Puerto Rico's path to restore power
shifts after Whitefish exit
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[October 31, 2017]
NEW YORK (Reuters) - Efforts to
restore electricity to Puerto Rico nearly six weeks after Hurricane
Maria are shifting as the island's utility and its regulators, along
with U.S. authorities, removed a key contractor and moved to triple the
funding of another.
The U.S. Army Corps of Engineers, which is leading the federal power
restoration effort, said it plans to boost the size of a key contract
awarded to Fluor Corp by $600 million, to $840 million, according to a
The Army Corps said it was modifying the contract to ensure "continued
execution of the critical repair and restoration of the electric power
grid in Puerto Rico."
It comes a day after Puerto Rican Governor Ricardo Rossello and the
Puerto Rico Electric Power Authority (PREPA) said they would cancel a
$300 million contract with Whitefish Energy Holdings, after an uproar
over the deal's provisions and the tiny Montana company's lack of
experience with projects of such a large size.
Fluor, which declined comment, was already in the process of bringing in
people to help restore transmission and distribution of power to the
U.S. territory. Hurricane Maria knocked out power to all 3.4 million
residents of Puerto Rico, and only about 30 percent of power has been
restored nearly six weeks later.
The Army Corps' action on Monday signals that Fluor is now the primary
contractor on Puerto Rico. The Army Corps awarded the original $240
million Fluor contract. The more controversial Whitefish contract was
handled directly with PREPA.
The Whitefish deal came under fire after it was revealed last week that
the terms were obtained without a competitive public bidding process.
Residents, local officials and U.S. federal authorities all criticized
Conflict over who should lead the process of restoration and oversee
PREPA has hampered efforts. PREPA, the island's bankrupt power utility,
and the governor have argued that the utility should maintain control,
while a fiscal control board created by U.S. Congress last year to
restructure the island's finances has also jockeyed for control.
"PREPA and the governor of Puerto Rico and the administration here need
to make a decision on who is in charge of PREPA," said Ariel Horowitz of
Synapse Energy Economics, a consultant to Puerto Rico's energy
Puerto Rico's energy commission, a small regulatory board tasked with
overseeing PREPA, has the option of assigning an independent adviser to
monitor progress in restoring the grid, but has not done so yet.
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Workers of Puerto Rico's Electric Power Authority (PREPA) repair
part of the electrical grid after Hurricane Maria hit the area in
September, in Manati, Puerto Rico October 30, 2017. REUTERS/Alvin
ISOLATION A PROBLEM
Currently, there are about 400 subcontracting crews on the island
working to bring back power. Rossello said he wants to have 1,000
crews by Nov. 8, leaning on so-called mutual aid from utilities in
New York and Florida, which have crews on the island.
Getting assistance from other utilities, which usually help one
another after storms, may continue to be complicated by Puerto
Rico's isolation and lack of investment in its system.
A private sector source, who could not be named, said the transition
from Whitefish, should it be handled smoothly, will hopefully
accelerate the restoration of power. He said PREPA'S goal of
restoring 95 percent of power by mid-December – a full three months
after the hurricane – is slow for a typical utility.
PREPA did not respond to a request for comment.
Whitefish said it has completed significant work on two major
transmission lines that crossed over the mountains of Puerto Rico. A
person familiar with PREPA's operations said on Monday that
Whitefish would complete work on critical lines despite the
cancellation of the contract.
Several other utilities are on the island, as well as private
contractors that include Southern Co's PowerSecure unit and Fluor.
An Army Corps spokesman said the Corps is not currently planning on
hiring those reporting to Whitefish, but the subcontractors - Fluor
and PowerSecure - might. Officials at Fluor and Southern did not
comment on that possibility.
JEA, the municipal utility for Jacksonville, Florida, said it would
keep its crew of about 40 people on the island, even if it no longer
reports to Whitefish.
(Reporting by Jessica Resnick-Ault and Scott DiSavino; Additional
reporting by Nick Brown; Editing by David Gaffen and Leslie Adler)
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