Facing scrutiny, Country to cancel plum power restoration contract

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October 30, 2017 12:21 AM

Puerto Rico is scrapping a deal with a tiny American firm that fell under intense scrutiny after it nabbed a lucrative contract to restore electricity to the storm-ravaged island.

Ricardo Ramos -- executive director of the Puerto Rico Electric Power Authority, or PREPA -- announced the decision to journalists just hours after the US territory's governor urged the cancellation of the deal with the Montana-based Whitefish Energy Holdings, as controversy mounted over how it was struck.

Whitefish Energy had won a $300-million contract to help turn the lights back on in Puerto Rico, where some 80 percent of customers still lack power more than a month after Hurricane Maria ripped through the island home to some 3.4 million people.

The small company, which reportedly had just two employees prior to starting work on the island, was founded two years ago and is based in the hometown of both the US Interior Secretary Ryan Zinke and the company's CEO -- arousing suspicions that the Donald Trump administration could have wielded influence.

Ramos emphasized the deal's cancellation "was not an easy decision" and that there was "nothing illegal" in the contracting process.

He dubbed the controversy over the deal "an enormous distraction," saying it "was negatively impacting the work we're doing."

The company's work already under way in Puerto Rico will not be affected, he said, saying the cancellation will not be official until the utility's board approves it, and then it will take effect 30 days later.

Facing scrutiny island authorities and the company itself had hurried to defend the decision, saying Whitefish Energy had not asked for an advance as other companies had.

But given the scale of the destruction, it came as a surprise that a small company received such a crucial contract -- particularly as it did not include bilateral cooperation arrangements such as those seen after Hurricane Harvey hit Texas.

Zinke on Friday issued a statement saying he "had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico," saying "I welcome all investigations into these allegations."

"Neither myself nor anyone in my office has advocated for this company in any way," he said, though he did note the company had contacted him "after the initial contract was awarded."

Governor Ricardo Rossello took to Twitter Sunday to call for more detailed scrutiny of contracting processes and said he had referred the Whitefish Energy case to the office of the comptroller for investigation.

"I have given instructions so that things move forward with the cooperation of the states of Florida and New York, so that brigades and teams arrive" to get power back, he added.

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