October 30, 2017 / 11:15 PM / a year ago

Puerto Rico's path to restore power shifts after Whitefish exit

NEW YORK, Oct 30 (Reuters) - Efforts to restore electricity to Puerto Rico nearly six weeks after Hurricane Maria are shifting as the island’s utility and its regulators, along with U.S. authorities, removed a key contractor Sunday and moved to triple the funding of another.

The U.S. Army Corps of Engineers, which is in charge of the federal power restoration effort, is looking to boost the size of a key contract awarded to Fluor Corp by $600 million to $840 million, according to a government filing.

The Army Corps, in its filing, said that it was modifying the size of the contract to ensure “continued execution of the critical repair and restoration of the electric power grid in Puerto Rico.”

It comes one day after Puerto Rico’s Governor Ricardo Rossello, and the Puerto Rico Electric Power Authority (PREPA) on Sunday moved to cancel a $300 million contract with Whitefish, a tiny Montana company after an uproar over the deal’s provisions and the firm’s lack of experience with projects of this size.

Fluor, which declined comment, was already in the process of bringing people to the island to help restore transmission and distribution of power to the territory, which was hammered by Hurricane Maria. The storm knocked out power to all 3.4 million residents and only about 30 percent of power has been restored nearly six weeks later.

The contract with Fluor signals a transition to Fluor as the primary contractor on the island. The Army Corps was placed in charge of restoring power to the island about a week after the storm, though they did not negotiate the Whitefish contract.

The contract between Whitefish and PREPA came under fire after it was revealed last week that the terms were obtained without a competitive public bidding process. Residents, local officials and U.S. federal authorities all criticized the arrangement.

Conflict over who should lead the process of restoration has hampered efforts. PREPA, the island’s bankrupt power utility, and Governor Rossello have argued that the utility should maintain control, while a fiscal control board created by U.S. Congress last year to restructure the island’s finances has also jockeyed for control.

“PREPA and the governor of Puerto Rico and the administration here need to make a decision on who is in charge of PREPA,” said Ariel Horowitz of Synapse Energy Economics, a consultant to Puerto Rico’s energy regulator.

Puerto Rico’s energy commission, a small regulatory board tasked with overseeing PREPA, has the option of assigning an independent advisor to monitor progress in restoring the grid, but has not done so yet.

Currently, there are about 400 subcontracting crews on the island working to bring back power, but only about 30 percent of homes and businesses have been restored. Rossello said he wants to have 1,000 crews by Nov. 8, leaning on so-called mutual aid from utilities in New York and Florida, which have crews on the island.

Getting assistance from other utilities, who usually help one another after storms, may continue to be complicated by the territory’s isolation and lack of investment in its system.

A private sector source, who could not be named, said that the transition from Whitefish, should it be handled smoothly, will hopefully accelerate the restoration of power. He said PREPA’S goal of restoring 95 percent of power by mid-December – a full three months after the hurricane – is slow for a typical utility.

PREPA did not respond to a request for comment.


The restoration has been proceeding in fits and starts. About three weeks after Maria, only 17 percent of homes and businesses had gotten power back, but that figure dropped to 10 percent a few days later after a key San Juan power station went down.

Still, questions remain over what Whitefish has accomplished. Whitefish said it has completed significant work on two major transmission lines that crossed over the mountains of Puerto Rico.

A person familiar with PREPA’s operations said on Monday Whitefish would complete work on critical lines despite the cancellation of the contract.

There were several other utilities on the island working to restore power, as well as private contractors that include Southern Co’s PowerSecure unit and Fluor, both of which were hired two weeks ago by the Army Corps.

An Army Corps spokesman said the Corps is not currently planning on hiring those reporting to Whitefish, but the other subcontractors might.

Officials at Fluor would not comment on hiring any of Whitefish’s subcontractors. A spokesman at Southern could not immediately comment on the possible hiring of Whitefish contractors.

JEA, the municipal utility for Jacksonville, Florida, said it would keep its crew of about 40 people on the island, even if it no longer reports to Whitefish. (Reporting By Jessica Resnick-Ault and Nick Brown; additional reporting by Scott DiSavino; editing by David Gaffen and Diane Craft)

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