Sun Sentinel Palm Beach Edition
Puerto Rico boots Whitefish
The island’s power company canceled a controversial $300 million contract.
Puerto Rico’s electric power company said Sunday it was canceling a controversial $300 million contract it had signed with a small Montana-based company and tasked with a central role in repairing the territory’s hurricane-ravaged electric grid.
The move came after Gov. Ricardo Rossello said the contract was a distraction and should be canceled after critics in the electric power industry, Congress and the Federal Emergency Management Agency raised questions about whether the company, Whitefish Energy, was well equipped to respond to the hurricane damage.
More than a month after Hurricane Maria hit the territory — and only two days before a hearing of the Senate Homeland and Governmental Affairs Committee — Rossello said he would request assistance from Florida and New York under mutual aid arrangements that utilities traditionally activate to help other states during an emergency. About 80 percent of the people living on the commonwealth’s main island still have no electricity.
“As a result of the information that has been revealed and the need to protect the public interest, as governor I am asking the power authority to cancel the Whitefish contract immediately,” Rossello said Sunday.
In tweets Sunday morning, Rossello called for additional measures to scrutinize contracting by the territory’s power authority more carefully. He said there should be a “special outside coordinator” to monitor the utility’s purchases so we “can have more clarity in this process.”
The governor’s statements, however, added to the confusion about the oversight of the utility and the commonwealth, both of which are bankrupt. A financial oversight board that Congress created for Puerto Rico is planning to ask a federal court this week for clear authority to examine contracts as small as $10 million. The federal judge is overseeing the restructuring of Puerto Rico’s more than $70 billion in debts.
Rossello has been battling the influence of the oversight board. But Congress sees the board’s role as crucial.
Whitefish, Mont., is the home of Interior Secretary Ryan Zinke, although the company said he played no role in securing the business. One of Zinke’s sons worked for Whitefish Energy over the summer.
Many in the industry have suggested that Whitefish Energy’s pay scales — as high as $462 an hour — were much higher than is typical even in an emergency such as the one facing Puerto Rico. The contract rates included costs, administrative expenses and profits for Whitefish.
The rates PREPA agreed to pay Whitefish for supervisors would work out to $900,000 a year. The rate of $319.04 an hour for a lineman works out to $622,000 a year.
The average rate for a lineman who helped restore electric power to Florida residents after Hurricane Irma hit there was $165 per hour. Five local firms charged $116 per hour, said a source familiar with the rates.
FEMA said Friday that it had not approved the Whitefish Energy agreement.