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Despite PSC decision, Guillory administration seeks reimbursement from LUS Fiber

Image courtesy The Acadiana Advocate
Mayor-President Josh Guillory's administration continues to push for a reimbursement from Fiber to LUS, despite a PSC decision to shut down its inquiry into questionable payments between the two affiliated entities, according to multiple sources.

The gist: Months after the Louisiana Public Service Commission decided to “close the door” on allegations of overpayments from LUS to LUS Fiber, the Guillory administration insists Fiber owes the utility system a refund.

The administration is now asking Fiber to reimburse $1.2 million, sources with knowledge of the request tell The Current. At issue are payments for a power outage monitoring system, which were at the heart of a long inquiry into transactions between LUS Fiber and LUS. At one time, the estimate for the alleged overcharges, including POMS and other services, ranged from $8 million to $12 million

Get caught up quickly: In December PSC staff found no reason to take action after an internal inquiry into alleged improper payments begun by the Robideaux administration in 2019 and escalated by the current administration. At the commission’s last meeting of 2020, PSC attorney Lauren Evans made that decision clear to commissioners. Commissioners accepted the recommendation. The only outstanding business the PSC had with LUS, Evans said, was the utility system’s belated response to a June 2019 audit memo concluding that Fiber owed LUS for services to some sewer lift stations that were charged but never used. Back in 2018, then-LUS/LUS Fiber Director Terry Huval self-reported the unused services to the PSC, at the time making the decision to refund $1.75 million to LUS. The PSC, which has limited oversight of LUS and Fiber, affirmed the reimbursement in its June 2019 memo.

After the PSC’s December announcement that no further action would be taken on the newer questions about pricing — which had prompted allegations of criminal misconduct against LUS and Fiber employees along with an investigation by District Attorney Keith Stutes, a forensic audit of LUS and Fiber, and even an attempt to pull the FBI into the fray — it seemed the controversy that had cost at least $213,000 in legal, audit and PSC proceedings would come to an end. It was a sentiment commissioners themselves appeared to share. 

“I think it’s time to close the door on this issue and move on to some higher ground,” PSC Chairman Mike Francis said during the meeting. “I think they’ll be glad to close this and move on.” 

That didn’t happen. The administration, sources say, continues to contend that the transactions violated the PSC’s rules for ensuring compliance with the Louisiana Local Government Fair Competition Act, despite the regulatory agency’s decision to take no action on the matter.

It remains unclear whether the administration would need the City Council’s approval for any reimbursement. The Current has yet to receive a response to its April 1 public records request seeking internal LCG communication about the reimbursement recommendation. 

City-Parish Attorney Greg Logan and Assistant City-Parish Attorney Lawrence Marino, whose firm has headed much of the LUS investigation, did not respond to an email seeking comment for this story. 

PSC puts it in writing. At the request of City Councilwoman Liz Hebert, who has characterized the administration’s investigation as a “witch hunt,” the PSC’s Evans on March 22 issued a letter affirming its decision to shut down any further inquiry into the allegations of cross-subsidization. In the letter, which was obtained by The Current, Evans wrote that on Feb. 8 the PSC received from LUS the memo response it had been waiting for since 2019, noting that the commission had accepted the staff’s recommendation to close the docket. Evans wrote that an order memorializing the commission’s decision was issued on March 19, and she included the order. “As of the date of the order, Docket No. U-34830 is considered closed, and as such, there are no pending audit dockets involving LUS at the Commission,” Evans concluded in boldface type.

City Councilwoman Nanette Cook tells The Current she and Hebert had been scheduled to speak with the administration about the matter last week. “We requested the meeting, and something came up and we couldn’t make it,” Cook says. “We asked to postpone the meeting, and the administration agreed.” 

“We’ve had enough entities telling us no criminal activity or illegal actions have taken place,” Hebert says. “I’m satisfied with the letter I received from the PSC and the decision from the DA.” Stutes was unsparing in his criticism of LCG, finding no basis for the criminal complaint filed against LUS employees and deferring the matter to the PSC. “It’s time for us to hire a permanent LUS director and move forward,” Hebert says.

A new date for the meeting had not been set by Monday. 

City Councilman Glenn Lazard echoes Hebert’s sentiments, saying he won’t entertain any suggestions of overpayments or underpayments between LUS and Fiber. “In light of the PSC’s ruling, I don’t feel like any future action is required,” Lazard says.

This story has been corrected to reflect the total legal, audit and PSC costs since the investigation into payments between LUS and LUS Fiber was launched in 2018. That total is $213,000 as of October 2020.