Puerto Rico officials defend Whitefish contract before Congress

Top Puerto Rico officials defended the territory’s response to Hurricane Maria, telling a Senate committee on Tuesday that they worked quickly to try and repair the island’s electric grid.

The head of the island’s state-run energy utility said their original decision to grant a large grid repair contract to a small Montana energy firm was the right one, given the promises the company made to the island.

“I authorized the Whitefish [Energy] contract while we continued to seek additional assistance from others for the complete, multibillion-dollar restoration effort still to come,” Ricardo Ramos, executive director of the Puerto Rico Electric Power Authority (PREPA), told the Senate Energy and Natural Resources Committee Tuesday.

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“My priority was securing the immediate assistance of first responders that we desperately needed,” he said.

Lawmakers, government watchdogs and investigators have scrutinized Puerto Rico’s $300 million repair contract with Whitefish Energy, a Montana firm which only had two employees when Maria hit the island on Sept. 20. Whitefish has charged high fees for repair work on the island, and the Trump administration has distanced itself from the deal.

Territorial authorities canceled its contract with the company late last month amid increasing scrutiny, though Whitefish continues working on the island. Puerto Rico has entered into mutual aid agreements with states and nonprofits for other repair work.

Senators on Tuesday questioned why the island didn’t move faster to enter into the mutual aid agreements, which traditionally cost less than private-sector work.

“The notion that someone comes in there to gouge the Puerto Rico government and the U.S. taxpayer, charging them an exorbitant rate, and then writing them a contract so they can’t be reviewed properly, is a great injustice to the U.S. taxpayer,” Sen. Maria Cantwell (D-Wash.) said.

But Ramos said a private-sector deal — or one backed by federal emergency management agencies — offered Puerto Rico the promise to repair the island’s grid more quickly than mutual aid agreements.

Ramos said the contract offered by Whitefish was the most preferable because Puerto Rico didn’t need to make a large downpayment, something it couldn’t afford to do because of the island’s poor finances.

“After the devastation of Hurricane Maria, I believed PREPA was unable to meet the requirements for mutual aid” set by outside agencies, Ramos said.

“I needed people that were self-contained, military-unit types that could bring their diesel, that could bring their food — everything — and act as first responders,” he said.

Nearly two months after the devastating storm hit, less than 50 percent of Puerto Rico has power, though Gov. Ricardo Rosselló said workers should cross that threshold by Wednesday. The island is aiming to have 95 percent of its power restored by the end of the year.

Whitefish has defended its work on the island and its contract with Puerto Rico, saying its fees were in line with the cost of doing repair work on the island territory. 

“Typically in storm restoration work, other repair workers can drive from neighboring states, stay in hotels on the outskirts of the storm where there still is electricity, and drive their bucket trucks into the storm area daily to perform repair work,” Whitefish CEO Andy Techmanski wrote in a Morning Consult op-ed on Tuesday.

“Such ease of access was not possible in Puerto Rico since workers and equipment all needed to be sent to the island by air or by water,” he wrote.

But lawmakers made it clear they’re still upset about the Whitefish contract and the island’s slow recovery efforts.

“It’s one thing to be responsive in the immediate aftermath of a hurricane,” Sen. Lisa Murkowski (R-Alaska) said. “It’s another thing to be engaged in something we would call gouging of the taxpayer when you look at the terms that were agreed to.”

— Updated at 3:26 p.m.