Ex-entrepreneur accuses CMP’s parent company Avangrid of bid-rigging, racketeering


The parent company of Central Maine Power Co. is being sued by a former subcontractor who alleges the company engaged in bid-rigging, racketeering and buying unnecessary equipment knowing the costs could be recouped through at higher electricity rates for customers in Maine and elsewhere.

The federal lawsuit against Avangrid Networks, a subsidiary of Avangrid, was filed Monday by Paulo Silva, cybersecurity expert and CEO of Pennsylvania-based Security Limits Inc., in the U.S. District Court for the Southern District of New York. Avangrid is incorporated in New York, although its headquarters are in Orange, Connecticut, and is owned by Iberdrola, a multinational corporation based in Spain.

In response, Avangrid described the plaintiff as a disgruntled and bitter ex-entrepreneur because the company chose not to continue working with him. He categorically denied his allegations.

The lawsuit seeks more than $ 600 million in damages, including punitive damages, which are three times the actual damages.

The applicant’s company provides technology, engineering, architectural and consulting services. The lawsuit alleges that Avangrid participated in “a brazen racketeering scheme, filled with bid-rigging, accounting manipulations, warehouses built solely to house mountains of unused equipment bought under false pretenses” and theft of proprietary trade secrets.

Maine is mentioned in the legal complaint in an allegation that, in late 2018 and 2019, Avangrid purchased “tens of millions of dollars” in equipment from a competitor of the complainant “at superior prices and without competition.” As of January, according to the lawsuit, much of the equipment was not in use in warehouses in Maine and New York.

The complaint provides no further information about the alleged Maine warehouse, and neither CMP nor any of its officers are named in the lawsuit.

In a statement released Friday, Governor Janet Mills called the allegations “alarming and deeply disturbing.”

“Maine provides its electric utilities with a monopoly, and in return, they owe the people of Maine reliable service at fair and reasonable rates – nothing less,” said Mills. “Any wrongdoing or misconduct that harms the people of Maine deserves prompt action, responsibility and consequences. I call on the Maine Public Utilities Commission to closely examine the federal complaint, examine the purchase history of Avangrid Maine equipment, and ensure that no Maine CMP taxpayer has been or is will be harmed by these activities if this turns out to be true.

Silva alleges that Avangrid rigged bids and bought unnecessary equipment because she knew she could recoup her capital expenses, as well as a 7-15% profit margin from the rate hikes requested from service commissions state public. He also alleges that the company directed work towards privileged subcontractors by the way it handled the tendering process and that it stole trade secrets from Silva’s company to give them away. to its competitors in order to give them an advantage in this process.

In a statement, Avangrid Networks called Silva “a disgruntled contractor, bitter that he failed to win the public contracts and that his relationship with the contractor has deteriorated.”

Avangrid Networks said it was aware of the lawsuit but had not yet been served.

“The allegations and claims have no basis and the company will defend itself vigorously,” the statement said.

The company also said Silva was interfering with Avangrid’s proposed merger with PNM Resources, an electric utility in New Mexico and Texas, in an attempt to win other contracts “based on false claims. “.

Regulatory authorities in New Mexico are investigating further allegations against Iberdrola, and staff at the state’s Public Regulatory Commission have recommended not to merge, according to Searchlight New Mexico, an online investigative journalism site. A majority of committee members said at a meeting Wednesday that they would vote against the merger, Searchlight New Mexico reported.

Acting Maine Public Counsel Andrew Landry said the allegations in the lawsuit “are of great concern, particularly those relating to the alleged sale of unnecessary equipment to US utilities in Avangrid, including Maine.” .

“We intend to follow up on the matter and, if shown to be justified, to explore under an appropriate PUC procedure whether CMP customers are being charged for such equipment,” said said Landry.

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