State regulators shut down further scrutiny of LUS/LUS Fiber transactions

Photo by Robin May
Former LUS Director Terry Huval
This is a developing story and will be updated.

The gist: The staff of the Louisiana Public Service Commission today closed the door on taking any action against LUS and LUS Fiber over self-reported potential violations of the Louisiana Fair Competition Act or the commission’s cost-allocation and affiliate transaction rules.

Before the staff for review was a December 2019 self-report from the Robideaux administration. 

The decision likely ends a controversy that’s dragged on for more than two years. Before leaving office, Mayor-President Joel Robideaux reported a slew of potential violations of the state law, citing millions of dollars in payments to Fiber for a power outage monitoring system and alleging the payments were intended to prop up Fiber. Since that time, his successor, Josh Guillory, has upped the rhetoric around the questionable transactions, seeking to have former LUS Director Terry Huval and several of his employees prosecuted in what he alleged was a “scheme” to funnel millions in illegal subsidies to LUS Fiber, prompting City Councilwoman Liz Hebert to characterize the administration’s actions as a “witch hunt” when the administration tried to pull the FBI into the fray after District Attorney Keith Stutes declined to pursue charges.  

At today’s meeting, its last of the year, the PSC, which has limited oversight of LUS Fiber, shut down any further scrutiny of Robideaux’s pending self-report from December 2019.

“Staff issued data requests to LUS and received responses, including a forensic examination report performed by CRI,” PSC attorney Lauren Evans told the commissioners. “After an extensive review of the responses to the data request, including the forensic examination report, staff does not recommend further action on the issues raised by LUS in the Dec. 27, 2019, filing.” 

Evans went on to say that the staff’s only recommendation is for the commissioners to direct LUS to respond to the staff audit report issued in mid-2019 “and after such filing that this docket be closed.” That was a reference to the June 2019 audit report from the PSC concerning the initial 2018 discovery of payments from LUS to Fiber for services to sewer lift stations and some electric system components that were never connected. The staff audit report affirmed LUS’s decision to reimburse the communications system $1.75 million for services that were never rendered but took no punitive action. 

PSC officials have consistently told The Current that the commission had yet to hear back from LUS on that audit report, now more than 1.5 years old. 

Wednesday’s staff update appears to be the end of the road for this drawn out and costly debacle, which has all the markings of a political vendetta against Terry Huval. “Based on its review of Commission rules and the submitted documentation, Staff found that there is no substantial benefit to conducting further cost studies and examinations into the allegations,” PSC spokesman Colby Cook told The Current in an email after the meeting.

The update required no action by the commissioners, who voiced no objections and seemed anxious to put the matter behind them. 

“I think it’s time to close the door on this issue and move on to some higher ground,” PSC Chairman Mike Francis said in directing the staff to send the formal request to LUS for its belated response. “I think they’ll be glad to close this and move on.”