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Puerto Rico Cancels $300m Power Grid Contract With 2 Employee Montana Energy Firm After Media Scrutiny

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After the controversy surrounding a decision to provide a $300 million contract to a small energy firm reached a fever pitch, the state-run electric company announced on Sunday that the deal will be immediately canceled. The decision was announced by Richard Ramos, the executive director of the island’s energy authority, during a press conference.

As reported by The Hill, Whitefish Energy, the small Montana-based firm, was subjected to a significant amount of scrutiny after being awarded the $300 million contract to repair the ailing Puerto Rico Electric Power Authority (PREPA) grid.

Prior to being named as the company selected to address the issues in Puerto Rico’s power grid, the firm only had two full-time employees.

The deal was cut on September 26, just days after Hurricane Maria descended on the island, doing significant amounts of damage to the electrical grid. Puerto Rico has been largely without power for over a month.

Critics of the arrangement argued that Whitefish didn’t have the necessary experience to manage a project of that scale and pointed out that the deal was based on a non-competitive bidding process.

Whitefish asserted that its experience operating in the mountainous terrain of Montana qualified them for the project.

Additional reports questioned the decision based on the fact that Whitefish is located in Interior Secretary Ryan Zinke’s hometown, though Zinke stated he had no contact with the energy firm prior to the PREPA contract being awarded.

FEMA also asserted that the decision to assign the contract to Whitefish was a decision made solely by PREPA and that the federal agency was not involved, even though the contract guaranteed that the agency had “reviewed and approved” the arrangement.

The agency had also released a statement saying FEMA was investigating whether PREPA and Whitefish Energy “followed applicable regulations to ensure that federal money is properly spent” and that they had “significant concerns” regarding the procurement process used, including “whether the contract prices [were] reasonable.”

Concerns about the contract led to two congressional investigations as well as a Department of Homeland Security inspector general audit. A review by the Puerto Rican government also occurred.

As of Sunday afternoon, approximately 30 percent of Puerto Rico had electricity.