Business
Small Montana Firm With Zinke Ties Wins $300M Puerto Rico Power Contract
By Maureen Fody, WN, 24 October 2017
Oct 25, 2017 - 11:18:43 AM

Whitefish Energy announced last week that they signed a $300 million contract with the Puerto Rico Electric Power Authority to repair and reconstruct large swaths of the island's electrical infrastructure in one of the largest contracts issued during the problematic relief efforts, according to The Washington Post.

But new investigations are uncovering that the company is only two-years-old and had only two full-time employees on the day that Hurricane Maria made landfall in the U.S. territory, with the company claiming that they have now 280 workers in the territory by using linemen subcontractors from across the country.

The power authority, PREPA, decided to hire Whitefish instead of the usual "mutual aid" arrangements that have typically helped areas hit by hurricanes recover quickly to restore power, but that decision is now facing scrutiny from Congress.

“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, said that the utility company is "completely content" with the work that Whitefish has done since arriving on the island and that, “The doubts that have been raised about Whitefish, from my point of view, are completely unfounded."

However many of the 3.4 million residents of Puerto Rico are still without power and there are growing concerns about how bankrupt Puerto Rico has been spending the relief money after the storm.

Whitefish officials said that their expertise at working in mountainous and remote areas made them suitable for the work and they jumped at the chance to work on the project while other firms were hesitant over not receiving payment until completion.

“We are taking personal risks and business risks working in perilous physical and financial conditions,” Spokesman Chris Chiames said. “So the carping by others is unfounded, and we stand by our work and our commitment to the people of Puerto Rico.”

Whitefish Energy is also based out of the hometown of the same name where Interior Secretary Ryan Zinke is from and that his son even "joined a friend who worked a summer job" at one of chief executive Andy Techmanski's construction sites.

Both Zinke and Techmanski said Zinke was not involved in securing the contract for working in Puerto Rico, with Techmanski explaining that the contract came from discussions between his company and the utility instead of a formal bidding process.

However, the immense scale of remaking Puerto Rico's power grid is larger than anything Whitefish Energy has previously done.

Previously the largest federal contract for the company was a $1.3 million contract to replace and upgrade portions of a 4.8-mile transmission line in Arizona in 11 months, but Puerto Rico has 2,400 miles of transmission lines across the island and 30,000 miles of distribution lines with 300 substations.

Still, 80 percent of customers in Puerto Rico are without power and a spokesman for the U.S. Army Corps of Engineers' power restoration task force guessed that around 80 percent of the grid was still damaged.

The House Committee on Natural Resources is currently investigating Whitefish's role in Puerto Rico, according to a spokesman for the committee Parish Braden, after the unique hiring was reported on by trade publications Utility Dive and E&E News.

“The size and unknown details of this contract raises numerous questions,” Braden said. “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.”

The contract also had the hourly rate set to $330 for a site supervisor, and at $227.88 for a "journeyman lineman," while the cost of subcontractors, who make up the most of Whitefish's workforce, is set to $462 per hour for a supervisor and $319.04 for a lineman.

Whitefish also charges a nightly accommodation fee of $332 per work and almost $80 per day for food.

PREPA did not guarantee the agreement with Whitefish until six days after the storm came through the island, unlike the Florida utility FPL which requested mutual aid before Hurricane Irma hit, which resulted in 20,000 restoration workers, including FPL employees, from 30 states and Canada being available to work the day after the storm.

FPL also said they had teams prepared to assess damage in Puerto Rico on Oct 1., posting notices on Facebook that said: "FPL is ready to help Puerto Rico."

But FPL never received a reply, and the American Public Power Association said that PREPA has not replied to offers of assistance from mutual-aid partners.

Technmanski said that the process "will take months, if not years, to repair the entire grid to full operational status" and was "among the worst that I have ever seen."

NBC Montana reported Techmanski saying that he had requested Zinke's assistance for getting personnel and equipment to the territory on Oct. 1, with Whitefish spokesman Chiames confirming the request.

Zinke’s office said: “The Secretary always politely listens when citizens and the small business community approach him with concerns and ideas. Neither the Secretary nor anyone in his office have taken any meetings or action on behalf of this company.”

Techmanski said that Whitefish was currently focusing on key transmission lines that needed helicopters and cranes to reach them in challenging work.

“Once we complete those, the effort’s going to move on to other transmission and distribution systems,” he said. “So we’re just ramping up and providing as many people as we possibly can.”