A “fraudulent” $818 million mobile generator deal between CenterPoint Energy and a small Houston startup may have begun thanks to a relationship between CenterPoint’s then-CEO and a recent college graduate.
The deal, made in 2021, involved CenterPoint leasing 20 mobile power generators from Life Cycle to maintain electricity during extreme weather events. The cost of the lease was passed on to Houston-area residents through an average charge of $2.87 on their monthly electric bills. However, when Hurricane Beryl hit recently, the generators were largely ineffective, leaving millions without power for days and resulting in over 30 heat-related deaths.
According to Texas Monthly, some critics have argued that the deal may have been influenced by a personal relationship between CenterPoint’s then-chief executive David Lesar and Knoell Coombs, Life Cycle’s head of business development. The two met around 2014, when they both worked for Halliburton. Lesar was the chief executive, and Coombs ran the company’s corporate gyms and wellness programs. She said her job involved talking to everyone in the company, from the janitor to the CEO.
CenterPoint confirmed that the two had a relationship, though it did not specify the nature of the relationship. According to the Texas Monthly, the two can be seen posing together in a deleted Facebook post.
Coombs went on to work for Life Cycle, and Lesar became CenterPoint’s chief executive.
After the 2021 winter storm caused deadly power outages, the Texas Legislature passed a law allowing utilities to lease mobile generators. The company then began a bidding process to acquire the generators.
Administrative judges warned the bidding process showed a “lack of transparency and fairness,” and that it unreasonably favored Life Cycle.
The questionable bidding process was highlighted by the fact that Life Cycle, a smaller company, won the contract despite submitting a bid that was significantly higher than its competitor, Distributed Power Solutions (DPS). DPS’s bid was reportedly 44% lower for 32-megawatt generators and 60% lower for smaller generators. CenterPoint, however, defended its decision, stating that Life Cycle was the only vendor capable of delivering the generators on time, although they ultimately missed the deadline.
Emails between the two companies before the bidding process began also suggest that Life Cycle was favored from the start.
In 2022, administrative law judges found many inconsistencies in the bidding process and that the company failed to justify why it needed so many mobile generators.
However, the Public Utility Commission overruled the judge and allowed the company to lease the generators.
The controversy has prompted the Texas Senate to investigate further, with legislators questioning whether CenterPoint prioritized profits over public service.
In response to the mounting allegations, CenterPoint has launched an internal review of the leasing process. The company continues to insist that the generators could be valuable in future emergencies, but their performance during Hurricane Beryl has cast significant doubt on this claim.
The Senate has said it plans to hold CenterPoint accountable and explore legislative action to address the issues in the upcoming session, but another investigation found that senators voted almost unanimously for legislation making it easier for the company to lease the generators.
