Puerto Rico cancels power contract with tiny Montana company Whitefish

Whitefish Energy, a two-person company, was awarded a $300m contract

A woman removes mud from her damaged house in Toa Baja, 35 km from San Juan, Puerto Rico, on 23 September 2017. (Getty)

Puerto Rico‘s electric company has said it will cancel a controversial contract with a tiny Montana company.

Whitefish Energy Limited, a two-person firm that was founded only in 2015, was awarded the $300m contract to help restore the US territory island’s power grid in the wake of Hurricane Maria.

It came just hours after Governor Ricardo Rossello called for the deal to be axed.

Mr Rossello asked the Governing Board of the Electric Power Authority to cancel it, according to his official Twitter account.

“It’s an enormous distraction,” said Ricardo Ramos, the head of the utility. “This was negatively impacting the work we’re already doing.”

Mr Rossello had also called for “a detailed and thorough investigation” of the procedures of emergency services procurement that led to Whitefish being given the contract.

The contract came under scrutiny when it was revealed Department of the Interior Secretary Ryan Zinke is from the same town as the company.

He has said he had “absolutely nothing” to do with the awarding of the contract.

A Whitefish investor was also a major donor to Donald Trump’s election campaign, USA Today reported.

Further criticism followed when the terms of the contract were made public. One particular clause prohibiting the government from auditing Whitefish’s financials regarding the Puerto Rico project.

Amid the swirling controversy, Whitefish took to Twitter and wrote: “We’ve got 44 linemen rebuilding power lines in your city & 40 more men just arrived. Do you want us to send them back or keep working?”

They later deleted the tweet and apologised for the comment.

San Juan Mayor Carmen Yulín Cruz also told Yahoo News the contract “alarming” last week, adding that “it seems like what the Puerto Rican people are going to be paying for, or the American people are going to be paying for, is an intermediary that doesn’t know what is at stake here and that really has to subcontract everything.”

Whitefish responded by saying it has 300 contractors on the island.

“There can be no distraction that alters the commitment to lift the electrical system as quickly as possible,” Mr Rosselló said on Twitter.

He also confirmed that he is in discussions with New York Governor Andrew Cuomo and Florida Governor Rick Scott to have those states help re-build the power grid. Both states are home to a combined 40 per cent of the Puerto Rican population living in the US.

Nearly 70 per cent of the island’s 3 million residents still have no power after the 20 September hurricane made landfall.

Mr Rossello will also appoint a government official to work with the Puerto Rican power authority’s contracting division.

For its part, the Federal Emergency Management Agency said in a statement that: “”Based on initial review and information from PREPA, FEMA has significant concerns with how PREPA procured this contract and has not confirmed whether the contract prices are reasonable.”

Meanwhile, electric car manufacturer Tesla has begun a series of solar power projects on the island using panels and battery cells. The company recently restored power to a children’s hospital in San Juan that had been forced to use generators and ration its diesel fuel despite having several patients requiring care 24 hours a day.