The Slatest

Puerto Rico Cancels Controversial $300 Million Energy Contract With Whitefish

RICARDO ARDUENGO/AFP/Getty Images

Puerto Rico has finally decided to go ahead and begin the process of canceling a $300 million contract that was sealed to rebuild part of the island’s power grid that was decimated by Hurricane Maria. Puerto Rico’s Electric Power Authority (PREPA) moved to cancel the contract with Whitefish Energy Sunday afternoon, mere hours after the Island’s governor, Ricardo Rosselló, called for the increasingly controversial contract to be scrapped.

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There have been questions surrounding the contract pretty much since its inception, with many people wondering how a Montana company with only two-full time employees got an emergency contract to deal with the dire situation in Puerto Rico, where the vast majority of residents remain without power nearly six weeks after Hurricane Maria hit. Questions surrounding the deal only increased after it was revealed that the company’s chief executive was from the same small town as Interior Secretary Ryan Zinke. The Washington Post also revealed Zinke’s son had previously been employed by Whitefish, which had no experience in large-scale power grid repairs. Zinke has denied he had anything to do with awarding the contract. But Whitefish certainly didn’t help its case when it suggested it could remove its crews from San Juan after the city’s mayor raised questions about the contract (the company later apologized).

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The controversy over the contract also grew after the Federal Emergency Management Agency said on Friday that it had “significant concerns” about how Whitefish won the contract. FEMA threatened it could refuse to cover the costs of the contract if anything about how the contract was awarded was found to be improper.  

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Scrapping the contract won’t be immediate. The board of Puerto Rico’s power company still has to approve the move and Whitefish would be allowed to finish its ongoing work. Canceling the contract will delay the completion of the pending projects by as long as three months, but officials say they see no other choice.  “It’s an enormous distraction,” Ricardo Ramos, the head of the power company, said. “This was negatively impacting the work we’re already doing.”

Whitefish Energy issued a statement Sunday saying it was “very disappointed” by the move. “The decision will only delay what the people of Puerto Rico want and deserve—to have the power restored quickly in the same manner their fellow citizens on the mainland experience after a natural disaster,” the company said.

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