For the sprawling effort to restore Puerto Rico’s crippled electrical grid, the territory’s state-owned utility has turned to a two-year-old company from Montana that had just two full-time employees on the day Hurricane Maria made landfall.
The company, Whitefish Energy, said last week that it had signed a $300 million contract with the Puerto Rico Electric Power Authority to repair and reconstruct large portions of the island’s electrical infrastructure. The contract is the biggest yet issued in the troubled relief effort.
Whitefish said Monday that it has 280 workers in the territory, using linemen from across the country, most of them as subcontractors, and that the number grows on average from 10 to 20 people a day. It said it was close to completing infrastructure work that will energize some of the key industrial facilities that are critical to restarting the local economy.
The power authority, also known as PREPA, opted to hire Whitefish rather than activate the “mutual aid” arrangements it has with other utilities. For many years, such agreements have helped U.S. utilities — including those in Florida and Texas recently — to recover quickly after natural disasters.
The unusual decision to instead hire a tiny for-profit company is drawing scrutiny from Congress and comes amid concerns about bankrupt Puerto Rico’s spending as it seeks to provide relief to its 3.4 million residents, the great majority of whom remain without power a month after the storm.
“The fact that there are so many utilities with experience in this and a huge track record of helping each other out, it is at least odd why [the utility] would go to Whitefish,” said Susan F. Tierney, a former senior official at the Energy Department and state regulatory agencies. “I’m scratching my head wondering how it all adds up.”
PREPA’s executive director, Ricardo Ramos, and a spokesman did not respond to emails asking why the utility didn’t activate the mutual-aid network. On a tour of the idled Palo Seco power plant, Ramos told reporters that Whitefish was the first company “available to arrive and they were the ones that first accepted terms and conditions for PREPA.”
[...]
Whitefish Energy is based in Whitefish, Mont., the home town of Interior Secretary Ryan Zinke. Its chief executive, Andy Techmanski, and Zinke acknowledge knowing one another — but only, Zinke’s office said in an email, because Whitefish is a small town where “everybody knows everybody.” [...] Zinke’s office said he had no role in Whitefish securing the contract for work in Puerto Rico. Techmanski also said Zinke was not involved.
Techmanski said in an interview that the contract emerged from discussions between his company and the utility rather than from a formal bidding process. He said he had been in contact with the utility two weeks before Maria “discussing the ‘what if’ scenarios” of hurricane recovery. In the days after the hurricane, he said, “it started to make sense that there was a need here for our services and others.”
On Thursday, Techmanski told CNN simply: “We called each *other.”
[...]
Shortly before Maria ravaged Puerto Rico, Whitefish landed its largest federal contract, a $1.3 million deal to replace and upgrade parts of a 4.8-mile transmission line in Arizona. The company — which was listed in procurement documents as having annual revenue of $1 million — was given 11 months to complete the work, records show.
Puerto Rico has 2,400 miles of transmission lines across the island, and 30,000 miles of distribution lines with 300 substations. Jeff Hawk, a spokesman for the U.S. Army Corps of Engineers’ power restoration task force, estimated that 80 percent of the grid has been damaged. A month after the storm, about 80 percent of customers remain without power.
[...]
Rosselló said Wednesday that the island would spend $490 million on the initial phase of repairing the commonwealth’s grid, adding that “a large portion of that would probably go to Whitefish” and another contractor. The utility gave Whitefish a $3.7 million initial payment for “mobilization of personnel and equipment,” the contract says. Whitefish could be paid as much as $300 million for up to two years of work.
Under the contract, the hourly rate was set at $330 for a site supervisor, and at $227.88 for a “journeyman lineman.” The cost for subcontractors, which make up the bulk of Whitefish’s workforce, is $462 per hour for a supervisor and $319.04 for a lineman. Whitefish also charges nightly accommodation fees of $332 per worker and almost $80 per day for food.
[...]
PREPA did not reach its agreement with Whitefish until Sept. 26, six days after the storm swept through. By comparison, the Florida utility FPL requested mutual aid before Hurricane Irma hit. The result was an army of nearly 20,000 restoration workers, including FPL employees, from 30 states and Canada at work on the first day.
On Oct. 1, FPL had teams assembled to assess damage in Puerto Rico. It posted notices in Spanish and English on its Facebook page: “FPL is ready to help Puerto Rico.” Florida Gov. Rick Scott mentioned the offer in a news release.
The Florida utility says it never received a reply. The Puerto Rican utility has not replied to offers of assistance from mutual-aid partners, according to the American Public Power Association, which coordinates such operations.
[...]
Kent McNellie, an investment professional at HBC, the Texas investment firm that is now the largest financier of Whitefish, said the company’s experience reconstructing a one-mile power line destroyed in a wildfire in Washington state was more relevant to Puerto Rico’s needs than is the experience of many companies on the mainland.
