Puerto Rico cancels $300M electrical contract with Whitefish

Associated Press

SAN JUAN, Puerto Rico

The head of Puerto Rico's power company said today the agency will cancel its $300 million contract with Whitefish Energy Holdings amid increased scrutiny of the tiny Montana company's role in restoring the island's power system after Hurricane Maria.

The announcement by Ricardo Ramos came hours after Gov. Ricardo Rossello urged the utility to scrap the deal for Whitefish's help in rebuilding the electrical system.

"It's an enormous distraction," Ramos said of the controversy over the contract. "This was negatively impacting the work we're already doing."

The current work by Whitefish teams will not be affected by the cancellation and that work will be completed in November, Ramos said. He said the cancellation will delay work by a couple of months because the government will have to find new companies to help restore power to the island.

Ramos said he had not talked with Whitefish executives about his announcement. "A lawsuit could be forthcoming," he warned.

Whitefish spokesman Chris Chiames told The Associated Press before the Ramos announcement that the company would soon issue a comment.

Roughly 70 percent of the U.S. territory remains without power more than a month after Maria struck on Sept. 20 as a Category 4 storm with winds of up to 154 mph (245 kph). Ramos said Sunday that the total of cost of restoring the system would come to $1.2 billion.

The cancellation is not official until approved by the utility's board. Ramos said it would take effect 30 days after that.

Ramos said the company already has paid Whitefish $10.9 million to bring its workers and heavy equipment to Puerto Rico and has a $9.8 million payment pending for work done so far

Ramos said cancellation of the contract will not lead to a penalty, but it's likely the government will pay at least $11 million for the company to go home early, including all costs incurred in the month after the cancellation.

Federal investigators have been looking into the contract awarded to the small company from Interior Secretary Ryan Zinke's hometown and the deal is being audited at the local and federal level.