Small company awarded $300M contract to restore Puerto Rico power

Thursday, October 26, 2017 08:29AM
Lawmakers seek probe of power contract to Zinke neighbor. Tamala Edwards reports during Action News at 4:30 a.m. on October 26, 2017.


WASHINGTON - Members of Congress from both parties on Tuesday called for an investigation into a $300 million contract awarded to a small company based in Interior Secretary Ryan Zinke's hometown of Whitefish, Montana.

The Puerto Rico Electric Power Authority awarded the contract to Whitefish Energy Holdings to help crews restore transmission and distribution lines damaged or destroyed during Hurricane Maria. The two-year-old company had just two full-time employees when the storm hit last month, but says it is contracting with hundreds of workers for the Puerto Rico project.

Maria hit the island on Sept. 20 as a Category 4 storm, killing more than 50 people and knocking out electricity to the whole island. More than a month later, only 30 percent of customers have power.

Rep. Raul Grijalva of Arizona, senior Democrat on the House Natural Resources Committee, said Congress "needs to understand why the Whitefish contract was awarded and whether other, more cost-effective options were available."

A spokesman for Natural Resources Committee Chairman Rob Bishop, R-Utah, agreed that congressional review was needed. The resources panel oversees Puerto Rico, a U.S. territory.

"The size and unknown details of this contract raise numerous questions. This is one of many things the committee is taking a close look at as it continues to work with the resident commissioner, governor's office and oversight board to ensure Puerto Rico's recovery is robust, effective and sustained," said Parish Braden, a spokesman for Bishop.

The Interior Department denied that Zinke, a former Montana congressman, played any role in the contract award. Zinke's son had a summer job at a Whitefish construction site.

"Neither the secretary nor anyone in his office have taken any meetings or action on behalf of this company," the department said in a statement.

Zinke knows Whitefish CEO Andy Techmanskis "because they both live in a small town where everyone knows everyone," the statement said.

Sen. Maria Cantwell, D-Wash. said she has asked the Government Accountability Office to investigate the contract award to Whitefish Energy, which she called a "brand-new company with two employees."

Ricardo Ramos, director of Puerto Rico's power authority, said the government has a $300 million contract with Whitefish and a separate $200 million contract with Oklahoma-based Cobra Acquisitions after evaluating up to six companies for the job.

Whitefish was one of two companies on the government's shortlist, Ramos said. The other company was requiring a $25 million down payment, given the power authority's troubled finances. PREPA filed for bankruptcy in July and has put off badly needed maintenance for years. It just finished dealing with outages from Hurricane Irma in early September.

Whitefish said it is sending hundreds of workers, mostly subcontractors, to Puerto Rico and is providing hotel rooms and its own materials. "They're doing an excellent job," Ramos said.

Whitefish CEO Techmanski visited Puerto Rico in late summer while on vacation and established contact with PREPA and discussed potential future work, company spokesman Chris Chiames said Tuesday. When Maria hit Sept. 20, Whitefish was one of the companies that power authority officials were able to reach by satellite phone.

"We got here quicker than anybody else and we built a plan that PREPA had confidence in," Chiames said in telephone interview.

Puerto Rico Gov. Ricardo Rossello said power contracts awarded by PREPA will be audited.

Grijalva said lawmakers also need to know why the Federal Emergency Management Agency, the Army Corps of Engineers and public sector utilities "failed in Puerto Rico to conduct the disaster-response planning they carried out ahead of other disasters this year" in Texas, Florida and other states.

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Associated Press writers Danica Coto in San Juan and Ben Fox in Miami contributed to this story.
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