Connecticut-based energy company Avangrid and New York-based Security Limits Inc. have each filed separate lawsuits against one another, with Avangrid claiming extortion by Security Limits, and the latter accusing Avangrid of bid rigging.
Avangrid is seeking state Public Regulation Commission approval to acquire PNM Resources and its two utility subsidiaries, Public Service Company of New Mexico and Texas New Mexico Power.
Security Limits owner and CEO Paulo Silva has twice provided disparaging testimony against Avangrid during open public comments at the PRC as part of the merger case.
Security Limits also filed a lawsuit on Nov. 29 in federal court in New York accusing Avangrid, its parent company Iberdrola and some of their suppliers of rigging bids and steering contracts away from Security Limits to favor other companies in a “pay-to-play scheme.”
Meanwhile, Avangrid filed a lawsuit on Dec. 4 in First Judicial District Court in Santa Fe accusing Security Limits of “defamation” and “tortious interference” in the PRC merger proceedings.
Security Limits, a cybersecurity firm, previously provided information technology services to an Avangrid subsidiary in New York under subcontracts with third-party providers. But Silva’s company has since failed to win new contracts in competitive bidding processes.
In its lawsuit, Avangrid says Silva threatened in emails to intervene in the merger case to pressure Avangrid into awarding contracts to his company. Avangrid says it rejected those pressure and “extortion” tactics, and Silva then made good on his threats through public statements at the PRC on Aug. 9 and Dec. 1.
Among other things, Silva accused Avangrid and Iberdrola, S.A., of corrupt procurement practices and coercion, even implying that Avangrid has hacked the computers of people involved in the merger case.
“Anyone attending these proceedings that has spoken against this merger, I strongly urge you as a cybersecurity professional to rebuild all of your computers (and) change all your passwords,” Silva told PRC participants in August.
Avangrid’s lawsuit – which seeks damages for defamation and slander – says Security Limits is a “disgruntled former subcontractor” that has made “false, defamatory and malicious public statements” to extort Avangrid. It says those accusations have damaged its reputation and possibly made it more difficult to win PRC approval for the merger.
Security Limits’s lawsuit seeks $110 million in damages and contains a wide range of allegations, such as over-purchasing equipment at inflated prices to increase its capital expenses to then recover those investments at a profit from utility customers. Much of the equipment was never used, but only stored in a warehouse, according to the lawsuit.
Silva alleges that after he complained about the overspending, Avangrid began rigging its bidding process to steer contracts to other firms.