The Puerto Rican power utility approved higher rates of pay and costs than are normal for the $300 million Whitefish contract, according to a summary of documents released by the House Natural Resources Committee ahead of a Tuesday hearing.
Committee Chairman Rob Bishop, R-Utah, said 2,000 pages of documents related to the Puerto Rico Electric Power Authority's handling of the no-bid contract show PREPA has a “competence deficit” that necessitates federal oversight over contracts. The committee had requested the documents.
“A legacy of dysfunction [at PREPA] has created a competence deficit that threatens the island’s ability to improve conditions for its citizens. Confidence in the utility’s ability to manage contracts and time-sensitive disaster-related infrastructure work is long gone,” Bishop said.
PREPA and Whitefish agreed to a contract Sept. 26 and an expanded contract Oct. 17.
The utility approved the second contract despite objections from its own lawyers, who worried it offered few protections. The Federal Emergency Management Agency also expressed concern about provisions of the contract.
The committee said the standard hourly labor rates in both contracts were “exorbitant.”
Committee investigators noted that PREPA and Whitefish encountered “major shipping problems,” prompting delays that forced the power utility to approve charter jets at higher costs to transport cargo.
Whitefish also unsuccessfully sought to obtain exemptions from Puerto Rican taxes and labor laws, the committee said, and offered to provide a generator for the family of one of PREPA’s executives.
Whitefish defended its work to the Washington Examiner.
“Whitefish Energy continues to make progress on our assigned work to restore electrical transmission infrastructure on Puerto Rico and our team of more than 500 workers remains fully committed to this mission,” said a spokesman for the company, which will continue repairing power lines until Nov. 30. “We also remain committed to addressing any questions from Congress and are confident that the work we’ve accomplished to date and will complete over the coming weeks has made a difference and provided PREPA and the Army Corps [of Engineers] a solid foundation as they move forward.”