▸ The gist: Last week Jeff Jenkins, one of Bernhard Capital Partners’ founders, told The Current the company’s plans for LUS include making it part of what will ultimately be a Fortune 500 company headquartered in Lafayette. This week, his partner Jim Bernhard confirms that Lafayette has out-of-state competition for that proposed corporate headquarters, a city Bernhard says has an “advantage” over Lafayette because that contemplated transaction has not leaked to the press.
▸ Jim Bernhard points his finger at an unnamed “disgruntled employee.” (On July 13, The Current broke the story of the Robideaux administration’s plans to entertain an offer from BCP to manage LUS’s electric division.) “They have a utility we are attracted to, we looked at the university there and also because of the oil and gas industry there — we felt it was a place we could attract people to work for a long period of time,” Bernhard says. “We thought Lafayette was a good opportunity, and we thought it was the right place, but the other place has an advantage because we were not prepared to go public with our plans in Lafayette when some disgruntled employee leaked the information. But we decided we were not going to let a disgruntled person derail our plans, so we regrouped.”
▸ Bernhard says $15 billion will be invested in the new venture. Last week Jenkins would only say the company was in talks with “multiple” entities like LUS across the South, but Bernhard is now being more specific, saying the company hopes to acquire or take over management of 30 to 40 power companies in “mostly in small cities. They range in different sizes from $1 billion to $100 million.” While an early BCP assessment valued LUS’s electric division just north of $525 million, a comprehensive appraisal of the city-owned utility is still underway, and terms of a potential agreement could change.
▸ It’s unlikely this deal will fly in Lafayette, says one former LUS employee. Andrew Duhon, who retired from LUS in January 2017 after nearly 30 years — most recently as customer and support services manager — understands why LUS is so enticing. “We’re really like the star in the public power arena,” he says. Duhon, however, can’t imagine any scenario under which Lafayette stakeholders give up control of their 120-year-old utility system. He says since the early 1940s, when LUS was in desperate need of upgrades, poorly managed and in jeopardy of being taken over, the public has shown a willingness to reinvest. “Despite a much bleaker picture for the utility back then versus the model system we have today, the people of Lafayette decided to keep [the] system. They issued bonds for new generating facilities and developed a model bond ordinance that, among other things, required a well-managed system run by professionals,” recalls Duhon, who also is a CPA. “The citizens of Lafayette in the ’40s knew what they had — control of their economic destiny through ownership of their utility,” he adds. “Public power consistently beats investor-owned utilities in rates, in reliability, in service, in accessibility.”
Additional reporting by Stephanie Riegel