November 14, 2017 / 7:53 PM / a year ago

Puerto Rico utility defends decision to postpone mutual aid

Nov 14 (Reuters) - Puerto Rico’s electric utility on Tuesday defended its decision not to seek mutual aid from mainland utilities immediately following Hurricane Maria in a contentious hearing with the U.S. Senate’s energy and natural resources committee.

“I cannot overstate the extraordinary challenges that we have faced,” said Ricardo Ramos, director of the Puerto Rico Electric Power Authority (PREPA).

The decision by PREPA to instead retain contractor Whitefish Energy Holdings LLC to help restore electricity after the storm drew sharp criticism during the three-hour hearing.

About 49 percent of the island’s power has been restored nearly two months after Hurricane Maria devastated the grid on Sept. 20, Ramos said.

PREPA lacked the logistical resources to seek mutual assistance from other utilities immediately after the devastating storm, Ramos said, responding to pointed questions from the committee chair, Senator Lisa Murkowski, and ranking member Senator Maria Cantwell.

Cantwell countered that utilities were eager to come to Puerto Rico’s aid at cost, rather than charging the inflated prices that Whitefish required. If logistical challenges had been raised with mainland utilities, they would have overcome the hurdles, she said.

“The notion someone comes in to gouge the Puerto Rico government and U.S. taxpayer, charging them exorbitant rates, than writing a contract so it can’t be reviewed properly, was a great injustice to the U.S. taxpayer,” Cantwell said.

In response to questions, Ramos said he did not know of any kickbacks paid by Whitefish.

But Ramos maintained that PREPA was unable to participate in mutual aid agreements after the storm.

“After the devastation of Hurricane Maria I believed that PREPA was unable to meet the requirements for mutual assistance,” Ramos said.

The utility required contractors who could provide self-contained “military-style” units, he said because it lacked water, ice, housing and fuel for trucks.

PREPA turned to Whitefish after considering five other offers to help restore power, said Ramos.

However, PREPA canceled the Whitefish contract just over a month after agreeing to pay the tiny Montana company $300 million to restore power to the storm-hit U.S. territory. The cancellation followed criticism that the contract blocked sufficient oversight of costs and profits.

“I immediately called for the cancellation of the Whitefish contract,” Puerto Rico’s Governor Ricardo Rossello told the committee on Tuesday, adding investigations into the Whitefish contract are ongoing.

“As we start rebuilding, we are working with the White House and OMB (the Office of Management and Budget) for transparency,” he said. (Reporting by Jessica Resnick-Ault; editing by Daniel Bases and G Crosse)

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