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February 19, 2018

Federal Authorities to investigate $300M Electric repair contract

The $300 million contract awarded to Whitefish Energy Holdings by the Electric Power Authority (PREPA) to help repair the destroyed power grid, which five weeks later works only less than 20% of its capacity, has begun to raise serious questions in the US Congress.

As part of the huge efforts to restore the damaged power grid in Puerto Rico, the publicly-owned Power Authority of PR  convened a two-year-old Montana company with only two full-time employees on the day the Hurricane made landfall on the island.

The company, Whitefish Energy, said last week that it has signed a $300 million contract with the Puerto Rico Electric Power Authority to repair and rebuild the island’s electricity infrastructure. The contract is the largest awarded in the relief efforts being made to get the island back to normal. This has sparked controversy in Congress, whom appointed FEMA and The island’s Federal oversight Board to investigate.

On Monday White Fish said that there were 280 workers in the territory, using linemen from all over the country, most of them as subcontractors, and the average number of new personnel rises from 10-20 workers per day. The company said it was about to complete the infrastructure work that will power some of the most important industrial facilities that are crucial to restarting the local economy.

According to the contract, the hourly rate was set at $330 for a site supervisor, and at $227.88 for a journeyman lineman. The cost for subcontractors, which make up the majority of Whitefish’s workforce, is $462 per hour for a supervisor and $319.04 for a lineman. Whitefish charges nightly lodging fees of $332 per worker and around $78 per day for food.

The Energy Authority or “PREPA”, has also chosen to employ Whitefish other than the “joint-aid” arrangements with other utilities. For many years, such agreements have helped American utilities – including those in Florida and Texas recently – to come back quickly after a natural disaster.

The unusual decision of hiring a small-profit company employs collective attention and concerns amid PR’s bankruptcy spending, which main purpose is to aid its 3.4 million residents, whom most of them have no electricity one month after the storm.

“The fact that there are so many utilities with experience in this and our mutual aid network has huge track record of helping each other out, it is at least odd why PREPA would go to Whitefish,” said Susan F. Tierney, former senior official at the Energy Department and State regulatory agencies. “I’m scratching my head wondering how it all adds up.”

The executive director for  PREPA, Ricardo Ramos, and their spokesperson did not answered why the mutual network was not activated. During a visit at the inactive Palo Seco power plant, Ramos told reporters that Whitefish was the first company that accepted their terms and conditions and were readily available to start ASAP.

The PR power Authority did not reached an agreement with Whitefish until September 26, almost one week after the Hurricane hit the island. In contrast, the Florida utility FPL requested joint-aid before Hurricane Irma made landfall. The outcome was a team of about 20,000 repair workers, including FPL employees, from over 30 states and Canada working on the first day.