WASHINGTON -- Puerto Rico Gov. Ricardo Rosselló announced Monday
he will privatize the island's crippled, broke and decrepit
electric energy authority, which he said has become a heavy
burden to residents and has been hampering economic recovery.
Rosselló painted a bleak picture of the Puerto Rico Electric
Power Authority – known as PREPA in English and by the acronym
AEE in Spanish – that has yet to be able to return to full power
generation four months since Hurricane Maria thrust the island
"The Electric Power Authority has become a heavy burden for our
people, who today are hostage to (its) poor service and high
cost. What we know today as the Electric Power Authority does
not work and cannot continue to operate like this," he said.
The system is 28 years older than the average electrical utility
in the United States, oil dependent, expensive and polluting,
Rosselló said in a televised speech.
The power authority has been a monopoly that practically
abandoned maintenance of the electrical system's infrastructure
over the past decade and has provided poor service at a high
cost as energy demand has dropped. Nearly a third of its
employees have left the authority over the past five years, most
of whom worked in maintenance and operation of the electric
system. It's $9 billion in debt.
"With that authority, we cannot face the risks of living in an
area of high vulnerability to catastrophic events, such as the
recent hurricanes," Rosselló said in his speech.
Rosselló said the planned transformation will begin in the next
few days with legislation, followed by a call for companies to
submit proposals and bids. It will finish with the hiring of
selected companies. That process should take about 18 months, he
"We are taking a step towards a consumer-centered model, where
you can have options, an innovative model that is sustainable,
with advanced technology and resilient before the ravages of
nature," he told Puerto Ricans. "It should be financially
viable, at a lower cost to you. This will be the leap towards
the modernization of Puerto Rico."
The destructive winds of Hurricane Maria, clocked at 155 miles
per hour at landfall making it a strong Category 4 hurricane,
knocked out electricity to the entire island when it hit Sept.
20. It ripped down wires and toppled electrical posts, bending
some and slicing others in half.
Puerto Rico reported that as of Monday, the electrical authority
was at 84 percent power generation, with about 67.6 percent of
its customers with power. Since the hurricane, many residents
have had to rely on diesel-fueled generators, forcing them to
dole out cash for diesel fuel to keep them running.
Rosselló said the privatization will not only modernize Puerto
Rico's electrical grid but allow for reaching a goal of more
than 30 percent of renewable energy generation.
Federico de Jesús, a Washington political consultant who is a
former deputy director of the Puerto Rico Federal Affairs
Administration, said the privatization could be a positive for
Puerto Rico. He said the generation portion of the electrical
authority should be broken up so there is competition on the
generation side and the public retains the distribution side. It
should be decentralized, make as much use of renewable energy as
possible and have strong independent oversight from an energy
commission "that has enough teeth to do its job."
"Any new model should include micro grids and strong
infrastructure investment that makes Puerto Rico's economy more
competitive and the grid more resilient," de Jesús said. "If
that's the ultimate outcome, then the governor's decision will
have been the right one."