The Oklahoman Examines Mammoth's Efforts to Receive Payment for Recovery Work After Hurricane Maria

A lengthy Sunday expose by The Oklahoman documents Mammoth’s efforts to fight for the funds it is rightfully owed for its efforts rebuilding Puerto Rico after Hurricane Maria. The entire story is available on The Oklahoman web site HERE and below are a few key excerpts:

Energy company after pay through politics

The Oklahoman
Jack Money The Oklahoman
6 February 2022

Puerto Rico's residents were dealt a horrific one-two punch of hurricanes in 2017.

In September of that year, the island territory of the United States was hit by two significant hurricanes — first Irma, where winds and flooding left an estimated 1.1 million customers served by the island's electrical system in the dark, and then Maria on Sept. 20, which essentially destroyed what Irma had spared.

By the time Maria moved on, only 11 of Puerto Rico's 69 hospitals had power, less than half of its 3.3 million residents could access potable water, cell service was out across most of the island and only about 5% of the territory's electrical system was operational.

Estimates at the time calculated the nation sustained more than $90 billion in damages, leaving the U.S. government, territorial entities and residents facing a monumental challenge to recover.

As the U.S. Federal Emergency Management Agency (FEMA) and numerous nonprofits responded to help the territory get back on its feet, they hired businesses that could assist in those efforts.

Oklahoma's Mammoth Energy responded to that call by bidding on needed work to help restore the territory's electrical transmission and distribution grids, with subsidiary Cobra Acquisitions ultimately landing about $1.3 billion worth in projects to replace poles, towers and lines along routes crossing some of the island's most difficult terrain.

Now, more than four years later, Mammoth remains locked in a battle with the territory's power authority to recover about $325 million ($230 million, plus accrued interest) in what the company says it is still owed.

At the end of 2021, its executive team opted to raise the profile of its disagreement to a political level, launching a digital advertising campaign targeting members of Congress and their staffs which states, "It's time for Congress to tell PREPA (the Puerto Rico Electric Power Authority) to pay its bills."

Mammoth details work in campaign for pay

The company created a website to promote its arguments, including one that details how Hurricane Maria brought the Oklahoma-based company to the territory and the work it did.

Another page highlights testimonials from government officials and the RAND Corporation validating the initial quality and value of the work the company completed.

The company also created a web-based video urging Congress to stand up for Mammoth in its efforts to get paid what it believes it is still owed, and also created a web page encouraging Mammoth's employees to contact Congress directly about the company's plight.

The stalemate has been hard on the company because it has contributed toward cuts in Mammoth has had to make in services and staff anyway because of a larger downturn in the energy industry, Mammoth CEO Arty Straehla said.

"It hurts the most because you have to lay off people, and it hurts our ability to reinvest in our business, changing the trajectory of growth that we could have pursued if we had been paid," he said.

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Meanwhile, one oversight board member who has met with Straehla remains very concerned about Mammoth's plight.

"The board is tasked with restructuring Puerto Rico and PREPA's debts and to implement reforms (like the privatization of PREPA's electricity transmission/distribution systems)," said Justin Peterson, who was appointed to the board by President Donald Trump in 2020.

"PREPA has a long history of not paying its bills," Peterson said, referring to its ongoing bankruptcy case as proof. "Here is an example of a great American company that stepped up after the hurricane to help, went over and above in deploying resources to service the contract, is out millions of dollars and PREPA is refusing to pay.

"I want to use my platform as a member of the board to bring awareness to this case, because what is happening to Mammoth is wrong. I am not interested in supporting the allocation of any additional dollars to PREPA until they start paying what they owe."

Electrical service still questionable in Puerto Rico

Reliable electrical services continue to elude Puerto Ricans, even today.

A page dedicated to the territory's energy profile by the U.S. Energy Information Administration (EIA) states its electric power sector has suffered from decades of mismanagement and underinvestment and, most recently, from natural disasters including the 2017 hurricanes and other storms and natural disasters that followed.

While power generating facilities on the island were not as badly damaged as the electric grid by Maria, its configuration remains problematic because its largest generating plants are on the south, while its largest population concentrations are in the north, the EIA profile states.

That makes sustained operations involving its 2,400 miles of transmission and 30,000 miles of distribution lines critical to reliable service.

The issue has been further complicated by a change in federal law making it possible for a private company to take over operations on the transmission and distribution grids, while leaving the system's generating stations under the control of PREPA.

Periodic large outages since that transition last year have prompted residents to protest in the streets.

Meanwhile, Mammoth's leadership team said this week its experiences in Puerto Rico have in no way prompted a change in its thinking about doing the same types of projects in the future.

"Since 2017, Mammoth subsidiaries have been proud to offer our assistance to many post-disaster projects, including after the recent tornadoes in Kentucky, and will continue doing so in the future. Our men and women work hard, often under very strenuous conditions, to get communities and lives back on track.

"With the exception of Puerto Rico after Maria, we have been compensated under the agreed-upon terms for each and every one of them, and that is the issue at stake here," Straehla said.