Puerto Rico gov seeks to cancel $300M Whitefish contract

Puerto Rico gov seeks to cancel $300M Whitefish contract

Puerto Rico gov seeks to cancel $300M Whitefish contract

The governor of Puerto Rico called for the cancellation of a controversial $300 million contract the island's utility signed with a small Montana-based company tasked with a central role in repairing the territory's hurricane-ravaged electric power grid.

More than a month after Hurricane Maria ravaged the Caribbean, over 70 percent of the US island territory still has no electricity. Nearly six weeks later, more than two thirds of customers remain in the dark.

The electric power industry says it wants to install a new "storm boss" to take charge of turning the lights back on in Puerto Rico. But questions arose soon after news broke on October 19 that the Montana-based company was chosen over bigger and better known companies vying for the job.

Whitefish and the island's public utility, the Puerto Rico Electric Power Authority, struck an agreement on September 26, six days after Maria swept through, without a formal bidding process.

Whitefish Energy Holdings officials have insisted that they secured the deal legitimately and would not oppose an audit of the company's work. "But as NPR's Laurel Wamsley has reported, "(p) ower companies don't generally use contractors to restore electricity but make arrangements for help from other utilities". The per diems are also expensive: nearly $80 a day for meals, and $332 a day for lodging. A general foreman costs $336 an hour and a lineman, $319.

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The Puerto Rican power authority's decision to forego "mutual aid" agreements with utilities from other areas - as is traditional after large-scale disasters - and assign the job to a for-profit company instead baffled many experts. But that would most likely have required assurances of payment, and PREPA has been bankrupt since July.

See the full text of the contract here.

Whitefish CEO Andy Techmanski said his company has 300 workers on the ground in Puerto Rico working to fix a crippled electrical system.

The Trump administration denied Friday (Oct. 27) that political connections had anything to do with restoring electrical connections in Puerto Rico, and Zinke said Friday he had nothing to do with the contract.

Prepa and the Puerto Rican government are saddled with massive debts.

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The Department of Homeland Security's inspector general has launched a review of the deal.

FEMA has denied approving the contract.

"FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable", it said.

In a statement on Thursday, Fema said: "Any language in any contract between Prepa and Whitefish that states Fema approved that contract is inaccurate".

Ramos said he is "very comfortable with any investigation" by Congress.

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Senate Energy and Natural Resources Committee Chair Lisa Murkowski, an Alaska Republican, has vowed to hold a hearing on the contract. A financial oversight board Congress created for Puerto Rico is planning to go to a federal court this week to seek clear authority to examine contracts as small as $10 million.

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