Dive Brief:
- Whitefish Energy has sued Arc American, a contractor which had asked the Puerto Rico Electric Power Authority for payment for work it completed to repair the island's devastated electrical grid rather than collecting through Whitefish.
- The lawsuit is the latest twist in a story that grew out of the damage done to Puerto Rico by Hurricane Maria. The $300 million contract PREPA signed with Whitefish has since been cancelled and is under investigation.
- Meanwhile, repair of Puerto Rico's electric grid is slowly continuing. Since the storm struck in September, destroying its distribution grid, the island has restored 68.4% of generation as of yesterday morning.
Dive Insight:
According to Associated Press, Whitefish Energy is accusing Arc American of essentially cutting in line by attempting to collect payment for work it completed directly from the utility.
The lawsuit, filed in Montana court, will be heard by District Judge Dana Christensen. Whitefish wants the court to direct Arc to withdraw its request for funds at PREPA.
Whitefish's work in Puerto Rico was slated to end at the end of November, and the $300 million contract has since been terminated. But last month Whitefish halted and then restarted work over payment disputes. The company resumed work repairing Puerto Rico's electric grid after receiving what it called a "good faith" payment from the island's electric utility for work it completed in October.
It is unclear if payment for services will continue to be an issue going forward, as some of those funds in arrears could get caught up in PREPA's bankruptcy. The utility holds about $9 billion in debt.
In the chaos surrounding Hurricane Maria, 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 widespread criticism.
The company billed $319/hour for linemen 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."
