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Two years after media storm over Puerto Rico contract, MT power-line company still not paid

Whitefish Energy CEO says company owed nearly $130 million
Posted: 1:30 PM, Nov 21, 2019
Updated: 2019-11-21 19:53:36-05
Two years after media storm over Puerto Rico contract, MT power-line company still not paid

Two years after a media firestorm torpedoed Whitefish Energy’s contract to rebuild the power grid on hurricane-ravaged Puerto Rico, the CEO of the Montana firm says he’d do it all again – but, he’d like to get paid for work the company did.

“It’s all but destroyed my business,” Andy Techmanski told MTN News in an interview this month. “We’re carrying so much debt right now, we can’t maneuver, we can’t afford to grow. We have this stigma around us that won’t be cleared up until we get paid and we can say, `Hey, look, we’re the good guys.’”

Whitefish Energy, a transmission-line construction firm based in Whitefish, is owed nearly $130 million for repairing portions of Puerto Rico’s five main electric transmission lines and related work, in the wake of Hurricane Maria in late 2017.

But the company can’t get the money because the Federal Emergency Management Agency (FEMA) won’t authorize reimbursement to the Puerto Rico Electric Power Authority (PREPA) for work Whitefish Energy did two years ago, Techmanski said.

FEMA told MTN News this month it is “reviewing documentation submitted by PREPA,” but would provide no other details.

Whitefish Energy’s contract with the Puerto Rico power authority was canceled one month into the company’s work on the island, after it was suggested Whitefish Energy gained an alleged no-bid contract because of favoritism by the Trump administration and ties to then-Interior Secretary Ryan Zinke, who’s from Whitefish.

Techmanski and Zinke say those allegations were and are completely false.

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Downed power lines and towers on Puerto Rico, after Hurricane Maria in late 2017

Techmanski also notes, correctly, that officials from FEMA and a power company that took over after Whitefish have been charged with fraud and bribery related to Puerto Rico contracts – while investigations turned up no wrongdoing by his company for its work.

“We’re the last man standing,” he says. “We’re the ones who never got implicated in anything, because we conduct an ethical business.”

Techmanski also said he’s tried to enlist the help of Montana’s congressional delegation, but to no avail.

“Sens. (Steve) Daines and (Jon) Tester sit on oversight committees that have power over FEMA, but we can’t get them to support us,” he said.

A Tester spokeswoman said his office has pressed FEMA to be “transparent” about its role and the process, but it’s possible the agency is waiting for more documentation from PREPA.

Daines’ office said only that the senator "would continue to monitor the situtation."

As Techmanski tells it, in September 2017, his then-two-year-old construction company was working in central Washington state, rebuilding power lines in mountainous territory for a local public utility district, when it got wind of the hurricanes approaching Puerto Rico.

“As a power-line contractor, we always keep an eye out for firestorms on the West Coast, hurricanes on the East Coast,” he said. “We get called, and we have to resource-up and plan things very quickly.”

Techmanski had worked earlier in his career Puerto Rico and knew the terrain, so he said he began emailing officials at PREPA just before Maria hit, offering his company’s services.

A PREPA official replied and asked for more information, and several days after the hurricane swept the island, knocking out power entirely, Techmanski and some of his crew flew to Puerto Rico. They toured the damage and then, in a candlelit conference room at PREPA headquarters on Sept. 26, 2017, hammered out a contract, he said.

He said he returned to Montana to start lining up subcontractors and, a week later, the company began work on Puerto Rico. Not only did Whitefish Energy begin repairing power lines, but it also helped coordinate fuel, food, water and other supplies that workers needed on the devastated island, he said.

Whitefish Energy also acted as a lead contractor, bringing on some established utilities as subcontractors, because it was the first company on the scene, Techmanski said. But by the end of October, some of the larger companies may have resented Whitefish Energy’s role, he said.

“That’s about when the bad news started with us,” he said. “I believe that some of the competition didn’t like that they couldn’t get a foothold.”

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A helicopter employed by Whitefish Energy prepares to move power-line components on Puerto Rico after Hurricane Maria in late 2017.

Techmanski said he can’t say for sure how the “bad news” about Whitefish Energy began. But by late October, national media were spotlighting the contract, asking how a “two-person firm” had won a “no-bid” contract, questioning the hourly rates paid to linemen and other workers, and noting that Interior Secretary Zinke is from Whitefish, suggesting he had something to do with the contract award.

Zinke, a former Republican congressman who resigned his Interior post last year, told MTN News this week that he had “absolutely nothing whatsoever to do with Whitefish Energy’s contract, zero.”

“It, like so many other false allegations, was just one of many political smears waged by an angry, intolerant and shamefully dishonest opposition,” he said.

Once news of the contract broke, congressional and FEMA scrutiny followed, and PREPA came under pressure to cancel it.

Techmanski said he was told by PREPA’s executive director on Oct. 30, 2017, that the contact would be canceled – but that the contract had a 30-day cancellation clause, and PREPA asked Whitefish if it could keep working through November.

“I said, `Don’t worry; you’ve got our commitment,’” he said. “So we continued to push as hard as we could, all the way to Nov. 30. … We created a plan to be able to shepherd our contractors who wanted to stay, to the new contractors, to make sure that was as seamless as it could be.”

The company ultimately repaired more than 200 miles of transmission lines and more than 50 towers, often in remote, heavily forested and mountainous terrain, he said.

In papers filed in U.S. District Court in Puerto Rico in September, Whitefish Energy said it hasn’t received a single payment on the $126 million it’s owed, for work repairing transmission lines and interest and other fees.

The filing was an “objection” in PREPA’s bankruptcy proceeding, saying a proposed settlement could delay payment to Whitefish Energy for years.

Techmanski said coverage of the contract and the company’s work on Puerto Rico often repeats false narratives and inaccurate statements.

PREPA had proposals from five other companies for the initial contract, he said, and Whitefish Energy had 13 employees at the time, rather than two. Like any general contractor, it “flexed up” its workforce for the job, hiring subcontractors, and had more than 500 workers on Puerto Rico by mid-November 2017, he added.

Techmanski said PREPA and Whitefish Energy amended the contract in mid-October to make it FEMA-compliant, and that the rates paid to workers were similar to proposals from other companies.

He also said when Whitefish Energy completed its work, two-thirds of the island’s transmission capacity had been restored – and that since then, more than $1 billion has spent on just one contract, and power is still not reliably restored on the island.

Techmanski said he’s spent many hours visiting with members of Congress, trying to convince them his company did nothing wrong and that he needs to get paid, so subcontractors can get their money.

Whitefish has been able to get some smaller contracts since then, but Techmanski said the cloud of uncertainty from the non-payment has made other companies reluctant to work with him.

Still, he said he didn’t regret taking on the biggest job of his career and helping restore power to a devastated population.

“There are not many times in your career, or your life, that you can personally say, without a doubt, that you saved a lot of lives,” Techmanski said. “I’d do this again in a second. I just would be a little bit smarter on how we got paid and the security around that.”