Lawyers warned Puerto Rico utility against Whitefish contract

Lawyers for Puerto Rico’s electric utility warned officials against signing an expanded repair contract worth $300 million with Whitefish Energy Holdings, documents obtained by lawmakers show.

The revelation was among 2,000 pages of documents that the House Natural Resources Committee released Monday after receiving them from the Puerto Rico Electric Power Authority (PREPA) as part of the panel’s investigation into the Whitefish deal.

The documents, first obtained by The Washington Post, show numerous red flags in the process by which PREPA came to the agreement with the Montana company that had only a handful of employees before Hurricane Maria hit in late September.

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They show that Whitefish, which is also under investigation by the FBI, charged PREPA around two times what it paid subcontractors in hourly rates.

The records also show that PREPA is likely to continue paying Whitefish millions of dollars in the coming weeks despite saying recently that it would cut off the contract as soon as possible.

The documents were released ahead of a pair of congressional hearings Tuesday at which lawmakers plan to grill Puerto Rican officials, including Gov. Ricardo Rosselló, about the Whitefish contract and other hurricane recovery issues.

Rep. Rob Bishop (R-Utah), chairman of the Natural Resources Committee, said the Whitefish documents demonstrate deep-seated problems.

“A legacy of dysfunction [at PREPA] has created a competence deficit that threatens the Island’s ability to improve conditions for its citizens. Confidence in the utility’s ability to manage contracts and time-sensitive disaster related infrastructure work is long gone,” said Bishop.

Whitefish CEO Andy Techmanski took to Morning Consult Tuesday to hit back against criticisms of the company and defend its work. 

“We have restored power to more than 500,000 citizens, completed more than 200 miles of transmission and distribution lines, forged new access roads and mobilized more than 500 power line workers and 600 pieces of equipment to carry out this critically important work,” Techmanski wrote.

He said that the rates Whitefish charged reflected unique challenges on the island, like its isolation, mountainous terrain and other factors.

Whitefish, Techmanski said, was the only reasonable option Puerto Rico had.

He also asserted that the Federal Emergency Management Agency (FEMA) helped PREPA prepare the Whitefish contract to be compliant with federal rules, something that FEMA has forcefully denied.