Weather and Natural Disasters

Puerto Rico will lean on New York, Florida for help restoring its grid after scrapping of Whitefish deal

Key Points
  • After terminating a controversial deal with Whitefish Energy, Puerto Rico will have lots of assistance from New York and Florida getting its grid working
  • About a month after Hurricane Maria devastated the island, nearly 70% of residents are still without basic electricity.
A woman looks at the damages in the neighbour's house after the area was hit by Hurricane Maria in Salinas, Puerto Rico, September 21, 2017.
Carlos Garcia Rawlins | Reuters

After days of pointed questions and mounting ouctry, the head of Puerto Rico's beleaguered power utility announced on Sunday that it had put an end to a contract it granted to Whitefish Energy, which was worth up to $300 million.

The small, virtually unknown Montana based company landed the heavily scrutinized deal to aid in the restoration of power on the island of Puerto Rico following Hurricane Maria's total destruction of the power grid.

"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," Whitefish said in a statement issued on Sunday.

"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 company added.

The Whitefish contract with PREPA—which has $9 billion in outstanding debt and officially entered into a bankruptcy-like preceding in July—sparked outrage among members of U.S. Congress, several of whom called for an investigation into the bidding process.

It set off alarm bells among government watchdogs, FEMA and other parts of the Trump administration, which in recent days was forced to distance itself from the increasingly controversial bid.

The power station Central San Juan of Puerto Rico Electric Power Authority (PREPA) is seen in San Juan.
Alvin Baez-Hernandez | Reuters

However, where does that leave the cash-strapped island as it struggles to recover from the devastation of Maria?

Ricardo Ramos, the CEO of Puerto Rico Electric Power Authority (PREPA) noted that cancelling the contract may set back power restoration efforts an additional 10 to 12 weeks. Maria, a powerful category 4 storm, made landfall on Puerto Rico more than a month ago, and still more than 70 percent of the island's 3.4 million residents are without power.

Earlier on Sunday, Gov. Ricardo Rossello announced plans to appoint an administrator from the Puerto Rico Fiscal Agency and Financial Advisory Authority to oversee the Purchasing and Supplies Division of PREPA.

In order to make up for the reduction of power brigades caused by the cancellation of the Whitefish deal, Rosselllo initiated a process of requesting "mutual aid agreements" with the states of Florida and New York.

"The goals I established are aimed at achieving 30 percent of the power generation capacity. These goals are aggressive and require the collaboration of all to be able to have over 1,000 brigades in Puerto Rico by November 8," Rosello said.

"At the moment, PREPA and its contractors have 404 brigades working on the island, while the USACE [U.S. Army Corps of Engineers] has seven," Gov. Rossello said.

New York Governor Andrew Cuomo.
Getty Images

'It all starts with power'

New York Governor Andrew Cuomo has been largely involved in relief efforts for the island—organizing a statewide donation effort in coordination with the National Guard, as well as arranging multiple private relief efforts.

During an appearance on CNN, Cuomo said he would deploy utility crews and equipment to help the Commonwealth, and help jump-start the repairs. The lack of power has left Puerto Ricans struggling to cope without basic necessities like food and water.

"It all starts with power. If you don't have power, pumps don't operate, people can't operate equipment to clean their home," Cuomo told CNN. "So, it's very hard to get the society up and running until you have the power restored. And there's been very little progress on the power."

New York Power Authority sent crew members to Puerto Rico on the first relief flight that Cuomo had arranged. Those employees were embedded within PREPA to help fully assess the damages to the grid, including conditions at hundreds of power substations across the island.

To further help with relief efforts, Cuomo organized a 28 person tactical power restoration team consisting of engineers and supervisors that specialize in the supervision of transmission and distribution system recovery. Also, they will assist in ongoing efforts to address the island's power crisis, and help restore the decimated power grid.

Those workers, pulled from various utility companies across New York State, will be deployed in early November, in teams to seven regions throughout Puerto Rico. In addition, a separate 15 member unit of specialized contract accountants to help expedite FEMA filings and reimbursements, will also be mobilized.

WATCH:  Puerto Rico scraps contract with Whitefish Energy

Puerto Rico scraps contract with Whitefish Energy
Puerto Rico scraps contract with Whitefish Energy