The defendant, Whitefish Energy Holdings LLC, was awarded the $300 million no-bid contract for restoration work, then had it revoked.
Claiming it’s owed nearly $5 million for work performed in Puerto Rico after Hurricane Maria destroyed the island’s power grid, JEA filed a lawsuit against a company contracted by the island’s electric authority to restore the island’s infrastructure.
The defendant is Montana-based Whitefish Energy Holdings LLC.
Andy Techmanski, Whitefish CEO, did not return multiple calls for comment.
Hurricane Maria struck Puerto Rico on Sept. 20, 2017 as a Category 5 storm, displacing more than 100,000 people and destroying much of the island’s power grid.
According to the complaint, on Oct. 1, 2017, JEA and Whitefish entered into a subcontract agreement for JEA to provide aid and assistance for power restoration work. Whitefish agreed to reimburse JEA for costs and expenses associated with the restoration.
Whitefish already had a $300 million emergency master service agreement with the Puerto Rico Electric Power Authority, a branch of Puerto Rico’s government, to supervise the restoration.
Between Oct. 4, 2017 and Nov. 21, 2017, JEA provided resources, including equipment and personnel, transported from the U.S. for the restoration and submitted seven weekly invoices to Whitefish for a total of $6,994,964.99 in reimbursement.
The complaint states that Whitefish has remitted to JEA $2,008,351.89, leaving a balance of $4,986,613.10 due based on the terms of the contract.
JEA asks the court to award damages in the amount of the balance due, plus interest and costs.
In the lawsuit, JEA says “Whitefish has acknowledged that the monies stated are due and owing, but has made no payment in response to this demand.”
In a story posted on Sept. 20, two years after Hurricane Maria struck Puerto Rico, Bloomberg.com reported that Techmanski contends Whitefish is owed more then $100 million for work it completed before The Puerto Rico Electric Power Authority terminated the emergency master service agreement in late October 2017, while JEA was on the island helping restore the power grid.
The authority was responding to questions raised about how Whitefish, which had two employees when it was awarded the restoration work, was awarded the $300 million no-bid contract.
The Miami Herald reported in February 2018 that the contract was canceled two weeks after it was awarded after media reports that Whitefish had personal ties to former U.S. Interior Secretary Ryan Zinke.
The Herald also reported that Whitefish’s rates were far above normal for emergency electrical work.
The Wall Street Journal reported in November 2017 that Whitefish was billing PREPA more than $300 an hour for linemen.
According to an exhibit filed with its lawsuit, JEA billed Whitefish $80 an hour for linemen.
Bloomberg reported in September, two years after the hurricane, that Whitefish should ultimately be paid by the Federal Emergency Management Agency, but Bloomberg said FEMA hasn’t yet determined how much of the Whitefish expenditures it will cover with federal disaster funding.
Asked to comment for this story and provide an update on the status of disaster funding that may be awarded to Puerto Rico, FEMA emailed a response from its Press Secretary, Lizzie Litzow:
“FEMA provides grants to reimburse Public Assistance applicants for eligible disaster-related work. FEMA is not involved in the procurement process nor are we responsible for paying contractors hired by applicants. Additionally, FEMA is not involved in the contract between an applicant and contractor. All questions regarding the contract or any payments made to the contractor should be directed to PREPA.”
PREPA provided a statement from Fernando Padilla, director of the authority's project management office.
He said PREPA submitted a Project Worksheet to FEMA in the amount of $143 million relating to Whitefish. The amounts paid by PREPA have been of $36 million, which are within the $143 million petition to FEMA.
“The documentation was submitted to FEMA since Fall of 2018 and are indispensable to pay the contractor on service rendered during the restoration period,” Padilla said.
Litzow said FEMA is reviewing documentation submitted by PREPA as it pertains to the work performed by Whitefish, but no funds have been obligated at this time.
JEA is represented by City Assistant General Counsels Christopher Garrett and Tiffany Douglas Pinkstaff.