National Association of Government Contractors

Legislators Have Questions on Whitefish Contract

Following cancellation of a $300 million contract with utility provider Whitefish Energy Holdings to help rebuild a portion of Puerto Rico's crippled electrical grid in the wake of Hurricane Maria, a GOP legislator has more questions for Puerto Rican authorities about their controversial hurricane recovery contract with the small Montana energy firm.

Rep. Rob Bishop (R-Utah) said documents provided to his House Natural Resources Committee last week raised fresh concerns about the island’s $300 million contract with Whitefish Energy. Officials rescinded that deal amid questions from lawmakers and government watchdogs.

"There are some other circumstances within those documents that add more questions, which means at some point I would like those to be answered, and someone needs to look at that," Bishop said during a hearing on Hurricane Maria recovery efforts Tuesday. He didn't expand on what questions the documents raised.

Bishop’s committee was due to hear Tuesday from Ricardo Ramos, the executive director of the state-run Puerto Rico Electric Power Authority (PREPA). But Ramos didn’t attend the hearing, with PREPA saying in a letter that "he is unable to participate in the scheduled hearing due to urgent efforts on the ongoing emergency restoration" to bring power back to the island.

PREPA entered into the $300 million contract with Whitefish in September. But the size and scope of the contract drew bipartisan backlash last month, leading the territory’s government to cancel the deal. Rep. Raúl Grijalva (D-Ariz.) on Tuesday called it a "sweetheart deal to a fly-by-night company."

Tuesday’s hearing gave federal oversight officials the chance to defend their appointment of an emergency "chief transformation officer" to oversee PREPA.

The oversight board intends for the manager, Noel Zamot, to oversee both electric grid restoration work following Maria and an overhaul of PREPA’s finances. Zamot told the committee on Tuesday that he wants to turn PREPA into a utility "that provides stable, reliable and cost effective power to Puerto Rico and becomes an engine of economic growth."

But PREPA and the Puerto Rican government have challenged Zamot’s appointment in court, questioning the oversight board’s ability to install an emergency manager.

Natalie Jaresko, the executive director of the Financial Oversight and Management Board, said federal law and "fundamental aspects of bankruptcy law give us the power and responsibility to do what we’ve done."

But she suggested that, "to avoid uncertainty and lengthy delays in litigation, congressional reaffirmation of our exercise of our authority is welcome."

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