The parent company of Central Maine Power has filed a lawsuit claiming defamation and extortion against a former subcontractor who last week accused the power company of engaging in bid-rigging and racketeering.

Avangrid filed its lawsuit Friday in New Mexico against Security Limits Inc. and CEO Paulo Silva, a cybersecurity expert with the New York-based company.

On Nov. 29, Silva filed suit in New York alleging that Avangrid engaged in bid-rigging and buying unnecessary equipment knowing that the costs would be covered by higher electric rates for consumers in Maine and elsewhere. Avangrid categorically denied his allegations.

Avangrid’s counter lawsuit charges that Silva is a disgruntled former subcontractor who interjected himself into a merger review process in New Mexico after Avangrid refused to award new contracts to his company.

 

The latest lawsuit says that Security Limits Inc. provided technology services in 2018 and 2019. After the work was completed, there were disputes about payment with third-party companies. Unhappy about the outcome of those disputes, Silva’s company began to harass Avangrid, the lawsuit charges.

Silva sought contracts with Avangrid, and after not getting more business he threatened to make negative, public statements against the company, Avangrid says.

“When Avangrid refused their extortion attempt, (Silva) made false, defamatory and malicious public statements designed to harm Avangrid” before the New Mexico Public Regulation Commission involving a proposed merger between Avangrid and a large private utility company in New Mexico, the lawsuit reads.

On Sunday, Maine Public Advocate Andrew Landry said his office will be looking into the lawsuits with an eye toward protecting the state’s electricity ratepayers.

CMP’s parent company filing a counter lawsuit “is not surprising,” Landry said. “I don’t have any sense of the merits of either case. Obviously the complaint against Avangrid is concerning. We’ll be watching that.”

If there’s anything to the subcontractor’s complaint of raking up costs to be covered by electricity consumers, that “would be very concerning,” Landry said. “But I have to wait for it to play out to see if there’s any traction. The fact that they’re (Silva’s lawyers) willing to risk their reputation by bringing a lawsuit suggests there’s smoke there.”

When asked what he would say to CMP customers who may find the back-and-forth lawsuits disturbing, Landry said the PUC will “monitor this carefully to see if there’s any merit whatsoever. I think we’ll find out pretty quickly.”

Messages left with the spokesperson for Gov. Janet Mills were not returned Sunday evening.  Susan Faloon, spokesperson for the Maine Public Utilities Commission, said the PUC would not be issuing a statement Sunday evening regarding the lawsuits.

According to Silva’s Nov. 29 lawsuit, he is seeking damages of more than $600 million, including some punitive damages, which are triple the actual damages.

Maine is mentioned in that legal complaint, which alleges that in 2018 and 2019 Avangrid bought equipment worth tens of millions of dollars from a competitor at high prices with no bidding competition, and that as of January the equipment remained unused in warehouses in Maine and New York.  The complaint did not provide more information on the warehouse and CMP spokesperson Catharine Harnett said in an email Sunday evening that Silva’s allegations “have no merit.”

Avangrid responded last week in a statement saying “the company will vigorously defend itself.” Avangrid charged that Silva was interfering with its proposed merger in New Mexico to win other contracts “based on false statements.”

In its counter lawsuit, Avangrid’s attorneys ask the court to award the company “nominal and compensatory damages in an amount to be proven at trial.” Avangrid also asks for special and punitive damages and any other relief that the court “deems just and proper.”

“We look forward to presenting our case to a jury in New Mexico and to have them determine the amount of damages caused by Security Limits and Paulo Silva’s unlawful actions,” Avangrid’s spokesperson Zsoka McDonald said in an email Sunday evening.

Avangrid’s lawsuit was filed by Marrs Griebel Law, an Albuquerque-based law firm, and by Steptoe & Johnson LLP based in Los Angeles.

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