Brigham and Women's sues company that provides Longwood institutions with electricity; charges it's trying to squeeze millions of dollars out of the hospital with bogus fee

Brigham and Women's Hospital today sued the companies that run the Medical Area Total Energy Plant (MATEP) - which provides electricity, heat and chilled water to Longwood Medical Area facilities - for trying to add what the hospital says is a bogus "reliability adder" to boost its profits by millions of dollars on the back of the medical center and other institutions.

In its suit, filed in Suffolk Superior Court, Brigham and Women's says Engie North America and Axium Infrastructure Partners, which acquired MATEP in 2018, are violating contracts, not due to expire until 2051, which require MATEP to charge no more for electricity than what the hospital would otherwise pay Eversource - or another private company - for electricity.

The hospital alleges that the two companies bought MATEP to "gain a competitive advantage in the burgeoning 'energy-as-a-service' market by trading on the names of MATEP's prestigious customers, which also include Beth Israel Deaconess Medical Center, Boston Children's Hospital, the Joslin Diabetes Center and Harvard Medical School - and that the effort worked, since the two companies now also provide energy to the University of Iowa and Georgetown University. Now, the hospital charges, the companies are getting greedy:

As is now clear, MATEP's owners never intended to honor the contract over its term. Almost immediately after [they] acquired MATEP, it sought to renegotiate the contract into a form more favorable to MATEP. When MATEP was unsuccessful in those efforts, MATEP unilaterally imposed a newly concocted electricity pricing surcharge for "reliability" (the "Reliability Adder") that is untethered to the contract. [Their] goal, through MATEP, was to (1) obtain additional revenue that has no basis under the existing contract and (2) force Brigham & Women's to negotiate a new contract that would be more favorable to MATEP from an operational and financial perspective.

The hospital alleges that since MATEP added its fee last year, Longwood institutions have been billed a total of an extra $16 million for electricity - $3.7 million of which MATEP says Brigham and Women's owes.

The hospital is seeking a jury trial at which to make its case that the "reliability" charge is unenforceable and that it is owed the money it has so far paid for it, plus damages and attorneys' fees.

MATEP, which owns the giant concrete smokestack that towers over the medical area, has origins that date to 1906, when Harvard set up a power plant for its medical school. Harvard gradually expanded the concern to power other buildings in the area and built its current plant and smokestack in the 1980s. It sold the whole thing to a private concern, Advanced Energy Systems, in 1998.

Complete complaint (20M PDF).