Federal judge rejects outside oversight for Puerto Rico utility
- A federal judge yesterday ruled against a request by the Financial Oversight and Management Board (FOMB) for Puerto Rico to install a former military officer as the Chief Transformation Officer for the island's beleaguered utility.
- Puerto Rico Gov. Ricardo Rosselló had opposed the move, viewing it as a federal overreach into the island's affairs. Yesterday, he held a press conference to announce the island will seek $94 billion in federal aid for rebuilding, including $46 billion for housing and $30 billion for critical infrastructure.
- Separately, the New York Times reports leadership at the Puerto Rico Electric Power Authority ignored advice from their own lawyers, who warned that a contract with Whitefish Energy to repair the island's electric grid included "high risks associated with the scope of this work." That contract was ultimately canceled.
Puerto Rico's utility will continue to operate independently of the federal government after a judge rejected a proposal to install a former military official as Chief Transformation Officer.
In a statement, Rosselló praised the decision by U.S. District Judge Laura Taylor Swain to deny FOMB's request to install oversight leadership at PREPA. He said the oversight board "has no power to take control of the Government or its instrumentalities in full."
At the same time, the U.S. House Natural Resources Committee is reviewing documents from the utility that show it received legal advice regarding a contract with Whitefish Energy to repair the island's grid. The committee will hold a hearing on the contract today.
Whitefish's contract came under intense scrutiny after its terms became widely known. In the days after Hurricane Maria struck the island, PREPA declined mutual aid offers from other utilities, opting for a $300 million contract for power restoration with the little-known Montana firm.
The contract, now canceled, included an employee per-diem in excess of $400 for accommodations and food as well as a passage ensuring that, "In no event shall [government bodies] have the right to audit or review the cost and profit elements."
Rosselló took to Facebook Live yesterday, streaming the press conference on the National Governors Association page, to drop the eye-popping final damage totals. In addition to housing and critical infrastructure, Puerto Rico needs $17.9 billion from other federal grant programs to complete its rebuild.
In a letter to President Trump, Rosselló called this "a transformative moment in the history of Puerto Rico,” adding that leadership from the White House and both political parties "will be essential to our recovery, and the future economic and fiscal health of the island.”
Rosselló comments also touched on Congress' tax overhaul: He asked lawmakers not to include the island in a 20% tax on imported goods, which he argued should be considered domestic manufacturing,
Almost two months after Hurricane Maria devastated the island, the island's electric generation remains below 50%. Rosselló announced a new website so that recovery progress can be tracked, including open supermarkets, cell and telecommunications stats, number of people in shelters, ports, banks, ATMs and even displaced pets. It currently indicates 52.2% of the island's generation is still offline.
- The Mercury News Puerto Rico seeks $94 billion in hurricane aid
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