Puerto Rico wants out of $300M contract

Mont. power company is in hometown of Sec. Zinke

SAN JUAN, Puerto Rico — Puerto Rico’s governor on Sunday demanded that the board of the island’s power company cancel the $300 million contract with Whitefish Energy Holdings amid increased scrutiny of the Montana company’s role in Hurricane Maria recovery efforts.

The announcement by Gov. Ricardo Rossello comes as federal legislators seek to investigate the contract awarded to the small company from Interior Secretary Ryan Zinke’s hometown.

“There cannot be any kind of distraction that alters the commitment to restore electrical power as soon as possible in Puerto Rico,” Rossello said, adding that nearly $8million has been paid to Whitefish so far.

Rossello said he has requested that crews from New York and Florida come help restore power in Puerto Rico as he criticized the U.S. Army Corps of Engineers for not meeting its goals. The agency could not be immediately reached for comment.

Audits of the Whitefish contract at a local and federal level are ongoing, and the governor also announced the appointment of an outside coordinator to oversee the power company’s purchase and contracting division.

Roughly 70 percent of the island remains without power more than a month after Hurricane Maria struck the U.S. territory on Sept. 20 as a Category 4 storm.

Power company Director Ricardo Ramos has said that Puerto Rico’s Electric Power Authority reached a deal with Whitefish just days before the hurricane struck, saying that he spoke with at least five other companies that demanded similar rates, in addition to a down payment the agency did not have. Ramos also said the Federal Emergency Management Agency had approved of the deal, something the agency has denied.

FEMA said it has not approved any reimbursement requests from the power company for money to cover repairs to the island’s electrical system. The contract said the utility would not pay costs unallowable under FEMA grants, but it also said, “The federal government is not a party to this contract.”

FEMA has raised concerns about how Whitefish got the deal and whether the contracted prices were reasonable. The 2-year-old company had just two full-time employees when the storm hit, but it has since hired more than 300 workers.

A Whitefish contract obtained by The Associated Press found that the deal included $20,277 an hour for a heavy lift Chinook helicopter, $650 an hour for a large crane truck, $322 an hour for a foreman of a power line crew, $319 an hour for a journeyman lineman and $286 an hour for a mechanic. Each worker also gets a daily allowance of $80 for food, $332 for a hotel room and $1,000 for each flight to or from the mainland.

Whitefish Energy Holdings is based in Whitefish, Mont. Zinke, a former Montana congressman, knows Whitefish CEO Andy Techmanski, and Zinke’s son also had a summer job at a Whitefish construction site.