Quanta seeks restraining order to prevent LIPA vote on electric grid manager contract

Quanta Services has asked a state court to issue a temporary restraining order barring LIPA from granting PSEG Long Island a five-year extension to operate the region’s electric grid when the power authority’s board of trustees meets on Thursday, according to court documents.

The request for a temporary restraining order, filed Monday night in state Supreme Court in Nassau County, is the latest front in the legal battle over who will manage electricity on Long Island after PSEG’s contract expires at the end of the year. Houston-based Quanta filed a lawsuit last week, also in state Supreme Court, that challenged LIPA’s decision to reject its bid in April and asked the court to bar the Long Island Power Authority from extending its contract with PSEG until the litigation is resolved.

The matter became more pressing after the lawsuit was filed, Quanta said in court papers, after LIPA posted a preliminary agenda for its Thursday board of trustees meeting that designated 20 minutes to consider "Approval of an Operations Agreement with PSEG Long Island."

The lawsuit also asked the court to declare the LIPA board’s vote in May to cancel its request for proposals to manage the grid that LIPA issued in May 2024. Quanta is also asking the court for fast access to LIPA documents it sought in advance of the lawsuit but failed to receive.

"In essence, this case is about power, but not just the provision of energy services and grid operation vital for Long Island residents who would have benefited from Quanta’s demonstrated expertise and experience," the suit said.

PSEG has operated Long Island’s electric grid for LIPA since 2014 under a contract that expires at the end of the year. LIPA pays PSEG about $80 million a year.

Even if LIPA announces an agreement with PSEG on Thursday, the contract must still undergo reviews by the state attorney general and comptroller before final approval.

Attorney Evan Glassman, of Manhattan, who is representing Quanta, did not return a request for comment. Representatives of LIPA and PSEG declined to discuss the lawsuit, saying they do not comment on ongoing litigation.

In a letter filed with the court Tuesday afternoon, an attorney for LIPA asked acting Supreme Court Justice Philippe Solages to reject Quanta's request for a temporary restraining order, saying the company knew its bid had been turned down in April but waited until September to file its lawsuit. 

"Given that the petition was filed over four months after the relevant determination, the statute of limitations has run and the untimely petition must be dismissed," Michael Versichelli wrote in the letter. 

LIPA's 1.2 million customers could be without a service provider early next year if LIPA is unable to extend its agreement with PSEG, Versichelli added. 

Quanta said in court papers that it entered bidding for a 10-year contract with LIPA with the "reasonable expectation that there would be a fair playing field." But the process was "anything but fair," the papers said, calling it "deeply flawed."

The lawsuit comes as LIPA is under investigation by the New York State inspector general, who is trying to determine if any undue influence was brought to bear during the process to determine the best way to manage Long Island’s electric grid. It also comes amid an internal ethics probe, led by a law firm hired by LIPA, that was sparked by a complaint filed by two people connected to the procurement process.

 As Newsday first reported in April, a special LIPA committee, including former Public Service Commission chairman and then-acting LIPA chief John Rhodes, strongly recommended Quanta to take over the contract to manage the grid. Quanta, the committee concluded, was in the best position to "reduce risk and deliver the strongest performance on storm preparation and restoration, reliability and minimized electric rates." PSEG, the committee said, "did not satisfy certain minimal requirements" to extend its contract.

But six members of LIPA’s board, citing news accounts of problems with Quanta’s joint venture managing Puerto Rico’s troubled electric grid, voted to reject Quanta.

The board resolution also explained that the procurement process was canceled because a member of the selection committee, later revealed to be Rhodes, owned stock in Quanta. Quanta’s court papers said Rhodes initially did not know he owned the stock and sold it well before he recommended Quanta. But the board had rejected Quanta before news of the stock sale becoming public.