Tags: electricity | puerto rico | power grid

Public-Private Partnership Will Serve Puerto Rico's Electricity Needs

Public-Private Partnership Will Serve Puerto Rico's Electricity Needs
A Puerto Rico Electric and Power Authority employee stands in front of high-tension electrical power lines at the Costa Sur power plant in Penuelas, Puerto Rico on January 9, 2020, after a powerful earthquake hit the island.(RICARDO ARDUENGO/AFP via Getty Images)

By Wednesday, 14 April 2021 11:02 AM Current | Bio | Archive

The Biden administration recently stated that it would free up $1.3 billion in aid for Puerto Rico to protect itself against future climate disasters. While it’s true that the island has faced its share of tough luck from acts of nature in recent years, the truth is that Puerto Rico’s power grid was in trouble well before Mother Nature wreaked havoc. Fixing this issue will require meaningful free-market reforms, not mere stopgap measures from Washington.

In July 2017, the Puerto Rico Electric Power Authority (PREPA) defaulted on its debt and was forced to declare bankruptcy on $9 billion in bond debt. Two months later, Hurricane Maria devastated the island. It was the deadliest natural disaster in the last century and took nearly a year to restore power to all Puerto Ricans.

Billions of dollars in taxpayer dollars were spent to restore the grid, but it wasn’t an improvement. It was a Band-Aid. Then-PREPA Executive Director José Ortiz told The New York Times, ''Now we have to redo that thing.''

Less than three years after the hurricane, Puerto Rico was hit with a series of earthquakes that exacerbated the island’s electrical problems. The earthquakes damaged power plants on the island and caused another round of power outages.

Puerto Ricans deserve better. The island deserves a power grid that is modern, maintained, secure, and reliable. Under PREPA, power on the island is unreliable and some small business owners have said they do not know if they will be able to open on any given day due to outages. Even when there is power, PREPA was the worst ranked public utility in the country and rates are more expensive than the national average.

Fortunately, there is some good news for Puerto Ricans.

Last summer, PREPA entered into a public-private partnership with LUMA Energy after a competitive bidding process. As part of this arrangement, PREPA would retain ownership of the system, while LUMA would operate, manage, improve, modernize and maintain the island’s electrical grid.

The chair of the Financial Oversight and Management Board for Puerto Rico, José Carrión, said at the time of the deal, ''The people of Puerto Rico deserve a power system that can withstand hurricanes to ensure they are safe in their homes, and Puerto Rico’s businesses deserve to open every day without relying on backup generators to ensure they can serve their customers.

''Puerto Rico deserves manufacturing and the service industry jobs created by investors who don’t turn away because its electric power system is unreliable and antiquated,'' Carrión added.

Given the circumstances surrounding the energy issue in Puerto Rico over the past few years, a public-private partnership would best accomplish Carrion’s goal.

After the partnership was announced, LUMA said it would not increase rates for at least the first three years of the deal. It has also promised to hire local workers and to prioritize PREPA employees in the hiring process and protect their pensions. In March, LUMA’s CEO said that it had received nearly 15,000 job applications from residents of the island. In April, LUMA started construction of a $10 million training facility.

Gov. Pedro Pierluisi has opposed calls to cancel the partnership. During a March meeting of the Financial Oversight and Management Board, Pierluisi said, ''There is so much bad information out there, unnecessary politicization, against LUMA and it is shocking.'' He went on to say that Puerto Rico needs competent, professional management of its grid. That is certainly an understatement.

Puerto Ricans deserve a better electrical system and the public-private partnership between PREPA and LUMA should deliver it for them. This is a free market solution to a problem that has loomed large for residents of the island for years.

Julio Rivera is a small business consultant, political activist, writer, and Editorial Director for Reactionary Times. He has been a regular contributor to Newsmax since 2016. His commentary has also appeared in The Hill, The Washington Times, LifeZette, The Washington Examiner, American Thinker, The Toronto Sun, PJ Media and more. Read Julio Rivera's Reports — More Here.

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JulioRivera
The Biden administration recently stated that it would free up $1.3 billion in aid for Puerto Rico to protect itself against future climate disasters. While it's true that the island has faced its share of tough luck from acts of nature in recent years, the truth is that...
electricity, puerto rico, power grid
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2021-02-14
Wednesday, 14 April 2021 11:02 AM
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