Chris Gorman, a general foreman from Whitefish, in Manatí, P.R., where the company has been working on a transmission line. Questions about the Whitefish contract have led to its cancellation. Photo: Erika P. Rodriguez / The New York Times

By Frances Robles
12 November 2017

SAN JUAN (The New York Times) – The small energy outfit from Montana that won a $300 million contract to help rebuild Puerto Rico’s tattered power grid had few employees of its own, so it did what the Puerto Rican authorities could have done: It turned to Florida for workers.

For their trouble, the six electrical workers from Kissimmee are earning $42 an hour, plus overtime. The senior power linemen from Lakeland are earning $63 an hour working in Puerto Rico, the Florida utility said. Their 40 co-workers from Jacksonville, also linemen, are making up to $100 earning double time, public records show.

But the Montana company that hired the workers, Whitefish Energy Holdings, had a contract that allowed it to bill the Puerto Rican public power company, known as Prepa, $319 an hour for linemen, a rate that industry experts said was far above the norm even for emergency work — and almost 17 times the average salary of their counterparts in Puerto Rico.

A spokesman for Whitefish, Chris Chiames, defended the costs, saying that “simply looking at the rate differential does not take into account Whitefish’s overhead costs,” which were built into the rate.

“We have to pay a premium to entice the labor to come to Puerto Rico to work,” Mr. Chiames said. Many workers are paid overtime for all the time they work. Overtime pay varies by type of worker, union membership, mainland utility company and many other factors.

The markup is among the reasons that federal officials are scrutinizing all other contracts involving Puerto Rico. The control board that oversees Puerto Rico’s finances is seeking more authority over the billions headed the island’s way, including the power to review big contracts and randomly inspect smaller ones.

Two weeks after Prepa abruptly withdrew the contract from Whitefish following strong criticism by federal and congressional officials of the company’s expected ability to perform the work needed, more questions are being raised about the deal, including how much it will actually cost. Whitefish will keep repairing power lines until 30 November 2017.

As the Trump administration prepares to spend billions of dollars on rebuilding Puerto Rico’s infrastructure, the Whitefish deal — hatched in a dim powerless room six days after a storm packing winds of nearly 150 miles an hour knocked down thousands of power poles and lines — has served as a cautionary note about the potential for soaring costs that are common in the wake of disasters.

Questions are already being raised about a second contract that Prepa signed, this one with an Oklahoma company, Cobra, which was the highest bidder, required a $15 million down payment and — like the doomed Whitefish agreement — included a clause that said the deal could not be audited. [more]

The Lineman Got $63 an Hour. The Utility Was Billed $319 an Hour.

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