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Puerto Rico Scraps $300M Power Grid Deal With Whitefish Energy

The Puerto Rico Electric Power Authority (PREPA) will cancel a US$300-million deal with Montana-based Whitefish Energy for restoring the power after Hurricane Maria hit the island, following criticism over the way the tiny Montana firm obtained the contract.

The deal has been criticized by Puerto Rican officials and U.S. federal authorities after details emerged that the terms of the deal had not been obtained through competitive public bidding.

Puerto Rico’s Governor, Ricardo Rosselló, asked on Sunday the electricity authority to cancel the contract with Whitefish Energy.

“Following the information that has emerged, and with the goal of protecting public interest, as governor I am asking government and energy authorities to immediately activate the clause to cancel the contract to Whitefish Energy,” Rossello said in a statement, as carried by Reuters.

Ricardo Ramos, director of PREPA, said later on Sunday that he had accepted the recommendation of Governor Rosselló to cancel the deal.

On Saturday, Govenor Rosselló had requested the Office of the Comptroller to investigate and audit the contracting process of Whitefish by PREPA.

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According to PREPA’s Ramos, the terms of the contract stipulate that the cancellation of the contract with Whitefish become effective 30 days after notice.

Following the move by Puerto Rico to cancel the contract, Whitefish Energy said in a statement on Sunday:

“We are very disappointed in the decision by Governor Rosselló to ask PREPA to cancel the contract which led to PREPA’s announcement this afternoon. 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. We will certainly finish any work that PREPA wants us to complete and stand by our commitments knowing that we made an important contribution to the restoration of the power grid since our arrival on the island on October 2.”  

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Not even one day after Puerto Rico's canceled its controversial $300 million contract with Whitefish Energy, the WSJ is reporting that the FBI is now looking into the circumstances surrounding the contract.

By Tsvetana Paraskova for Oilprice.com

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