PREPA, FEMA & Cobra disagree on payments for post-hurricane work

By THE STAR STAFF

The Puerto Rico Electric Power Authority (PREPA), Cobra Acquisitions and the Federal Emergency Management Agency (FEMA) continue to disagree over millions of dollars in charges for work to restore the island electrical grid destroyed by hurricanes.

The information appears in a recent joint status report submitted to the federal Title III court overseeing PREPA’s bankruptcy.

Specifically, the payments are for work performed by Cobra in the wake of damage caused by hurricanes Irma and Maria in 2017 and Hurricane Beryl in 2018. Those payments were delayed following criminal charges against former Cobra President Donald Ellison, who ultimately pleaded guilty to offering gratuities to a FEMA administrator in exchange for a contract.

eligible for reimbursement.

FEMA found Cobra is owed $233.7 million under a different part of the contract -- $68.1 million less than Cobra invoiced -- and paid PREPA $210.3 million of that amount.

PREPA paid $130.2 million to Cobra, and the rest depends on PREPA’s internal review. PREPA disputes about $20 million.

Given the intention of the parties to begin mediation sessions in the coming weeks to resolve PREPA’s bankruptcy, the government, meanwhile, wants to maintain a litigation stay through at least Oct. 31 to allow mediation to proceed and, it is hoped, yield a settlement.

Cobra contends that avoiding setting a litigation schedule is precisely the wrong tack to take, the report says.