Puerto Rico power contractor suspends work, citing unpaid bills

Erika P. Rodriguez - The New York TimesA Whitefish Energy Holdings truck in Manati, Puerto Rico, Nov. 3. Two months after Hurricane Maria ravaged the island, the company hired to help restore electricity says it is "standing down," because it is owed tens of millions of dollars.

With less than half the power on Puerto Rico restored two months after a deadly hurricane hit the island, the company hired to help bring back the electricity is "standing down," it said, because it is owed tens of millions of dollars for weeks of work.

Whitefish Energy Holdings had already been fired last month by the Puerto Rico Electric Power Authority after widespread criticism and multiple investigations of a $300 million contract it received to help repair the island's power grid. Even with the cancellation of the contentious contract, the company and its 500 workers were supposed to stay on the job until the end of the month.

Puerto Rico's bankrupt electric company, known as PREPA, is behind in its payments and Whitefish cannot continue fronting the cash needed to hire subcontracted workers, Whitefish said. Dozens of line workers from Florida have already begun heading home, because the utilities they work for are nervous about payment, the company said in a letter to PREPA. It added that it hoped to resume work once the payment issue was resolved.

According to the Whitefish letter, the company has billed about $103 million — and $83 million is still outstanding.

The billing dispute comes as the amount of power generation in Puerto Rico has actually declined in the past week. More than eight weeks after Hurricane Maria swept through the island, toppling power poles, transmission lines and towers, the grid is performing at just 49.4 percent of its capacity. PREPA had reached 50 percent last Wednesday, before several power failures knocked out service to many communities that had seen electricity restored.

Thousands of businesses remain closed and millions of people are in the dark.

The payment dispute underscores the chaotic atmosphere at PREPA, which is $9 billion in debt and in search of a new chief executive after the last boss was forced out on Friday.

"It may have not been the best business decision coming to work for a bankrupt island," Whitefish's chief executive, Andy Techmanski, told CNN.

He said the company had been assured it would be reimbursed for its work by the Federal Emergency Management Agency. But FEMA distanced itself when curious clauses in the contract saying it had been approved by the federal government and could not be audited were made public. FEMA's director has vowed not to commit "one dollar" to the contract, and it is unclear whether PREPA has enough money to pay the bills itself.

A spokesman for PREPA said that the utility had stopped making payments after one of the subcontracted companies Whitefish had hired complained that it had not been paid. The subcontractor, PREPA said, asked for a freeze on Whitefish's payments.

"Faced with this claim, PREPA had to stop the pending payments to Whitefish until the situation with the Whitefish subcontractor is clarified," the company said in a statement. The statement did not name the subcontractor.

The company's invoices are being audited, PREPA said.

Whitefish and PREPA came under scathing criticism when it was revealed that PREPA had agreed to pay $319 an hour for the subcontracted linemen, far above industry standards.

Three Florida companies that sent linemen under the Whitefish contract were being paid far less, as little as $42 an hour.

The three public utilities, Lakeland, Kissimmee and Jacksonville Electric, said their workers were heading home because they had completed their assignments. The companies said that they had not been paid but that the waiting period was normal.

"Their families are anxious to have them home," said Chris Gent, a spokesman for the Kissimmee Utility Authority. "This is the longest mutual aid trip we've ever done."

The Puerto Rico government enlisted more companies to help. Gov. Andrew M. Cuomo of New York announced Tuesday that another 200 workers and 180 vehicles from the state had arrived in Puerto Rico.