With much of the attention surrounding LSU in recent weeks focused on safety protocols and the status of the football season, it went largely unnoticed when the Board of Supervisors met Aug. 14 and failed to discuss the future of the university’s energy system.
LSU officials had been expected to bring to the board for approval a plan to issue a request for qualifications for a partner to modernize and run the central utilities plant at the main Baton Rouge campus, according to published reports and sources familiar with the situation.
But the item was not placed on the board’s August meeting agenda because university officials are still trying to determine whether to open the procurement process to nearly a dozen national firms that have expressed preliminary interest in the deal or to begin directly negotiating with one of two entities that have existing ties to LSU and already submitted proposals to the university outside of an official procurement.
One of those entities is LA Energy Partners, which is owned in part by businessman Jim Bernhard’s Baton Rouge-based private equity firm Bernhard Capital Partners and has a contract with the state to run the energy system at the Shaw Center for the Arts—a deal that also includes modernizing systems at some 30 other state office buildings.
The other is Enwave Energy, which runs the district energy system for the LSU Health Sciences Center in New Orleans.
Both firms submitted proposals to LSU in April, even though LSU’s consultant on the project, KPMG, recommended to the board in March that it conduct a formal RFQ process aimed at attracting a wider group of national and international firms that had expressed preliminary interest in the deal during a “market sounding” meeting in Houston in January.
LSU officials decline to discuss the deliberations behind the scenes or explain why, over the recommendation of its consultant, it might not want to conduct an open procurement process that would attract multiple firms to compete for a decades-long deal worth tens of millions of dollars.
LSU Vice President for Strategic Communications Jim Sabourin will only say, “The university continues to work through this process and has not yet finalized the recommendation to be brought forward for consideration by the board at the September meeting.”
Sources familiar with the situation say the delay suggests some members of the Board of Supervisors could be exerting pressure on the administration to forego a lengthy and, potentially, costly procurement process in favor of negotiating directly with LAEP, whose existing contract with the state is structured so that it can be easily expanded to include other state entities like LSU.
LAEP is a joint venture owned by Bernhard Energy Solutions, one of Bernhard Capital’s portfolio companies, and Johnson Controls. It began partnering with the state on the Shaw Center deal in 2019.
Bernhard Capital did not return a call seeking comment.
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