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Puerto Rico Just Canceled Whitefish Energy's Contract To Rebuild The Electrical Grid

The Puerto Rican power authority terminated its $300 million deal with the small Montana firm amid questions — and pending investigations — over how the contract was awarded.

Ricardo Arduengo / AFP / Getty Images

The Puerto Rico Electric Power Authority has canceled its controversial contract with Whitefish Energy, a small Montana firm that had been awarded a $300 million deal to rebuild part of the territory's power grid.

Ricardo Ramos, CEO of PREPA, made the announcement during a press conference on Sunday afternoon, hours after Puerto Rico's governor, Ricardo Rosselló, told reporters he had petitioned the state-owned utility to "immediately" cancel the contract, calling it a "distraction."

“It's interfering with everything and it doesn’t go towards the best interests of the people of Puerto Rico," Rosselló said of the contract, which came under intense scrutiny after weather.com reported that it was granted without a competitive bidding process.

PREPA also bypassed the usual mechanism involving the larger, more experienced American Public Power Association, which helped bring in workers from public utility companies across the US after Hurricanes Harvey and Irma this year.

On Friday, energy regulators launched a probe by the Puerto Rico Energy Commission, a broad investigation into the handling of energy contracts in Puerto Rico in the aftermath of Hurricane Maria. The House Committee on Natural Resources is also investigating the Whitefish contract specifically.

"We’re working in an emergency. Everybody is working on ten things at once. I don’t want to give apologies but those things happen," Ramos said Sunday, defending the decision to contract Whitefish and another private company, Cobra Acquisitions, LLC, to assist with restoring the grid.

“The best thing that can happen is its cancellation," he added. "But the investigations will continue."

In a statement Saturday, Whitefish emphasized its disappointment in the decision to terminate the deal, and touted its work in Puerto Rico thus far.

"The decision" to cancel the contract, the company said, "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."

Questions have also been raised about the company's possible ties to the Trump administration, including Interior Secretary Ryan Zinke, who is from the same Montana town that the company is based in and is reportedly an acquaintance of Whitefish Energy CEO Andy Techmanski. Trump campaign donor Joe Colonnetta is also the head of one of Whitefish Energy's major investors. Both Zinke and the White House have denied any federal involvement in the deal.

Democratic Sen. Maria Cantwell, a ranking member of the Senate Energy and Natural Resources Committee who had requested a federal investigation into the Whitefish contract, praised the decision to end the deal.

"An investigation to determine how we got into this situation in the first place must continue," Cantwell said Sunday. "Taxpayers should pay a fair rate for the emergency repairs Puerto Rico desperately needs — not be gouged by Whitefish Energy or anyone else."

Leaders in the House Committee of Natural Resources agreed, calling for "transparent accountability" in Puerto Rico's hurricane recovery efforts.

"Immediate actions must also be responsibly aligned with long-term rebuilding and revitalization efforts. Success depends on the cooperation and coordination of the Governor, the Oversight Board, PREPA’s Chief Transformation Officer and federal partners," the committee said in a statement to BuzzFeed News on Sunday.

Rosselló said Sunday that the Puerto Rican government will now seek mutual aid from New York and Florida energy authorities to help repair the island's power grid. He also said that he has asked PREPA to install a trustee to oversee contract procurements, and that Puerto Rico's comptroller will investigate the fast-tracked procurement of contracts under emergency conditions.


Nidhi Prakash is a reporter for BuzzFeed News and is based in New York

Contact Nidhi Prakash at nidhi.prakash@buzzfeed.com.

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