Dive Brief:
- Whitefish Energy Holdings says Puerto Rico's embattled electric utility still owes it more than $100 million, and the Montana-based firm has asked the island's U.S. District Court to help it collect.
- The firm has asked the court to halt payments to advisors to the Puerto Rico Electric Power Authority (PREPA), until they have assisted in getting reimbursement for the utility from the Federal Emergency Management Agency.
- PREPA selected Whitefish Energy to help rebuild its grid in the aftermath of Hurricane Maria, but the controversial $300 million contract was later canceled after coming under intense scrutiny.
Dive Insight:
Whitefish's contract with PREPA, which the utility initially signed rather than requesting mutual aid from other electric companies, eventually fell apart when it came under scrutiny. Some hourly rates were considered far too high, and clauses protecting the company from having its work scrutinized didn't pass public muster. The company did assemble a large crew on the island and complete some work, but it has had trouble collecting what it is owed.
Last year, Whitefish Energy sued Arc American, a contractor which had asked PREPA for payment for work it completed rather than collecting through Whitefish. Whitefish argued the contractor was attempting to cut the line and collect directly from the utility. Now Whitefish has thrust itself into a fee application proceeding brought by a firm assisting PREPA.
According to Whitefish, the company has submitted a request to PREPA for $141 million for mobilization, work completed and demobilization. But Whitefish says a fee application submitted by Filsinger Energy Partners, the company helping manage PREPA's finances, shows that it has not done enough to help the utility get funding from FEMA to pay its debts.
"Submission of the WEH invoices to FEMA will eliminate this $100+ million claim from the PREPA estate and should be done timely," the energy company said in a filing.
The application, submitted in March, seeks more than $2.3 million for Filsinger's services. But Whitefish says "it is now apparent from the fee application that Filsinger is not devoting the resources that are even minimally necessary to complete the FEMA submission of WEH's invoices." The company argues that the fee application should be put on hold until invoices are filed.
PREPA contracted with Whitefish in the midst of the chaos surrounding Hurricane Maria to repair the ruined electric 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.
Whitefish 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."
PREPA announced in October that the public utility would cancel the power restoration contract with Whitefish Energy following widespread criticism over the agreement's terms and the utility's contracting process.
