Puerto Rico cancels $300M power contract with small Montana company

Puerto Rico cancels $300M power contract with small Montana company

The head of Puerto Rico's power company announced Sunday it will cancel the controversial $300 million contract with Whitefish Energy Holdings, a small Montana firm under scrutiny for its effort to coordinate restoring electricity on the island after Hurricane Maria.

The announcement came just hours after Puerto Rico Gov. Ricardo Rosselló called for the contract to be terminated.

Ricardo Ramos, head of the Puerto Rico Electric Power Authority (PREPA), said Whitefish has been working diligently to repair and replace downed power lines. But he said questions over the deal from the governor and Washington officials have turned the partnership into a dangerous situation.

The current work by Whitefish will not be affected by the cancellation, and that work will be completed in November, Ramos said. He said the government will need to find new companies to help restore power.

Ramos said Whitefish crews were initially cheered by Puerto Ricans but have been unfairly turned into villains because of the controversy, with some power crews targeted by residents throwing rocks.

"All of the work is being done," Ramos said. "But we have to eliminate these distractions."

Ramos said he will immediately begin the process of canceling the contract, which must be approved by PREPA's board of directors and includes a 30-day notification process

He also said Whitefish would not be paid $300 million, which represented the maximum possible if the job was completed. Instead, Ramos said Whitefish had completed work that will earn closer to $20 million.

Whitefish — based in Whitefish, Mont., the hometown of Interior Secretary Ryan Zinke — was formed two years ago and had two employees when it was awarded a contract with PREPA six days after the massive hurricane struck on Sept. 20.

Since then, Whitefish has struggled to get power crews to Puerto Rico to repair the ravaged electrical grid. As of Sunday, 70% of the U.S. territory remained without power.

Democrats and Republicans in Congress have called for investigations. Last week, Rosselló requested that the inspector general of the Department of Homeland Security look into the contract.

The Federal Emergency Management Agency (FEMA) also raised doubts. FEMA issued a statement on Friday that it was not involved in awarding the contract and said it had not yet approved any reimbursement money for Whitefish.

"Based on initial review and information from PREPA, FEMA has significant concerns with how PREPA procured this contract and has not confirmed whether the contract prices are reasonable," FEMA said.

On Sunday, Rosselló went further and asked PREPA to cancel the contract with Whitefish and immediately begin coordinating with utility companies in Florida and New York to restore electricity.

Rosselló said he had discussions with Florida Gov. Rick Scott and New York Gov. Andrew Cuomo to have officials from those states take over the monumental task of rebuilding the island's electrical grid. Florida and New York are home to about 40% of the 5 million people of Puerto Rican descent living on the U.S. mainland.

Cuomo has made two trips to Puerto Rico since Maria struck and sent emergency crews to help with recovery efforts. Scott has also visited the island and declared a state of emergency in Florida to make it easier for local officials to help Puerto Ricans fleeing to the mainland.

Rosselló also announced that he will use his emergency powers to install a government official to work with PREPA'S contracting division.

Whitefish is backed by a private equity, HBC Investments, which is headed by Joe Colonnetta, a major donor to President Trump's election campaign, the Trump Victory PAC and other GOP candidates. 

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Source : http://www.wtsp.com/news/nation-world/puerto-ricos-governor-demands-terminating-power-contract-with-small-montana-company/487010485

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