About five weeks after Hurricane Maria ravaged the island of Puerto Rico, knocking out power to the island’s 3.4 million residents, members of Congress and the media are asking tough questions about a contract given out to restore power to the island.
According to reporting in trade publications as well as the Washington Post, a massive $300 million contract to help turn the lights back on in Puerto Rico went to a Montana-based company with just two employees.
The company, Whitefish Energy Holdings, happens to be based in the hometown of Ryan Zinke, President Trump’s Interior Secretary and a former congressman.
Zinke is already under fire for his use of private aircraft for official travel and political activities while in office. His son worked for Whitefish Energy for one summer, the Post reported, but the secretary himself has denied any role in the deal.
“Neither the secretary nor anyone in his office have taken any meetings or action on behalf of this company,” the department told the Post in a statement.
The department did admit that Zinke knows Whitefish’s CEO, but said it’s “because they both live in a small town where everyone knows everyone,” the Post reported.
USA Today reported on Wednesday that a Whitefish spokesman also denied that Zinke facilitated the deal. Whitefish spokesman Ken Luce told the paper that Zinke’s relationship with Whitefish’s CEO, “had nothing whatsoever to do with the contract.”
Zinke, who has earned the ire of environmental groups by moving to open up public lands to oil and gas drilling, among other policies, may not come away from this unscathed, however.
The urgent need for help
Puerto Rico remains in dire need of aid, particularly when it comes to bringing back electricity to the entire island. As of Wednesday, about 5 weeks since Category 4 Hurricane Maria barreled into the island, 75 percent of Puerto Rico’s residents still lack electricity access.
While Tesla is establishing solar and battery storage microgrids at hospitals, and solar companies like Sunrun are bringing their panels to the island as well, the critical task of rebuilding the island’s grid is far more daunting. The storm’s ferocious winds, clocked at greater than 140 miles per hour, destroyed power lines as well as power plants and transformers, requiring a multi-pronged effort.
A girl plays in the aftermath of Hurricane Maria, at the neighborhood Obrero of Santurce district, in San Juan, Puerto Rico, Oct. 6, 2017.
Image: THAIS LLORCA/EPA-EFE/REX/Shutterstock
That’s where this bizarre, suspicious contract with Whitefish Energy comes in, since to many observers it appears that a company that may not be able to accomplish the job, and may only have received the contract by using political connections.
On Wednesday, more members of Congress began asking questions about the deal, with Alaska Senator Lisa Murkowski, who chairs the Senate Energy and Natural Resources Committee, saying she may look into the matter.
“We’re trying to find out a little bit more… we need to figure out what’s going with it here,” she told a producer for NBC News.
In addition to Murkowski, the chairman and ranking Democrat on the House Resources Committee said a congressional review is warranted, and Senator Maria Cantwell of Washington State has requested that the Government Accountability Office look into the contract as well.
Why this contract is so weird
Typically, after major disasters like this one, state utilities activate a mutual assistance program, which triggers aid from power suppliers in other states.
However, the power authority in Puerto Rico, known as PREPA, did not take this step because it lacks the financial resources to pay those utilities back for their work. The territory itself is deeply in debt, and PREPA only has a $100 million emergency fund, which it’s drawing from to keep running, according to E&E News.
Whitefish said Monday that despite its small size in Montana, it has subcontracted nearly 300 people in Puerto Rico to help build new power lines, among other urgent tasks.
The company also told the Post that previous work it’s done in the American West prepares it for the work in Puerto Rico, even though the task in Puerto Rico is far more expansive.
The Post reported:
Kent McNellie, an investment professional at HBC, the Texas investment firm that is now the largest financier of Whitefish, said the company’s experience reconstructing a one-mile power line destroyed in a wildfire in Washington state was more relevant to Puerto Rico’s needs than is the experience of many companies on the mainland. The span in Washington included an elevation change of about 5,000 feet, and the terrain required crews and equipment to be delivered by helicopter.
“Most guys go up in a 30-foot bucket truck, and they can do that from Texas to New York, but you don’t need an army of bucket trucks,” McNellie said. “Andy realized you had a transmission problem and that requires 90-foot buckets, 100-foot ladders and helicopters — that’s not the typical crew you can get through mutual aid.”
According to CBS News reporter David Begnaud, Puerto Rico’s governor defended the Whitefish contract by saying the company did not require much money up front, which was a priority for the cash-strapped island government.
The Puerto Rican government is also reviewing the deal, while Whitefish’s work continues.
What to watch for next
Congressional hearings on this contract may be announced if political pressure continues to grow, especially since advocacy groups, such as the Sierra Club, see Zinke as potentially vulnerable. Through hearings or investigative reporting, or more likely, both, it will be interesting to see whether clearer ties between Secretary Zinke and Whitefish Energy emerge, especially now that the Trump administration has already jettisoned one cabinet member with a distracting scandal.