Whitefish Energy accused of price gouging Puerto Rico

PREPA cancels Whitefish contract

Whitefish Energy Holdings, the Montana company that was contracted to repair Puerto Rico’s power grid following Hurricane Maria, is under investigation for overcharging the island’s state-run utility.

According to The New York Times, the contract awarded to Whitefish Energy by the Puerto Rico Electric Power Authority (PREPA), calls for charging the island an absurd rate of $319 an hour for the linemen currently working on restoring their power grid.

That amount far exceeds the $63 an hour they are actually paying senior linemen from Florida. Others are reportedly being paid as little as $42 an hour, with the difference going into the pockets of the Montana-based company.

Whitefish’s $300 million deal has already been canceled, but they remain working on the island until Nov. 30.  And while charging double time for emergency work is an industry standard, the $319 an hour rate is so abnormally high, federal officials have begun reviewing other contracts involving Puerto Rico.

There are also multiple congressional committees reviewing how a small and inexperienced company such as Whitefish was awarded such an important contract with such high prices.

Chris Chiames, a Whitefish spokesman, was quick to point out that the project was especially demanding, requiring them to overcharge the island nearly 800% for labor.

“Simply looking at the rate differential does not take into account Whitefish’s overhead costs. We have to pay a premium to entice the labor to come to Puerto Rico to work.”

The deal set off red flags after it was discovered the contract was signed only six days after Hurricane Maria struck, and had very little review before approval. In addition, Whitefish is based in Interior Secretary Ryan Zinke’s hometown of Whitefish, Montana, where he shares a comfortable relationship with their CEO, Andy Techmanski

Whitefish and PREPA have both publicly defended the deal and said there were no improprieties in the negotiation or approval of the contract.