PREPA settles with Whitefish Energy on grid rebuild debt
By The Star Staff
The Puerto Rico Electric Power Authority (PREPA), through the Financial Oversight and Management Board, has reached a final settlement and release agreement of its debt with Whitefish Energy Holdings LLC (WEH).
In October 2020, Whitefish asked the Title III bankruptcy court to give priority status to the payment owed to the firm by PREPA. Whitefish said at the time that in the aftermath of hurricanes Irma and Maria in 2017, it was the first contractor in the field working to repair the power grid amid an islandwide blackout. Its work was praised by PREPA officials, but the firm had yet to be paid. PREPA owes Whitefish more than $130 million.
The settlement of the dispute, which brings PREPA closer to restructuring its almost $9 billion debt, calls for a payment of $90.2 million in two installments with the first installment in the amount of $63.8 million to be paid to WEH by PREPA from funds already paid to PREPA from the Federal Emergency Management Agency (FEMA) for the sole purpose of paying unpaid invoices approved for payment by FEMA and owed to WEH in the aforementioned amount, on or before the 15th business day following the execution of the settlement agreement.
PREPA must pay a second installment of $26.4 million to WEH on or before the 15th day following entry of an order approving the settlement agreement. It also must pay an allowed administrative expense claim in favor of WEH in the amount of $6 million, payable on the effective date of PREPA’s plan of adjustment in the PREPA Title III case, but in no event later than Dec. 31, 2023.
There is also the requirement that the oversight board, PREPA, and WEH collaboratively pursue the Federal Emergency Management Agency (FEMA) administrative appeal process for the reimbursement of certain amounts denied by FEMA, and reduction of accrued interest charges under the WEH contract by $19 million with no further interest accrual from and after date of the execution of the settlement deal provided all payments by PREPA under the settlement agreement are timely and fully made.