September 24, 2020, 8:07

Lawmakers probing why small business landed $300M Puerto Rico power contract

Lawmakers probing why small business landed $300M Puerto Rico power contract

With more than 75 percent of Puerto Rico still without electricity in the wake of Hurricane Maria, lawmakers are calling for an investigation into why the island turned to a small, for-profit company instead of the mutual-aid network of public utilities usually called upon to coordinate power restoration after disasters.

Montana-based Whitefish Energy was awarded a $300 million Puerto Rico Electric Power Authority (PREPA) contract to repair downed transmission lines crisscrossing the mountains, the company confirmed to ABC News.

Founded in 2015, Whitefish — which had just two full-time employees when the contract was signed — says it has mobilized a team of nearly 300 subcontractors in Puerto Rico, with more on the way.

“Our rates are competitive and our work is top rate,” spokesperson Chris Chiames told ABC News, adding that the company is uniquely qualified to tackle the situation in Puerto Rico due to the CEO’s experience in “rugged and remote terrain.”

But officials are questioning why PREPA chose to work with Whitefish instead of reaching out to the American Public Power Association, which normally matches states hit by disasters with nearby public power utilities who have offered up crews and equipment.

“To date, PREPA has not requested aid from the association,” APPA confirmed. “The entire electric utility industry is standing by to send help as requested.”

PREPA Executive Director Ricardo Ramos said Tuesday he ruled out APPA assistance because it would have required the agency, which is currently bankrupt, to handle logistics for crew lodging and food.

Other power restoration companies were ruled out because they required a large upfront deposit, which PREPA cannot afford to pay, he said.

Under the Whitefish contract, the agency paid only $3.7 million for initial “mobilization of personnel and equipment;” further advance payments are not required.

“Whitefish was the only company — it was the first that could be mobilized to Puerto Rico. It did not ask us to be paid soon or a guarantee to pay,” Ramos told reporters in Spanish. “For some reason, someone in the United States has to be upset, because they aren’t here, that I have hired Whitefish — but that is their problem.”

Still, lawmakers are demanding answers.

“There is something very fishy about the Whitefish deal,” Democratic Rep. Luis Gutierrez, Ill., said in a statement to ABC News. “I have been here 25 years and this doesn’t pass the smell test.”

“Congress needs to understand why the Whitefish contract was awarded and whether other, more cost-effective options were available,” Rep. Raul Grijalva, R-Ariz., said in another statement.

Complicating matters are concerns over the relationship between Whitefish founder Andy Techmanski and Interior Secretary Ryan Zinke.

Both parties have confirmed the families know one another — in their small hometown, “everyone knows everyone” the Interior Department said.

But both insist that Zinke did not advocate on Whitefish’s behalf.

The company says it called Puerto Rico before Maria hit to pitch its own services.

Whitefish “showed up at the right place at the right time and that’s how they got the contract,” Sen. Marco Rubio, R-Fla., told ABC News. “We want to see restoration pick up. Every day that they’re without power is a day that economy isn’t functioning and it’s another day people are suffering. ”

Ramon Espinosa/APWhitefish Energy Holdings workers restore power lines damaged by Hurricane Maria in Barceloneta, Puerto Rico, Oct. 15, 2017.

Hiring a company like Whitefish, which relies on subcontractors rather than a staff of trained personnel “didn’t make a lot of sense,” Sergio Marxuach, policy director at the nonpartisan Center for a New Economy, told ABC News. “This is one of the reasons people down here really hate PREPA — they do business behind closed doors and it ends up costing a lot of money.”

How Whitefish rates compare with public utility prices remains unclear.

The Federal Emergency Management Agency — which will likely be asked to reimburse PREPA for the cost of Whitefish’s contract — says it was not involved in the selection.

PREPA did not immediately respond to ABC News’ request for comment.

Source: abcnews.go.com

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