Riegel: LSU energy deal is raising more questions than answers 

    Are members of the LSU Board of Supervisors interested in getting the best deal possible on a new public-private energy contract for the flagship campus or scoring political points? That’s the essential question raised in Stephanie Riegel’s most recent column

    This latest piece is a more detailed follow-up to her October column in which Riegel detailed how the LSU board recently voted to ignore the advice of its own staff and consultants on an issue that is as important as it is complex. 

    The issue: How to go about finding a private partner to upgrade and operate the aging, inefficient energy system that heats and cools the Baton Rouge campus, a deal worth potentially $1 billion or more over 20-30 years.

    Though LSU staff and consultants have recommended bidding out a deal of such magnitude for several obvious reasons, the board voted instead to begin negotiating with two groups that submitted competing proposals to the university in early April, outside of a public procurement process. 

    One of those groups, Enwave, runs the HVAC system at LSU’s Health Sciences Center in New Orleans. The other is Louisiana Energy Partners (LAEP), a joint-venture owned, in part, by a portfolio company held by businessman Jim Bernhard’s Baton Rouge-based private equity firm, Reigel writes. LAEP is widely considered in industry circles to have the inside track on the LSU deal. 

    This is in part because of Democrat Jim Bernhard’s political connections in the state and his ties to Democratic Gov. John Bel Edwards. It’s also because LAEP’s scope of work under the Shaw Center contract can be expanded to include other state facilities, like LSU.

    Perception is reality, and the perception that the fix is in has already had a chilling effect on the market’s interest in this deal, Reigel writes in her newest opinion piece. But is that perception justified?

    To better understand it all, Reigel filed a public records request with LSU in early August for documents related to LAEP. In mid October, her equest was only partially answered and the documents provided leave many questions unanswered. But they do make clear that LSU staff spent much of 2020 thinking about, talking about and evaluating the LAEP proposal.

    Documents also make clear there was interest in political and governmental circles at the capitol in how the deal was being perceived at LSU, Reigel writes. 

    Read her full column, in which Riegel details what the documents revealed. Send comments to editor@businessreport.com.