A Pennsylvania cybersecurity company sued Avangrid of Connecticut and Iberdrola of Spain this week, contending they engaged in unethical activities that hurt the company.

Security Limits Inc. and its owner, Paulo Silva, filed the civil suit in federal court in New York against the two companies, which are seeking to merge with Public Service Company of New Mexico.

That merger proposal has run into a series of challenges, including that a majority of Public Regulation Commission members said this week they probably would vote against the plan.

Security Limits contends Avangrid, Iberdrola and numerous vendors and partners rigged bids, unnecessarily jacked up prices of equipment for a balance-sheet advantage, stole Silva’s ideas and broke nondisclosure agreements.

When asked why it wasn’t a criminal matter, one of Security Limits’ attorneys, Peter Adelman of New York, said Friday afternoon, “It might well become one.”

Avangrid’s Albuquerque-based spokeswoman, Joanie Griffin, said Friday a countersuit will be filed soon. Griffin said Avangrid will accuse Silva of defamation, among other things.

Silva, she said through a statement, is a “disgruntled subcontractor” who is “bitter he didn’t win competitive procurements.”

“The allegations and claims have no merit, and the Company [Avangrid] 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 statement said.

The Security Limits suit makes numerous allegations. Named in it are Avangrid, Iberdrola, some executives at both of those companies, and numerous cybersecurity and computer technology vendors and companies.

The suit alleges Avangrid bought equipment at inflated prices and even equipment it didn’t need and stored it in warehouses in order to pad its capital expenses. By doing so, the suit claims, Avangrid could meet capital expenditure targets, gain depreciation benefits and recover money through rate increases to customers.

Security Limits says it was denied contracts that were steered to companies “willing to participate in a pay-to-play scheme.”

Silva took his complaints Wednesday to the New Mexico Public Regulation Commission. He said in the public comment portion of the meeting that he “discovered that Avangrid’s conduct artificially raised rates paid by consumers in New York and illegally reached Avangrid’s favored bidders.”

Silva also advised the commission to reject the merger proposal as “not in the public interest of Americans.”

Griffin’s statement said of his Zoom appearance before the commission, “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.”

Iberdrola is Avangrid’s parent company. The PNM-Avangrid-Iberdrola merger process in New Mexico has been contentious, with opponents citing, among other matters, service woes at Avangrid subsidiaries and a criminal investigation against Iberdrola’s chief executive officer.

Security Limits’ suit refers to the latter situation, saying that “corporate misconduct is hardly unfamiliar” to Iberdrola.

The lawsuit seeks several hundred million dollars in damages.

(6) comments

Jerry Appel

While this certainly jibes with my anti-utility bias, I have to wonder if Silva has made similar complaints to the other states in which Avangrid operates. Have all the northeastern states that Avangrid serves looked into these claims? Is the degradation of bureaucratic oversight, a result of Republican state and federal administrations, allowed businesses to take advantage of the situation?

John Cook

People who take this article seriously should stop it. I, myself, have very serious reservations about this merger. I probably oppose it. That doesn't make me take the allegations of a civil suit filed by a disgruntled sub-contractor seriously. This article is nothing but the allegations in a civil lawsuit. Until that case is tried by a jury that hears the facts, it means nothing.

Richard Reinders

John, normally I am with you on the idea that you have to wait but they also were being investigated in Spain for some other ethical issue with bribes. Lightning only has to strike twice in the same place for me to be a believer. Also the examiners conclusion that this was not in the public interest and other issues in Connecticut seals the deal for me.

Mike Johnson

Drip, drip, drip, and this surprises.....no one.

Richard Reinders

Where there is smoke there’s fire, now it is so apparent that this merger is not in the public’s interest, that anyone that votes to approve this merger or even encourages it is in the pocket of Avangrid. It would be hard to come to any other conclusion, this one walks like a duck, quacks like a duck and looks like a duck.

Andrew Lucero

Very true Richard. But I can’t help but wonder how many politicians they have already bought and paid for and how many more millions of dollars they will waste trying to convince us that they are a platypus.

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