October 24, 2017 Read More →

Puerto Rico Electricity-Recovery Contract: $319-Per-Hour Line Workers

Washington Post:

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.

The company, Whitefish Energy, said last week that it had signed a $300 million contract with the Puerto Rico Electric Power Authority to repair and reconstruct large portions of the island’s electrical infrastructure. The contract is the biggest yet issued in the troubled relief effort.

Whitefish said Monday that it has 280 workers in the territory, using linemen from across the country, most of them as subcontractors, and that the number grows on average from 10 to 20 people a day. It said it was close to completing infrastructure work that will energize some of the key industrial facilities that are critical to restarting the local economy.

The power authority, also known as PREPA, opted to hire Whitefish rather than activate the “mutual aid” arrangements it has with other utilities. For many years, such agreements have helped U.S. utilities — including those in Florida and Texas recently — to recover quickly after natural disasters.

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.

“The fact that there are so many utilities with experience in this and a huge track record of helping each other out, it is at least odd why [the utility] would go to Whitefish,” said Susan F. Tierney, a former senior official at the Energy Department and state regulatory agencies. “I’m scratching my head wondering how it all adds up.”

The House Committee on Natural Resources is examining Whitefish’s role in Puerto Rico, said Parish Braden, a spokesman for the committee. The hiring of the little-known company has been noted by the trade publications Utility Dive and E&E News.

Under the contract, the hourly rate was set at $330 for a site supervisor, and at $227.88 for a “journeyman lineman.” The cost for subcontractors, which make up the bulk of Whitefish’s workforce, is $462 per hour for a supervisor and $319.04 for a lineman. Whitefish also charges nightly accommodation fees of $332 per worker and almost $80 per day for food.

Only eight contracts larger than $20 million have been approved for Puerto Rico by the Federal Emergency Management Agency and the Army Corps of Engineers, with half of those for shipments of food and bottled water. Whitefish’s contract surpasses the $240 million contract the Army Corps awarded to engineering giant Fluor to “augment ongoing efforts” to repair the power grid.

The commonwealth, strapped for funds before Hurricane Maria hit, is expected to run out of cash as early as the end of the month, according to people familiar with the island’s finances. And even if the Senate and the president approve the House’s $4.9 billion aid package for Puerto Rico, the island might need more money in as little as three months.

PREPA did not reach its agreement with Whitefish until Sept. 26, six days after the storm swept through. By comparison, the Florida utility FPL requested mutual aid before Hurricane Irma hit. The result was an army of nearly 20,000 restoration workers, including FPL employees, from 30 states and Canada at work on the first day.

On Oct. 1, FPL had teams assembled to assess damage in Puerto Rico. It posted notices in Spanish and English on its Facebook page: “FPL is ready to help Puerto Rico.” Florida Gov. Rick Scott mentioned the offer in a news release.

The Florida utility says it never received a reply. The Puerto Rican utility has not replied to offers of assistance from mutual-aid partners, according to the American Public Power Association, which coordinates such operations.

More:  Small Montana firm lands Puerto Rico’s biggest contract to get the power back on

Comments are closed.