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Puerto Rico Cancels Whitefish Energy Contract

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SAN JUAN, Puerto Rico -

The head of Puerto Rico's government power company says the agency will scrap a $300 million contract with Whitefish Energy Holdings once it finishes current work on Hurricane Maria recovery efforts.

Power company director Ricardo Ramos said Sunday that he's bowing to a demand by the U.S. territory's governor, Ricardo Rossello. Ramos said the cancellation will delay work by 10 to 12 weeks.

Rossello said earlier Sunday that he wants the no-bid contract that Puerto Rico Electric Power Authority signed with Whitefish Energy to be canceled "immediately."

Rossello's announcement came as federal legislators plan to investigate the contract awarded to the small company from Interior Secretary Ryan Zinke's hometown.

"There cannot be any kind of distraction that alters the commitment to restore electrical power as soon as possible in Puerto Rico," Rossello said, adding that nearly $8 million has been paid to Whitefish so far.

Whitefish Energy Holdings said in a statement that the company was "very disappointed" by Rossello's decision. It said canceling the contract would delay restoring power to the island.

"We will certainly finish any work that PREPA wants us to complete and stand by our commitments knowing that we made an important contribution to the restoration of the power grid since our arrival on the island on Oct. 2."

Rossello said he has requested that crews from New York and Florida come help restore power in Puerto Rico as he criticized the U.S. Army Corps of Engineers for not meeting its goals. The agency could not be immediately reached for comment.

Audits of the Whitefish contract at a local and federal level are ongoing, and the governor also announced the appointment of an outside coordinator to oversee the power company's purchase and contracting division.

"If something illegal was done, once again, the officials involved in that process will feel the full weight of the law, and I will take administrative actions," Rossello said.

The company has only two full-time employees, and many were surprised when it received the big contract to help rebuild Puerto Rico's electrical grid in the aftermath of Hurricane Maria. Whitefish has never worked on a project of that size.

Power company Director Ricardo Ramos has said that Puerto Rico's Electric Power Authority reached a deal with Whitefish just days before the hurricane struck, saying that he spoke with at least five other companies that demanded similar rates, in addition to a down payment the agency did not have. Ramos also said the Federal Emergency Management Agency had approved of the deal, something the agency has denied.

FEMA said it has not approved any reimbursement requests from the power company for money to cover repairs to the island's electrical system. The contract said the utility would not pay costs unallowable under FEMA grants, but it also said, "The federal government is not a party to this contract."

The Associated Press contributed to this report.

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