The LSU Board of Supervisors will determine the fate next week of a lucrative energy contract that multiple board members say is likely to be split between Enwave Energy Corp. and Baton Rouge businessman Jim Bernhard's joint venture with Johnson Controls Inc.
If a deal is inked, it could close the books on a simmering dispute between the two sides over the huge contract, one that has already led to complaints with licensing boards and allegations of patronage.
The board will meet at 4:30 p.m. on Feb. 23 to discuss the new proposal, after LSU board members opted to negotiate directly with the two companies in lieu of a public bid process that would have allowed companies from near and far to compete over it. It's estimated that LSU will spend more than $800 million over decades on the contract, which aims to modernize aging campus energy systems to heat, cool and power the university.
Three board members confirmed to The Advocate on Friday that Enwave and Tiger Energy Partners — the joint venture between Bernhard LLC and Johnson Controls — were finalizing negotiations to share the contract. The board members spoke on the condition of anonymity because the deal has not yet been finalized.
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At the meeting next week, Enwave and Tiger Energy Partners are expected to present a memorandum of understanding to the board that explains how they would split up the work. The official contract for the work, however, would still take more time to complete.
Board members said they expect the Bernhard joint venture to focus on the construction of new energy facilities for campus, while they expect Enwave to help operate and maintain that infrastructure. That would fit with the pattern of how both companies have operated with LSU in the past.
Enwave operates the energy plant that powers LSU Health Sciences in New Orleans. And LSU contracted with Bernhard Mechanical in 2003, then run by Kenneth Bernhard, Jim Bernhard's brother, to build a co-generation plant on LSU's campus. The deal ended in a lawsuit and a Board of Ethics scandal.
Gov. John Bel Edwards appointed Jim Bernhard — a major supporter of the governor and donor to the state Democratic Party — to the LSU Board of Supervisors last summer. Bernhard declined the position shortly before the LSU board voted to start negotiating with his companies over the energy contract.
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Had he accepted the appointment, he would not have been able to do business with the university.
That was a decision that went against the advice of LSU's own consultants from KPMG, who suggested they follow a standard public bid process, and warned that they were less likely to get a good deal if they opted against it.
The Louisiana State Licensing Board for Contractors also determined last month that neither company had a contractor's license "in accordance with its legal entity name.”
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But board members said Friday that hasn't prevented the process from moving forward, and that they're pleased with how negotiations have gone. One described the joint plan as "taking all the best pieces and putting them together."