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Puerto Rico moves to cancel contract with Whitefish Energy to repair electric grid

Puerto Rico’s electric company moved Sunday to cancel a $300 million contract with a small Montana firm for repairs to the territory’s hurricane-ravaged electrical grid, saying controversy surrounding the agreement was distracting from the effort to restore power.

The contract with Whitefish Energy — a firm that had just two employees the day the storm hit — had drawn blistering criticism from members of Congress for days. And on Friday the Federal Emergency Management Agency, which has a large role in determining government reimbursements, said it had “significant concerns” about how the contract was secured.

Thirty-nine days after Hurricane Maria hit the territory, Gov. Ricardo Rosselló said that he is requesting assistance from Florida and New York under “mutual aid” arrangements that utilities traditionally activate during emergencies. The territory had not previously done so and had not responded to offers of assistance.

About 80 percent of people 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,” Rosselló said in a news conference at La Fortaleza, the governor’s mansion. He did not cite specific information beyond what has been reported in media coverage.

Whitefish chief executive Andrew Techmanski has extensive experience in the electric transmission business, but Whitefish has received only small contracts, records show. Whitefish’s contract in Puerto Rico, the largest yet issued in the troubled relief effort, was not competitively bid.

Whitefish has said it has experience in mountainous terrain and that its business model calls for scaling up quickly.

In a statement, Whitefish said that it was “very disappointed” and that the utility’s decision “will only delay what the people of Puerto Rico want and deserve — to have the power restored quickly.” It said that it would “finish any work that PREPA” — the Puerto Rico Electric Power Authority — “wants us to complete and stand by our commitments.”

The company defended its performance, saying it had brought 350 workers, 2,500 tons of equipment and five helicopters to the island. It said repairs on a major transmission line, including work in remote, inaccessible areas, would soon bring electricity to large portions of San Juan, Puerto Rico’s capital.

“The original decision by PREPA to have Whitefish Energy come to the Puerto Rico only sped up the repairs, and if it were not for that action, crews would just now be getting to the island to begin the process of rebuilding the system and restoring power,” Whitefish’s statement said.

Whitefish Energy is based in Whitefish, Mont., the home town of Interior Secretary Ryan Zinke. Techmanski and Zinke know one another, The Washington Post reported last week, and at least four times Zinke’s wife, Lolita, has “liked” family and profile pictures uploaded by Techmanski’s wife, Amanda, on Facebook. One of the Zinkes’ sons had a summer job with Whitefish.

Zinke’s office has said he had no role in Whitefish securing the Puerto Rico contract. Andrew Techmanski also has said Zinke was not involved.

Rosselló said Sunday that he had spoken to Gov. Andrew M. Cuomo (D-N.Y.) and Gov. Rick Scott (R-Fla.) and that their involvement through mutual aid was expected to boost the number of repair brigades to 1,000 by Nov. 8, up from about 400 now.

Ricardo Ramos, executive director of PREPA, said Whitefish would be paid to complete ongoing work on two transmission lines, which he said could take as long as 30 days. Of the contract, he said, “the best thing that can happen is its cancellation.”

“There’s a perception risk, a reputation risk and a delay risk in continuing the contract,” he said.

The decision was a stark reversal for Ramos. On Friday, he offered an extensive defense of the contract, saying in an hour-long interview with The Post that PREPA had winnowed down a list of seven suitors for electricity repair before Hurricane Maria made landfall. He said the utility company had crafted the contract with Whitefish so the Montana firm would be paid for each transmission line fix only after it was completed and tested.

Yet, in the interview, Ramos acknowledged that the island’s utility company did not require any substantial assurance that Whitefish would complete the work it had promised. PREPA did not require any performance bond, he said. By contrast, when the U.S. Army Corps of Engineers signed a $240 million contract this month for similar work with Flour, an engineering firm based in Texas, it required the company to produce a $150 million performance bond within five days.

Read full article at The Washington Post