Puerto Rico still owes company $350 million for network restoration in 2017 as it faces more hurricane outages


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An Oklahoma-based energy company has repeatedly demanded payment from the Puerto Rican government for work it did years ago to restore the island’s power grid.

Mammoth Energy said the Puerto Rico Electric and Power Authority (PREPA), the now-defunct government agency that previously oversaw the territory’s power grid and transmission infrastructure, still owes about $365 million for a contract that in 2017, the company won contracts worth $1.6 billion to restore Puerto Rico’s decimated grid after Hurricane Maria.

The company, which worked on 17 other cleanup projects after a natural disaster, ultimately owed a total of $1.3 billion after completing work and leaving ahead of schedule in 2019. When Cobra workers left the island, PREPA still owed $224 million, an amount that swelled to more than $360 million when accounting for interest.

“We treated it almost like a military action, which it was,” Mammoth Energy CEO Arty Straehla told Fox News Digital in an interview. “At one point we had 1,000 people on the island working to restore power because the devastation was so severe. When we got there 100% of the island was down.”

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“It was one of the most devastating things I’ve seen,” he continued.

Federal Emergency Management Agency personnel deliver supplies in the aftermath of Hurricane Maria in Guayama, Puerto Rico, October 5, 2017.
(AP Photo/Carlos Giusti, File)

Hurricane Maria hit Puerto Rico and surrounding islands in mid-September 2017, severely devastating the island’s power grid, medical services, and utilities like running water. While the hurricane initially killed dozens of Puerto Ricans, a Harvard University study estimated that it claimed an additional 4,645 lives.

The National Centers for Environmental Information reported that the storm caused $107.1 billion in damage, making it the third costliest US storm on record. The bipartisan budget bill, which former President Trump signed into law in February 2018, provided $2 billion to restore Puerto Rico’s grid and nearly $90 billion in total for disaster relief after a series of storms, including Hurricane Maria.

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Less than a month after Cobra signed the contract with PREPA in October 2017, the company sent several barges full of equipment and hundreds of workers to Puerto Rico to fix the network.

Homes are surrounded by floodwaters in Catano, Puerto Rico, September 28, 2017, a week after Hurricane Maria hit.

Homes are surrounded by floodwaters in Catano, Puerto Rico, September 28, 2017, a week after Hurricane Maria hit.
(AP Photo/Carlos Giusti)

“We came down, went through all the adversity,” Straehla said. “We ended up taking our own accommodation there because we didn’t want to take resources off the island. So we took barges there where our men could be accommodated offshore.”

“They would go out and work 16 hours a day and then come back.”

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Cobra completed its work and left Puerto Rico in March 2019, according to Straehla. He said the company had successfully executed its work, restoring power to the island, and had been commended by the Federal Emergency Management Agency (FEMA).

The RAND Corporation, a research and analysis firm, released a report for FEMA after the company completed its work, saying the contract was reasonably priced. The report did not analyze whether Cobra properly implemented the contract.

“Cobra’s billable rates to PREPA fall within these representative ranges and are therefore reasonable for emergency repair work performed by Cobra,” the report concludes.

Power poles and lines toppled on the road in Humacao, Puerto Rico after Hurricane Maria in 2017.

Power poles and lines toppled on the road in Humacao, Puerto Rico after Hurricane Maria in 2017.
(AP)

Straehla, however, said PREPA, which received taxpayer funds through FEMA, has been in breach of its contract since its company completed its work.

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He added that the agency filed for bankruptcy shortly after Hurricane Maria and that Mammoth Energy was involved in those legal proceedings. PREPA’s assets were sold to the private sector company LUMA Energy.

However, Straehla said Mammoth Energy was financially impacted by the alleged breach of contract. The company was forced to lay off hundreds of workers due to the situation.

“It had a huge impact on us — it certainly changed the trajectory of the business,” he told Fox News Digital. “We want to get paid, we want to reinvest, we want to create more jobs and continue to grow this business.”

“For a company of our size, $365 million makes a dramatic difference to our trajectory.”

Streets are flooded after Hurricane Fiona hit Salinas, Puerto Rico on September 19.  (AP Photo/Alejandro Granadillo)

Streets are flooded after Hurricane Fiona hit Salinas, Puerto Rico on September 19. (AP Photo/Alejandro Granadillo)

In a statement, FEMA spokesman Jeremy Edwards said the agency continues to fund emergency and permanent work in Puerto Rico related to Hurricane Maria. He also noted that FEMA has awarded more than $11 billion in federal funding for these needs, adding that the Puerto Rican government is required to ensure that certain requirements are met when making grants.

“Before using FEMA funds, the government of Puerto Rico and its subrecipients must ensure that grant program requirements are met,” Edwards told Fox News Digital. “FEMA commends the development by the Government of Puerto Rico of strong accounting and budget management practices in place since 2017 to ensure proper use of federal funds.”

FEMA does not have the authority to compel PREPA to make payments to contractors and subcontractors.

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Straehla’s calls for PREPA to end payments to his company come as Puerto Rico faces further devastation after Hurricane Fiona hit the island this week. The storm killed eight people and left most of the island without power.

LUMA Energy did not respond to a request for comment.


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