Mayor-President Joel Robideaux, in a July 8 letter to the Louisiana Public Service Commission, alleges Lafayette Utilities System made unnecessary payments to LUS Fiber for power outage monitoring, which may have violated PSC rules and the Local Government Fair Competition Act.
The allegation comes in the wake of a June 4 PSC audit that showed LUS wastewater and electric divisions paid LUS fiber for services never used over six years.
Former long-time LUS Director Terry Huval countered Robideaux's allegations in an interview Tuesday with The Acadiana Advocate. Huval retired in July 2018 after Robideaux advised he was separating LUS and the fiber program and cutting Huval's salary in half since he no longer would oversee the fiber operations.
Robideaux did not respond to requests for comment on this story.
In the PSC letter, Robideaux said as staff reviewed the PSC audit and prepared the 2019-20 budgets, he learned LUS paid LUS fiber about $1 million a year for a power outage monitoring system of electric customers who also subscribed to fiber.
The monitoring service, restricted to LUS fiber customers, notified LUS electric workers more quickly of power outages.
"Questions remain as to whether POMS was utilized as anything other than a second or third tier redundant data source," Robideaux wrote, and whether the system "was of significant value to LUS" in identifying outages since most electric customers were not fiber subscribers.
The payments began in November 2010, Robideaux wrote,starting at just over $20,000 a month the first year, then growing to more than $84,000 a month. That's about $1 million a year.
Huval explained the power outage monitoring system benefited all LUS electric customers tied to lines serving fiber customers. If one person in a neighborhood was a fiber customer and lost power, the notification to LUS electric applied to everyone on the same line, he said.
Reliability of service is important, especially for businesses, who lose money without electricity, Huval said. The faster LUS is notified of an outage, the faster workers can restore power, saving businesses money, he said.
The program worked, Huval said, substantially reducing the cost of power outages. Based on a U.S. Department of Energy formula, outages in the city of Lafayette cost $28 million in 2011, $14 million in 2012, $9 million in 2013, $16 million in 2014, $16 million in 2015, $14 million in 2016 and $10 million in 2017.
Huval said before he retired in 2018, he was phasing out the program because LUS installed smart meters for most customers, with power outage monitoring capabilities.
Robideaux's letter to the PSC implied Huval, who also was the fiber/communications system director, acted alone in implementing the power outage monitoring system.
He also raised questions about multiple methods considered for charging LUS for the fiber service and for increasing the amount charged LUS, again putting the responsibility solely on Huval, alleging reports and documents could not be located to substantiate Huval's actions.
Lafayette Consolidated Government accounting staff notified Huval prior to a July 2011 POMS charge increase that he was required to use a full-cost accounting methodology to calculate the charge, Robideaux wrote.
"No analysis of the cost to the Communications Division to provide POMS can be found in LUS or Communications Division files," he added.
The POMS charge , Robideaux wrote, was based on the estimated benefit to LUS customers, not on cost to the fiber division, which was insignificant. That, he added, appears to be a violation of the PSC Rules and Manual and possibly the Fair Competition Act.
Huval said the City-Parish Council discussed the POMS program during budget hearings and at multiple public meetings. The matter was reviewed by local auditors and city-parish attorneys, he said, and the PSC did not question the program.
Staff, Huval said, looked at how to manage the program under restraints of the Fair Competition Act.
"This is an unusual service," he said. "No other company can provide that service. The Fair Competition Act says we can’t give ourselves an advantage and can’t charge more than market."
The bottom line, Huval said is, "This is an initiative that worked. It improved reliability to customers. I believe it was a fair price."
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