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Puerto Rico rips up Whitefish energy contract

The CEO of the island's power authority said: "We’re working in an emergency. Everybody is working on 10 things at once. I don’t want to give apologies, but those things happen.”

by David Gilbert
Oct 30 2017, 7:25am

A controversial $300 million contract awarded to a tiny Montana energy company to repair storm-damaged electricity lines in Puerto Rico was canceled Sunday amid concerns of cronyism.

The Puerto Rico Electric Power Authority (PREPA) revoked the hastily drafted contract with Whitefish Energy hours after Puerto Rico Gov. Ricardo Rosselló said he’d petitioned the state-owned utility to “immediately” cancel the agreement as it was a “distraction.”

Ricardo Ramos, CEO of PREPA, said: “We’re working in an emergency. Everybody is working on 10 things at once. I don’t want to give apologies, but those things happen.”

The contract to repair power lines to connect critical infrastructure came under intense scrutiny for several reasons:

  • The contract was awarded without a competitive bidding process
  • Whitefish is based in the hometown of Interior Secretary Ryan Zinke
  • Zinke is an acquaintance of Whitefish CEO Andy Techmanski
  • The head of one of Whitefish’s major investors is Joe Colonnetta, a Trump campaign donor
  • The contract reportedly prohibits anyone from auditing or reviewing the prices that Whitefish charge
  • The contract stipulates site supervisors are paid $330 per hour

Besides investigations by the Puerto Rico Energy Commission and the House Committee on Natural Resources, the Federal Emergency Management Agency is also probing the deal, as payments would likely come out of disaster relief payments to PREPA.

In a statement, the company said the decision to cancel the contract “will only delay what the people of Puerto Rico want and deserve — to have the power restored quickly in the same manner as their fellow citizens on the mainland experience after a natural disaster.”

Five weeks after Hurricane Maria tore across the island, 72 percent of the residents are still without power, making it the longest power outage in U.S. history.