MARK POPE: Surprise from Lafayette City Hall [OPINION]
The main character from the television sitcom, “Gomer Pyle USMC,” used to regularly say “surprise, surprise” about some sweet, innocent blunder, which evoked laughter from the audience. The most recent surprise from Lafayette City-Parish Hall is not a sweet and innocent blunder, nor is it evoking laughter. Mayor-President Joel Robideaux is working with Bernhard Capital Partners (BCP) toward a possible deal whereby the firm would take over – not buy or purchase – the operation and maintenance of the electric operations of the publicly-owned Lafayette Utilities System. LUS’ electric division is a stellar operation – it operates totally in the black and provides $23 million “in lieu of taxes” annually to the Lafayette Consolidated Government (LCG) general fund. The LUS electric division provides reasonably-priced electricity to businesses and residents in the city of Lafayette. LUS also operates outstanding water and wastewater services throughout the city.
Jim Bernhard, who founded The Shaw Group in Baton Rouge 30 years ago, resigned as The Shaw Group’s CEO in 2013 after Shaw was sold to Chicago Bridge and Iron Company. He received tens of millions of dollars in severance pay and stock equity upon his departure. In 2016, Bernhard founded BCP, a private equity firm which invests in companies that operate in the energy service industry. Bernhard and his partners quickly raised $750 million from investors worldwide for the nascent BCP operation. Great success story. Lafayette, however, does not need the “services” of BCP, thank you very much.
Retired LUS Director Terry Huval seems to agree – he retired last Wednesday, three months before his announced retirement date of Oct. 31. Could it be early retirement in protest? The Daily Advertiser posted a headline last Friday about the LUS situation: “Huval suggests ‘money motive’ in deal.” Huval says he asked BCP representatives multiple times for examples of private companies who have successfully operated and managed municipal electric power systems. “I never got a square answer,” Huval said. Negotiations have been ongoing for 16 months, and although Huval has not been intimately involved he is nonetheless uncomfortable with the proposal. Robideaux is still analyzing the viability of a deal with BCP, and his claim is that “LUS facilities are old and need upgrading,” and that BCP would cover those costs. That’s a half-truth. One old LUS natural gas power station on Walker Rd. has been idle since 2013 and is in need of retrofitting and upgrading, costing an estimated $100-$200 million.
Lafayette also has four modern natural gas power plants, which were all built in the 2000s. LCG would receive hundreds of millions of dollars if a deal is struck with BCP, but it is not worth the gamble and uncertainty, not to mention the unintended consequences of this deal. Additionally, a power plant inspector told me recently that the generating capacity of the obsolete Walker Rd. power plant is redundant and not currently necessary.
It’s revealing to “follow the money” and the personal connections tied in with the possible LUS deal. Bernhard and his affiliate companies have donated at least $7,500 to Robideaux’s political war chest since 2015, according to the Louisiana Ethics Administration. An affiliate of BCP is a client of lobbyist Tyron Picard who owns The Picard Group in Lafayette. Enter former state senator Mike Michot, a life-long friend to Robicheaux, as well as a supporter of and advisor to Robideaux when the two men were colleagues in the state legislature. Michot works at The Picard Group. Good ole’ boy network – lots of back-scratching – or mere coincidence?
Terry Huval was an outstanding public servant and leader. He demanded excellence from his LUS employees. He strived to make LUS among the best publicly owned utility companies in the country with reliable services and reasonable rates. He succeeded. Huval wonders if privatizing the LUS electric division will compromise customer service, reliability, and low rates. We all wonder.
Mary Beth Carrier is the granddaughter of the late Charles “CC” Hargis, who served as LUS’ first manager/director from 1955 to 1975, following Lafayette’s “trustee” form of government (i.e., trustees of public works, utilities, etc.). Ms. Carrier recalls her grandfather’s passion for excellence in overseeing a citizen-owned utility company which got its start in 1897. Hargis mentored and cared for his employees, who he groomed to serve Lafayette with pride and a sense of ownership. One of Lafayette’s newer natural gas power plants is named the “Hargis-Hebert Power Plant,” in honor of Mr. Hargis and his superintendent of electrical production, Roy Hebert. Terry Huval and Charlie Hargis were friends. Hargis mentored Huval until Mr. Hargis’ death in 2006. The spirit and accomplishments of Misters Hargis and Huval should be honored. Drop the deal, please Mr. Mayor, and don’t tamper with success.