On Jan. 14, 2020, less than 12 hours after the LSU Tigers had won the College Football Playoff National Championship, a handful of LSU staffers and KPMG consultants gathered at the consulting firm’s swank offices in downtown Houston to host a market-sounding meeting to gauge potential interest in a proposed energy services deal for the university.
The deal, as envisioned, would be the largest public-private partnership in LSU history and would essentially turn over the aging system that powers the main Baton Rouge campus to a private company that would invest hundreds of millions to modernize the inefficient equipment and then maintain and operate it, at a profit, for decades to come.
The meeting attracted nearly a dozen international players with experience in such deals, including Siemens, ENGIE North America and Veolia, as well as Baton Rouge-based Louisiana Energy Partners, a joint venture with ties to businessman and Democratic contributor Jim Bernhard.
But over the course of the next 13 months, the LSU board would decide to go against best practices by not bidding out the project and go against its paid consultants’ recommendations by creating a split contract between Bernhard’s LEP, which provides chilled water to some 30 state office buildings downtown, and Enwave, which provides energy services to the LSU Health Sciences Center in New Orleans.
This isn’t the way it’s supposed to be done, Business Report details in a new magazine feature about the contract. Dozens of other institutions have engaged in similar deals in recent years and modeled best practices. Comparing the process other institutions followed with that of LSU shows just how badly the LSU board has messed this up.
What’s more, the process LSU chose not only hurts the school’s reputation but also that of Louisiana, which can’t seem to shake its image as a place where connections matter more than competence.
Reporting for this story includes interviews with more than a half-dozen local and national consultants, engineers and company executives familiar with the P3 process, many of whom spoke on the condition of anonymity to share candid details.
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