment, evaluation or possible reassignment.
The investigation was initiated by members of the board, including Robertson, after allegations of potential fixed bidding were relayed to city leaders by a third-party source.
“There were a lot of concerns brought up during an executive session last week – an LP&L board member, not myself – they were serious allegations from somebody on the outside,” Robertson said. “I felt at that time, that since these allegations were so serious, we as a council needed to look at it, and apparently this board now feels the same way.”
Robertson, however, said he is not making any direct accusations and anticipates a clear report from the outside party after a potential 30-day investigation period.
“I think it is time for everyone to just step back, calm down and let the people who have been hired to investigate do their job,” Robertson said.
When using public money, by law municipalities are required to take certain steps to purchase anything more than $50,000, according to Texas state bidding laws.
Because of the nature of the accusations involving the request for proposals, the board voted to take no action on the procurement of electric generation for the year 2019 until the issues have been addressed by the outside party.
LP&L issued a request for proposal this summer seeking a long-term purchased-power agreement to replace a current agreement Lubbock and other West Texas cities have with Xcel Energy through 2019.
“This has the potential to be $6.5 billion to $8 billion or more over 30 years,” Robertson said, adding such a move would be among the largest financial commitments by the city in its history.
The request states, “LP&L will select a wholesale power supplier that can supply up to 600 megawatts of capacity in the form of natural-gas-fired turbines or combined cycle.”
It adds the turbines are anticipated to be located on the city farm near 34th Street and east of East Loop 289.
It also states LP&L will consider proposals from “any qualified proposer, including electric utilities … independent power producers and qualified developers of generation.”
“It is a continual, good RFP,” Robertson said. “We are still going through the process, and we are still in the dark period, which means we can’t disclose any details about it or visit with any vendors. The only decision made by this board was the decision to hire an outside legal firm to do an investigation to make sure the RFP process was in accordance with the law.”
The law firm hired is Andrews Kurth, with offices in Austin, Dallas and Houston as well as overseas with a strong background in the challenges LP&L will face throughout the audit, according to Rose.
“That firm was chosen because of their expertise and sterling reputation in the energy industry,” he said.
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