In the midst of the disaster in Puerto Rico, it appears that someone may have engaged in graft as large as the hurricane that hit the island. Like other electrical utilities, the state-owned Puerto Rico Electric Power Authority has multiple mutual-aid agreements with other utilities. It can call on these agreements for help in repairing the power grid in an emergency. These are the same kind of arrangements that allowed utilities in Florida to get power there restored so quickly following the passage of Irma. But even though 79 percent of the island remains without power, PREPA isn’t calling on those agreements.
A constellation of companies, including those controlled by Tesla’s Elon Musk, have offered to work with Puerto Rico to transform the island into a model for the nation using a series of micro-grids, distributed solar, and local storage. The resulting system would be clean, flexible, and resistant to large-scale failure. But, so far at least, none of those companies have the nod to proceed.
For the sprawling effort to restore Puerto Rico’s crippled electrical grid, the territory’s state-owned utility has turned to a two-year-old company from Montana that had just two full-time employees on the day Hurricane Maria made landfall.
A company with no equipment, no experience, and no employees landed the job of restoring an electrical grid for an island of three and a half million Americans because … honestly, no one knows the answer. But they’re looking:
The unusual decision to instead hire a tiny for-profit company is drawing scrutiny from Congress and comes amid concerns about bankrupt Puerto Rico’s spending as it seeks to provide relief to its 3.4 million residents, the great majority of whom remain without power a month after the storm.
So far there seems to be only one clue: The two-person firm is headquartered in Whitefish, Montana. Which happens to be the hometown of Interior Secretary Ryan Zinke.
Zinke is claiming no role in Whitefish’s selection. And Whitefish is claiming they got the job because of experience …
Whitefish officials have said that the company’s expertise in mountainous areas makes it well suited for the work and that it jumped at the chance when other firms were hesitating over concerns about payment. The company acknowledges it had only two full-time employees when Maria struck but says its business model calls for ramping up rapidly by hiring workers on short-term contracts.
But whatever “experience” Whitefish may have is entirely with the linemen that it’s been hiring at a rate of 10 to 20 per week since landing the contract. Whitefish Energy isn’t a utility firm, it’s just a hiring desk located over three thousand miles from the place where the workers are needed.
With Puerto Rico’s finances in tatters and the electrical grid shattered, why not call on the existing aid agreements? And why drop a mound of money on a firm that hasn’t responded to a hurricane, hasn’t worked in Puerto Rico, and actually has zero experience in repairing a failed electrical grid.
PREPA’s executive director, Ricardo Ramos, and a spokesman did not respond to emails asking why the utility didn’t activate the mutual-aid network. On a tour of the idled Palo Seco power plant, Ramos told reporters that Whitefish was the first company “available to arrive and they were the ones that first accepted terms and conditions for PREPA.”
The continuing outage in Puerto Rico isn’t just inconvenient, it’s life-threatening, especially since even those parts of the island where running water has been restored are under a boil order. Before getting this contract, Whitefish’s largest contract was to install a single electrical line less than five miles long. They had a year to do it.
Puerto Rico has 2,400 miles of transmission lines across the island, and 30,000 miles of distribution lines with 300 substations.