Newly Released Records Show LP&L Director Not the Only One With Explaining to Do

Published 06/08 2014 01:40PM

Updated 06/09 2014 09:49AM

By James Clark

LUBBOCK, TX -- The City of Lubbock released public records last week that show Lubbock Power & Light staff did not follow internal procedures when dealing with a company called E3 consulting. E3 is tied to Alpine Energy Group which in turn is tied to a series of allegations leading the LP&L board to place Director Gary Zheng on paid leave.

The board is negotiating an out-of-court settlement for Zheng’s permanent removal.

The newest records released by the city show a second LP&L employee, Electric Production Superintendent James Gilmore, was also involved with E3.

In March of 2013 Gilmore advocated for E3 to do $248,000 worth of analysis related to new electric generation. LP&L’s Purchasing Director, Felix Orta, challenged Gilmore when the right paperwork had not been submitted and approved by the LP&L board.

According to the newest documents released by the city, Gilmore reduced the proposed analysis to $49,550 so that it would not need board approval. The E3 issue did not come up again until after there were allegations of bid rigging in late 2013, and the bids for a power supply contract were rejected in early 2014.

In late February of 2014 E3 wanted money for the original $248,000 proposal that never went to the board, but apparently the work was done anyway.

Orta wrote, “I immediately briefed my supervisor and legal that Mr. Gilmore had been sitting on invoices and issued a job without board approval. Mr. [Todd] Kimbrough [LP&L’s General Counsel] made the comment that someone should be reprimanded over this.”

Orta then documented a meeting between himself, Gilmore and Zheng, and Kimbrough in which Gilmore said he had authorization from the now-former Assistant Director of LP&L to go forward with the work. (Kimbrough claims he missed part of that meeting.)

Orta quoted Gilmore saying, “He [the Assistant Director] was told by E3 that they would not bill us as long as they received the generating plant.”

In simple terms Orta is saying that E3 and AEG planned all along they would be the winning bidder for a major power supply contract. It’s the same contract for which the bids were rejected in 2014 amid allegations of bid rigging.

In May, reported on the E3 allegations based on information from Mayor Glen Robertson. That did not go over well with Director Gary Zheng. Zheng wanted to know how was told by the Mayor that E3 would just “roll it into the bid”

Orta wrote, “I once again reminded him that Mr. Gilmore stated that E3 would not bill us as long as they received the generating plant in the February 25, 2014 meeting.”

Only days later the board placed Zheng on leave. He remains on the payroll but has no responsibility for day-to-day operations.

The substance of Orta’s allegations was presented to the FBI in May by LP&L’s Chief Financial Officer Andy Burcham. The FBI’s policy is to not confirm or deny the existence of an ongoing investigation.

A spokesman for LP&L said Gilmore did not want to comment. The following statement was issued on behalf of LP&L:

“LP&L and the Electric Utility Board gathered all pertinent facts and worked hard to learn as much as possible on this matter in order to ensure appropriate actions are taken.

Proper procedures and professionalism will always be at the forefront of every decision. This is evidenced by the Electric Utility Board agendas over that past few months that show the Board’s diligent oversight of this item.

LP&L strives to be among the best utilities in Texas by continually providing reliable and affordable electricity to our citizen owners. The highest level of ethics and integrity is paramount in order to operate in a manner fitting of those we serve.”

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