Puerto Rico utility moves to scrap $300M Whitefish contract

By DANICA COTO

Associated Press

SAN JUAN, Puerto Rico — The head of Puerto Rico’s power company said Sunday the agency is cancelling its $300 million contract with Whitefish Energy Holdings amid scrutiny of the tiny Montana company’s role in restoring the island’s power system.

The announcement by Ricardo Ramos came hours after Gov. Ricardo Rossello urged the utility to scrap the deal for Whitefish’s help in rebuilding the electrical system from the damage inflicted by Hurricane Maria.

“It’s an enormous distraction,” Ramos said. “This was negatively impacting the work we’re already doing.”

The current work by Whitefish teams will not be affected by the cancellation and that work will be completed in November, Ramos said. He said the cancellation will delay pending work by 10 to 12 weeks if no alternatives are found.

Ramos said he had not talked with Whitefish executives about his announcement.

“A lawsuit could be forthcoming,” he warned.

Whitefish spokesman Chris Chiames told The Associated Press that the company was “very disappointed” in the governor’s decision, and said it would only delay efforts to restore power.

He said Whitefish brought 350 workers to Puerto Rico in less than a month and it expected to have a total of 500 this week. Chiames said the company completed critical work, including a project that will soon lead to a half million people in San Juan getting power.

“We will certainly finish any work that (the power company) wants us to complete and stand by our commitments,” he said.

Roughly 70 percent of the U.S. territory remains without power more than a month after Maria struck Sept. 20 as a Category 4 storm with winds of up to 154 mph. Ramos said Sunday that the total of cost of restoring the system would come to $1.2 billion.

The cancellation is not official until approved by the utility’s board. Ramos said it would take effect 30 days after that.

Ramos said the company already has paid Whitefish $10.9 million to bring its workers and heavy equipment to Puerto Rico and has a $9.8 million payment pending for work done so far.

Ramos said cancellation of the contract will not lead to a penalty, but it’s likely the government will pay at least $11 million for the company to go home early, including all costs incurred in the month after the cancellation.

Federal investigators have been looking into the contract awarded to the small company from Interior Secretary Ryan Zinke’s hometown and the deal is being audited at the local and federal level.

Ramos said the company contacted Puerto Rico’s Electric Power Authority two days before the storm hit, at a time when it was becoming clear the hurricane could cause massive damage.

Ramos earlier said he had spoken with at least five other companies that demanded rates similar to those of Whitefish, but also wanted a down payment the agency did not have.