Dive Brief:
- The head of Puerto Rico's embattled electric utility, Ricardo Ramos, has resigned following intense scrutiny over a contract signed with Montana-based Whitefish Energy to repair and rebuild the island's electric grid.
- The news comes just days after Ramos, executive director of the Puerto Rico Electric Power Agency, answered questions about the contract's negotiation before the U.S. Senate Energy and Natural Resources Committee.
- Days after Hurricane Maria devastated the island, PREPA contracted with Whitefish to repair the grid rather than utilizing mutual aid agreements with other utilities. As terms of the $300 million contract came to light, it set off a firestorm of criticism that resulted in the deal being canceled and has now led to Ramos' ouster.
Dive Insight:
It's been two months since Hurricane Maria made landfall, but in some ways the storm has not subsided. The island still only has less than half of its generation online and today the head of its electric utility stepped down amid fierce criticism over the slow recovery and its deal with Whitefish.
Details are still scarce, but NBC News reports a statement should be forthcoming form PREPA later on, and it is not yet known if Ramos will remain in his position until a successor is found.
Ramos appeared before a Senate committee on Tuesday, and told lawmakers the utility contracted with Whitefish because he believed PREPA was "unable to meet requirements" for mutual assistance with the American Public Power Association. Those requirements include points such as providing fuel, housing and communications; however, emails released by the House Natural Resources Committee show that PREPA purchasing managers did not follow advice from their lawyers in signing the Whitefish contract.
The contract remains the subject of a federal law enforcement probe.
In addition to eschewing mutual aid, the contract was not competitively bid, contained provisions limiting oversight and recourse, and specified hourly wages and expenses for linemen far in excess of what is typical on the island. To boot, much of those wages were not going to the workers.
The company billed $319/hour for their services, but paid them between $42/hour and $100/hour. The contract also included a passage ensuring that, "in no event shall [government bodies] have the right to audit or review the cost and profit elements."
Both Puerto Rico and its utility are mired in debt, and the storm recovery story has merged into one of mismanagement.
Puerto Rico Gov. Rosselló requested $94 billion in disaster aid from Congress, but pushed lawmakers not to exercise more federal control over the territory's decision making. PREPA and Puerto Rico's federal oversight board will work together to reform the utility, which could include partial or entire privatization, he said. On Monday, a judge rejected a move from the federal oversight board that manages Puerto Rico's finances to appoint a "chief transformation officer" to direct the grid rebuild.
Ramos' departure is not the only one. The head of the Puerto Rico Emergency Management Agency resigned last week amid the recovery efforts. PREMA Commissioner Abner Gómez in a statement acknowledged the slow recovery efforts; government officials had indicated in the last two weeks that he was "exhausted" and had been on vacation.
