Puerto Rico Cancels Controversial Contract With Whitefish Energy

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MIAMI (CBSMiami) — Puerto Rico is cancelling a controversial $300-million contract with Whitefish Energy to restore power to the hurricane ravaged island. The head of Puerto Rico’s power company, PREPA, estimates the cancellation will delay power restoration by 10 to 12 weeks.

“It’s interfering with everything and it doesn’t go towards the best interests of the people of Puerto Rico,” said Puerto Rico Governor Ricardo Rossello who is praising PREPA’s decision to cancel a contract with Whitefish Energy.

San Juan Mayor Carmen Yulin Cruz, one of the contract’s earliest and fiercest critics, says it needs to be voided entirely.

“The people of Puerto Rico would still have to pay something called a reasonable profit, on top of everything they’ve already been charged,” said Yulin Cruz.

The outcry began after revelations that a $300 million no-bid contract to repair Puerto Rico’s devastated power grid had been awarded to Whitefish Energy, a two-person operation based in Interior Secretary Ryan Zinkie’s Montana hometown.

Zinke has said he had nothing to do with the contract.

CBS News correspondent David Begnaud traveled to Whitefish, Montana looking for the corporate headquarters.

He found it nestled down a long gravel driveway in a remote area of northwestern Montana. It’s a one-story two-bedroom wooden home that looks like a private residence, according to Begnaud.

After signing the deal, Whitefish hired 350 workers and the company says it was moving more than 500 lineman to the island this week.

The head of PREPA, Ricardo Ramos, has defended the 300-million dollar deal and Sunday emphasized there was nothing illegal about it.

In a statement Whitefish said, “The decision will only delay what the people of Puerto Rico want and deserve – to have the power restored quickly in the same manner their fellow citizens on the mainland experience after a natural disaster.”

The contract with PREPA marked the largest contract to be awarded since recovery efforts began more than a month ago.

“There can be no distraction whatsoever that alters our course of action so we can elevate and restore our energy system in Puerto Rico,” said Gov. Rossello.

The deal between Whitefish Energy and PREPA is currently being audited at the local and federal level.

At least two legislators in Congress are pushing for an investigation into the contract.

To help ensure transparency going forward, Rossello said that he will appoint a finance official to PREPA who will oversee the contracting process. He also asked Puerto Rico’s Office of the Comptroller to conduct a review of how the emergency contract was awarded.

In the meantime, Rosselló said his team is working with the governors of Florida and New York to bring energy workers from those states to help Puerto Rico as quickly as possible.

Puerto Rico’s already frail power infrastructure was all but destroyed after Maria tore through the island. As of Sunday, only about 30% of Puerto Rico’s power generators were back online, according to PREPA data.

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