top of page
  • Writer's pictureThe San Juan Daily Star

Most Cobra invoices have been paid, but PREPA still disputes a portion

The Puerto Rico Electric Power Authority, for reasons it has not made public, is disputing some $1.5 million in charges for post-hurricane power grid repair work performed by Cobra Acquisitions.

By The Star Staff

The Puerto Rico Electric Power Authority (PREPA) has approved most of a $82 million tranche of invoices from Cobra Acquisitions for work to repair the grid after the 2017 hurricanes destroyed it, but the utility disputes about $1.5 million, according to a recent joint status report.

Cobra also faces certain bureaucratic hurdles in getting its money. Payments to the company were delayed following criminal charges against former Cobra President Donald Ellison, who ultimately pleaded guilty to offering gratuities to a Federal Emergency Management Agency (FEMA) administrator in exchange for a contract. They have also been delayed because all the PREPA officials with the authority to approve the invoices left when LUMA Energy took over the operation of PREPA’s transmission and distribution system.

The Federal Emergency Management Agency (FEMA) has already reimbursed PREPA for the invoices for work completed five years ago after hurricanes Maria and Irma devastated the island.

Puerto Rico’s Central Office for Recovery, Reconstruction and Resiliency (COR3) must now approve the invoices before Cobra is paid, the report notes.

That process generally takes 60 to 90 days, PREPA said in the report.

PREPA disputes about $1.5 million in charges for reasons it did not provide.

On May 16 of this year, Cobra filed a motion seeking to go over the bankruptcy stay in order to sue for its money.

After a series of other legal hurdles, on Oct. 19 the Title III court issued the status report order, directing the parties to file, by Dec. 1, “a joint status report addressing the status of each approved unpaid invoice that has not been submitted to COR3.

The government parties reported that on Nov. 1, PREPA submitted a request for reimbursement to FEMA for $82.3 million in approved unpaid invoices to COR3. These invoices are subject to 90% funding from FEMA Public Assistance, meaning PREPA will need to pay the other 10%.

As of the aforementioned date, PREPA continues to dispute charges for $1.5 million.

Each of the disputed charges is a portion of an invoice PREPA otherwise approved and submitted to COR3. Cobra has indicated to the government parties that it is not willing to include the resolution of these disputes in mediation. The government parties are willing to do so.

67 views0 comments
bottom of page