We filed a Motion to Compel and requested sanctions against BCP for failure to questions about violations and penalties

Yesterday, in response to Bernhard Capital Partner's previously reported refusal to respond to interrogatories related to violations and penalties levied against BCP owned companies, we filed a Motion to Compel and requested sanctions for failure to comply with the transparency required of any party that wants to operate a publicly regulated utility in New Mexico. 

Our Motion argues that a company's operational history is the best indicator of its corporate culture and future actions that could impact New Mexico gas customers, especially in the case of BCP which lacks any significant experience in operating a utility, and asks that BCP be required to respond to our questions with the full and comprehensive disclosure of facts as required by law.

National agencies and state regulators from NY to Massachusetts to Louisiana have penalized BCP owned companies for failure to properly maintain and operate facilities, cheating workers out of pay and failing to abide the safety standards meant to protect human health and the environment. The law and precedent clearly require that any company seeking to acquire and operate a utility in New Mexico must provide fulsome and comprehensive responses to discovery so that the public, the parties and the PRC can accurately determine whether they are fit to own an essential service.

Our interrogatories asked for records related to violations and penalties from federal and state regulatory agencies that were levied against BCP owned companies, and specifically about labor, safety and environmental penalties from the EPA, OSHA and state regulators uncovered via independent research. These included:  

1. A 2022 Settlement with the Louisiana Department of Environmental Quality by National Water Infrastructure LLC, purchased by BCP in 2020. The record reads “During an inspection conducted on or about March 15, 2022, it was revealed that the Respondent failed to properly operate and maintain the treatment facility. Specifically, a build-up of solids were observed in the chlorine contact chamber that were noted to be very close to the surface of the wastewater.”  “[A] large amount of sludge buildup was observed in the receiving stream.  “Bloodworms were also noted throughout the sludge within the receiving stream, which is indicative of stagnant water containing organic matter commonly associated with sanitary waste.”  (Emphasis supplied.) Settlement amount was $10,500.00.

   
   

2. A Consent Agreement and Final Order by the EPA regarding Epic Piping LLC, a BCP owned company, in 2022. Allegations involved the mishandling of hazardous waste, particularly asbestos, and the effect on workers; non-compliance with notification and identification; improper training of personnel; improper processing, packaging, or transporting; improper storage; failure to minimize exposure which could threaten human health or the environment. It reads “[F]ailure by Respondent to maintain or operate its facility in a manner minimizing the possibility of a fire, explosion or any unplanned sudden or non-sudden release of hazardous waste or hazardous waste constituents to air, soil, or surface water which could threaten human health or the environment.”  “[F]ailure to properly manage containers holding hazardous waste, including failing to transfer waste from one leaking container to a container in good condition or otherwise properly manage the material.”  Civil penalty in the total amount of $17,250.

   
   

3. A penalty from the Massachusetts Attorney General for $222,141 against Railworks, a BCP owned company, for improperly paying 84 employees on five public works projects by neglecting to provide complete overtime wages and failing to account for different hourly pay rates. The company also did not submit accurate payroll records to the government on a weekly basis.  

   
   

This is a small sample of the violations we uncovered. Our knowledge remains incomplete without fulsome responses from BCP, but what we do know reflects poorly on the operational practices of the company, an issue that is particularly important in the context of a gas utility that stores and transports a dangerous flammable gas into more than 540,000 homes in New Mexico.  Not only did BCP fail to respond to the majority of our questions, testimony from the CEO Jeffrey Baudier directly contradicts or minimizes the nature of the violations we found independently, calling into question the accuracy of BCP’s testimony. These inaccuracies are detailed in our Motion.  

Joint Applicants’ discovery responses reflect a wholesale misunderstanding of the transparency that is required of them in the context of the acquisition of a regulated public utility.  We expect the PRC to exercise its authority to demand fulsome and extensive operational records from any company that wants to take over service to the captive utility ratepayers that are dependent on the PRC for protection.