Facing scrutiny, Puerto Rico’s power company announced Sunday that it will cancel a major contract with a Whitefish firm to restore electricity on the island following Hurricane Maria.
Whitefish Energy had a $300 million contact with the government-owned utility Puerto Rico Electric Power Authority. Whitefish Energy reported last month that it had been working since Sept. 26 to repair and construct electrical transmission infrastructure on the island.
The contract with Whitefish Energy, a 2-year-old company which just had two employees prior to Maria, has faced the scrutiny of federal investigators.
Announcement of the canceled contract came after Puerto Rico Gov. Ricardo Rossello urged the utility to end the deal with Whitefish Energy, according to Associated Press reports.
Ricardo Ramos, head of PREPA, said Whitefish will continue with its current work to be completed in November, but then end the contract with Whitefish. This will reportedly lead to a delay of 10 to 12 weeks in completing the work.
“It’s an enormous distraction,” Ramos said of the contract. “This was negatively impacting the work we’re already doing.”
Whitefish Energy Holdings on Sunday issued a statement through email defending its selection by PERPA, noting it could “move quickly and our ability to mobilize immediately exceeded all other efforts by other parties.”
“We are very disappointed in the decision by Governor Rosselló to ask PREPA to cancel the contract which led to PREPA’s announcement this afternoon,” the statement says. “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. We will certainly finish any work that PREPA wants us to complete and stand by our commitments knowing that we made an important contribution to the restoration of the power grid since our arrival on the island on October 2.”
Whitefish Energy Chief Executive Andy Techmanski has defended his company amid questions over the contract.
“There’s people out there on a witch hunt looking for something that does not exist,” he told NBC News in San Juan on Sunday.
He claims he reached out to PREPA after Hurricane Irma hit in September and kept in contact with the power utility, NBC reported.
Techmanski last December announced his proposal to develop a transformer manufacturing factory at the former Columbia Falls Aluminum Co. site. He claimed the venture would create up to 1,000 jobs once the factory hit full production. The project would depend on $20 million in pre-orders for transformers from power companies, before Techmanski would invest the $40 million necessary to construct the factory.
Federal investigators have been looking into the Puerto Rico contract and it has drawn criticism from members of Congress.
The Federal Emergency Management Agency on Friday said it had not approved a contract between PREPA and Whitefish Energy and has “significant concerns” with the contract.
“FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable,” the agency said in a statement.
A Whitefish Energy contract obtained by the Daily Inter Lake outlined hourly wages and supplementary employee charges. For example, hourly wages for a site supervisor were listed at $330, a project manager earned $247 an hour and journeyman lineman made $228 per hour.
When asked for the reason behind the high wages, Whitefish Energy representative Brandon Smulyan previously told the Inter Lake he could not give an immediate answer.
For comparison, the national average hourly wage for a journeyman lineman is $37 per hour, according to Glassdoor.com.
“Something that we believe is really important is Whitefish Energy is down there working …. these guys are doing things every single day when other groups are still trying to plan and get things going,” Smulyan said.
Whitefish Energy has defended its work in Puerto Rico and Sunday said in less than a month it brought 350 workers to the project and was on track to have more than 500 linemen on the island by this week.
“We also brought over 600 pieces and 2,500 tons of equipment, including 400 trucks, cranes and excavators, as well as five helicopters,” the company said Sunday.
The Washington Post reported that Whitefish was one of two companies that PREPA reached out to in the wake of Hurricane Irma, which struck the commonwealth in early September, just a few weeks before Maria made landfall. Ramos has praised Whitefish Energy’s work and said that “nothing illegal” had been done.
“They’re doing an excellent job,” he said.
Whitefish Energy has also come under scrutiny because of alleged ties to U.S. Interior Secretary Ryan Zinke, whose hometown is Whitefish. Techmanski has continued to deny any connection to Zinke.
Zinke’s office said he had no role in securing the contract, but one of his sons had a summer job with Whitefish Energy. In a statement released Friday, Zinke said neither he nor anyone in his office had advocated for the company.
“I had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico,” he said in the release. “Any attempt by the dishonest media or political operatives to tie me to awarding or influencing any contract involving Whitefish are completely baseless. Only in elitist Washington, D.C., would being from a small town be considered a crime.”