Nation

Puerto Rico scraps $300m contract to restore power grid

A Whitefish Energy crew restored power lines in Barceloneta, Puerto Rico. The company is based in Interior Secretary Ryan Zinke’s home state.
Ramon Espinosa/Associated Press
A Whitefish Energy crew restored power lines in Barceloneta, Puerto Rico. The company is based in Interior Secretary Ryan Zinke’s home state.

NEW YORK — At the request of Governor Ricardo Rosselló, the Puerto Rican power authority on Sunday canceled its contract with Whitefish Energy, which became embroiled in controversy because it is based in the hometown of Interior Secretary Ryan Zinke.

The Montana company, which was awarded a contract of up to $300 million to rebuild part of the island’s electrical infrastructure, had come under intense scrutiny.

The Federal Emergency Management Agency on Friday expressed “significant concerns” about how Whitefish won the contract.

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More than a month after Hurricane Maria struck Puerto Rico and ravaged its electrical grid, most of the island remains without power. Candles and flashlights serve as lighting, and for many, canned food has become a staple.

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Critics raised questions about why the power authority opted not to request aid from mainland utilities after Maria struck the territory. After natural disasters, power companies on the mainland often get help from other companies under mutual-aid agreements.

“There can be no distraction that alters the commitment to repair the power grid as quickly as possible,” Rosselló said Sunday. “I have given instructions to immediately proceed with the necessary coordination with the states of Florida and New York, in order for brigades and equipment to arrive on the island.”

The governor said the decision to ask New York and Florida for help was being made because the Army Corps of Engineers had not managed to get the job done in the time frame initially outlined.

Representatives of Whitefish and the Army Corps of Engineers were not immediately available to comment Sunday.

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On Thursday, the House Committee on Natural Resources, which oversees Puerto Rican affairs, sent a letter to the Puerto Rico Electric Power Authority, known as PREPA, demanding all records connected to the contract.

That same day, the inspector general’s office at the Department of Homeland Security said it was also investigating, and Rosselló ordered an audit of the contract.

In a statement Friday, FEMA said it had not confirmed whether prices listed in the contract between Whitefish and the power authority were reasonable.

In a copy of a contract circulating online, whose authenticity has not been verified, the power authority “represents and warrants that FEMA” approved the deal. But in its statement, FEMA said, “Any language in any contract between PREPA and Whitefish that states FEMA approved that contract is inaccurate.”

That contract cites the rates to be paid to Whitefish, including $188.07 to $440 an hour for the labor of its workers.

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Whitefish said Friday that it planned to cooperate with any information requests from lawmakers, federal officials “or other appropriate governmental bodies” and that it looked forward “to the facts coming to light.”

In an interview this month, Ricardo Ramos, chief executive of PREPA, said he had agreed to a contract with Whitefish because the company did not insist on a down payment.

Other companies, wary of PREPA’s bankruptcy, had demanded hefty sums, he said. PREPA had also been in talks with another company, Power Secure.

Asked how a company as small as Whitefish, which had just two full-time employees, could take on such a big job, Ramos said, “Every company is small at some point in time.”

He added that the company had sent a proposal after Hurricane Irma and before Maria, as had other companies. He studied its brochure and was interested in its work in mountainous terrain.

“They told us about the assets, how many helicopters, how many crews,” he said. “They told us about their capability and we can increase — double, triple, quadruple — the size of the crews and we went ahead and mobilized them.”

Power companies traditionally engage power companies from other states for help immediately after emergencies. Ramos said he did not do so in this case because the companies were hesitant to commit until they were sure where Maria would make landfall. Afterward, the Army Corps of Engineers was tasked with the job.

In a separate development, the Trump administration is exploring ways to relocate tens of thousands of Puerto Ricans to the US mainland for an extended period as parts of the territory remain devastated, Bloomberg News reported.

Officials at the Department of Housing and Urban Development are developing a plan to provide housing to some of the displaced population, Bloomberg said, citing people familiar with the matter.

Given the shortage of available housing on the island, the possibility of evacuating large numbers to the mainland has emerged as an option. Two people who spoke to HUD officials said that using large cruise liners had been suggested to move residents en masse.

Thousands of Puerto Rico residents have already fled to Florida and elsewhere since Maria struck. Florida Governor Rick Scott said that since Oct. 3, more than 73,000 Puerto Ricans had arrived in the state.