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Avangrid, parent company face $110M lawsuit for alleged bid rigging, racketeering

The lawsuit accuses Avangrid and Iberdrola executives of overspending on unused equipment to inflate costs, increasing rates and profits.

MAINE, USA — Central Maine Power's parent company Avangrid is facing a $110 million lawsuit for bid-rigging and racketeering. 

Avangrid and its parent company, Spanish global energy company Iberdrola, are being sued by cybersecurity company Security Limits Inc. 

The 72-page federal court complaint accuses Iberdrola executives of spending millions of dollars on data equipment that has allegedly sat untouched in Maine and New York warehouses. 

Avangrid and Iberdrola allegedly benefitted from this scheme because the companies could report these expenditures to the public utility commissions as a legitimate reason to request rate hikes in the states, like Maine, where they deliver power.

Paulo Silva, cybersecurity expert and CEO of Security Limits Inc., filed the complaint in New York this week. Silva said he worked at Avangrid as a subcontractor for two years, allegedly complaining in 2018 about overspending on equipment. He claims Avangrid executives then began manipulating the bidding process and steering lucrative contracts toward five companies tied to Iberdrola.

“The [scheme], and its inherent waste, deprived SLI of valuable contracts it would have otherwise been awarded in an unrigged bidding process, wasted millions of rate-payers’ dollars, and wrongly enriched the [scheme’s] participants,” lawyers concluded in the complaint.

An Avangrid spokesperson issued the following statement to NEWS CENTER Maine, attempting to debunk the accusations:

"Mr. Silva is a disgruntled subcontractor, bitter he didn’t win competitive procurements and that his relationship with the contractor soured. Contrary to his statements, Mr. Silva and Security Limits did not have a contract with Avangrid or its subsidiaries, he was hired as a subcontractor by an independent contractor.  

We are aware of the action by Security Limits, but have not been served. The allegations and claims have no merit, and the Company will vigorously defend itself. In fact, the Company has previously reviewed unsubstantiated allegations made by Security Limits and sent a cease and desist letter to it. The Company plans to pursue all legal remedies against Security Limits.

We have concerns about Mr. Silva’s use of the New Mexico Public Regulation Commission process as a way to try to gain leverage over Avangrid to obtain future contracts that have nothing to do with New Mexico or PNM.  It is not only inappropriate but also unlawful to interfere with business activities based upon false statements."

A spokesperson for Maine Governor Janet Mills said Mills was not aware of the allegations. The Governor issued a statement about the lawsuit on Saturday:

“These allegations are alarming and deeply troubling. Maine provides to its electric utilities a monopoly and, in return, they owe to Maine people reliable service at just and reasonable rates - nothing less. Any act of wrongdoing or any misconduct that harms Maine people deserves swift action, accountability, and consequences. I call on the Maine Public Utilities Commission to closely review the Federal complaint, to examine Avangrid’s history of equipment purchases in Maine, and to ensure that no Maine CMP ratepayer has been or will be harmed by these activities if proven to be true.”

Read the full lawsuit below.

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