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Puerto Rico Power Authority Moves to Cancel Whitefish Contract After Plea From Governor

Puerto Rico’s governor had called for the immediate cancellation of a controversial contract with Whitefish Energy.
Image: Whitefish Energy Holdings workers restore power lines damaged by Hurricane Maria in Barceloneta, Puerto Rico
Whitefish Energy workers restore power lines damaged by Hurricane Maria in Barceloneta, Puerto Rico, on Oct. 15.Ramon Espinosa / AP file

SAN JUAN, Puerto Rico — The head of Puerto Rico’s power authority moved on Sunday to cancel a controversial contract with Whitefish Energy, the small Montana company under scrutiny for the deal worth hundreds of millions to help restore power to the hurricane-ravaged island.

The announcement of the upcoming cancellation came just a few hours after Puerto Rico Gov. Ricardo Rosselló asked the board of Puerto Rico Electric Power Authority (PREPA) to cancel the contract with Whitefish during a news conference on Sunday morning.

PREPA CEO Ricardo Ramos said during a news conference Sunday afternoon that he accepted the governor's recommendation and would be writing a letter to the board of directors "asking for a resolution that will allow me to cancel the contract," adding that the contract was not officially canceled as of yet.

Ramos added that the plan was for Whitefish to "finish what they started," which was work on two transmission lines on the island.

He added that he hoped to speak with officials at Whitefish within the next few hours and that the contract required a 30-day notice for cancellation.

"Even if I cancel today it becomes effective in 30 days," he added.

Earlier Sunday, Gov. Rosselló said he was calling on PREPA to cancel the contract out of public interest.

“In light of the information that has come about with regards to the contracting of Whitefish Energy and in the interests of protecting our public interests I have asked the board of the power authority to invoke the cancellation clause in the contract immediately,” Rosselló said.

“There can be no distraction that alters the commitment to lift up the electrical system as quickly as possible,” he added in a post on social media.

The governor had previously called for the Office of the Comptroller to investigate and audit the contracting process of the company by PREPA.

The governor also called for the installation of a "special outside coordinator" in terms of contracts and purchases, "so that we can have more clarity in this process."

Ramos said he will follow the governor's suggestion and will move to cancel the contract. Ramos said that the move to cancel the deal comes after the controversy over the contract, but did not signal that there was anything "outside of the law" with the agreement.

He added that Whitefish had been doing a great job but that political distractions had snowballed.

Ramos said the cancellation will not stop any work the company currently has in progress, but could delay other grid-restoration efforts by 10 to 12 weeks. He also said it would cost PREPA additional money to demobilize the contract.

Whitefish Energy said in a statement Sunday evening that it was "very disappointed" that the governor asked PREPA to cancel the contract, "which led to PREPA's announcement this afternoon."

"The decision will only delay what the people of Puerto Rico want and deserve — to have the power restored quickly in the same manner their fellow citizens on the mainland experience after a natural disaster," the company said in the statement. "We will certainly finish any work that PREPA wants us to complete and stand by our commitments knowing that we made an important contribution to the restoration of the power grid since our arrival on the island on October 2."

The company said it was proud of the work it had done and that in less than a month, it had "brought 350 workers with specific expertise in this task and were on track to have more than 500 linesmen on the island by this week if allowed to continue."

"We only wish the best for the great people of Puerto Rico. We are very proud of our contributions to the island's recovery and proud of the tremendous work that our team has done under very challenging conditions," the statement added.

The chief executive of Whitefish Energy, Andy Techmanski, told NBC News from San Juan on Saturday that he first made contact with officials on Puerto Rico through the business networking site LinkedIn shortly after Hurricane Irma hit in September — and not through any previous connections. He said he kept in contact with them through Hurricane Maria's devastation.

Related: Whitefish CEO Defends Puerto Rico Deal, Says Critics on 'Witch Hunt'

"I think that there are people out there on a witch hunt looking for something that does not exist," he said.

Irma knocked out power to one million customers in Puerto Rico, but the devastating Hurricane Maria knocked out power to the entire island. As of Sunday, Puerto Rican officials said there was only about 30 percent of power generation on the island.

Controversy over the up to $300 million contract has grown following a report in The Washington Post detailing the mounting questions surrounding the deal.

Members of Congress from both parties and Puerto Rican officials have called for investigations into the deal.

It was widely reported that Whitefish only had two full-time employees when Maria made landfall, a number not disputed by Whitefish’s own newly-hired media team at the time.

Related: Democrats Call for Investigation Into Whitefish Energy Contract in Puerto Rico

But Techmanski told NBC News that figure is incorrect, and that the company had 20-40 full-time employees working projects in Arizona, Montana and Washington State. He said Whitefish has more than 350 workers in Puerto Rico and plans to have more than 500 there soon.

"We're here doing actual work," Techmanski said. "We're under a contract and we came in good faith, and I think we're making an impact."

Techmanski also strongly denied that U.S. Interior Secretary Ryan Zinke, who is also from Whitefish, Montana, or anyone else in President Donald Trump’s administration had anything to do with his securing the contract.

Related: Puerto Rico's Frantic Search for Someone to Turn on the Lights

Zinke said in a statement Friday that "I had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico" and any suggestions of involvement or influence "are completely baseless."

But a statement from his office acknowledged that the Zinke and the Techmanski families know each other because of the size of the small town and that Zinke's son had worked a summer job at one of the company's construction sites.

"The Zinkes and the Techmanskis know each other because they both live in a small town (population 6,000) where everyone knows everyone and his son joined a friend who worked a summer job at one of their construction sites," said the statement from Zinke's office.

The Federal Emergency Management Agency said in a statement Friday that it had “significant concerns” and had not approved the deal, despite a portion of the contract that suggested otherwise.

"That's simply not something we would do," Mike Byrne, FEMA's coordinator in Puerto Rico, told NBC News on Saturday.

San Juan Mayor Carmen Yulín Cruz, a vocal critic of the deal and the Trump administration in general, said Rossello must now “fire the person that signed the contract” on MSNBC Sunday following news of the mayor’s announcement.

“The person responsible for signing the contract must be fired immediately and of course that is the head of PREPA, Ricardo Ramos,” she said.

Gabe Gutierrez reported from San Juan. Daniella Silva reported from New York City.