Wed, Jan 24, 2018 - Page 7 News List

Puerto Rico moves to privatize troubled electricity company


Puerto Rico’s governor on Monday announced that he is moving to privatize the US territory’s public power company after its slow, troubled recovery from Hurricane Maria focused new attention on longstanding accusations of mismanagement and corruption.

Nearly 30 percent of customers on the island of 3.3 million people remain without power more than four months after Hurricane Maria. Many blame the failings of the Puerto Rico Electric Power Authority (PREPA).

Its director was forced out in November last year after the utility failed to immediately call for help from its mainland counterparts after the storm.

Instead, PREPA granted a power-restoration contract to a little-known company that the utility was later forced to rescind.

PREPA was also blamed for the failure to distribute badly needed parts found in one of its warehouses even as repairs went undone for lack of supplies.

Founded in 1979 as a public utility run by appointees of the Puerto Rican governor, PREPA is worth about US$4 billion and has US$9 billion in debt and years before Maria’s September last year landfall the company was criticized for political patronage and inefficiency.

The firm was also beset by frequent blackouts, including an island-wide outage in September 2016.

“The Electric Power Authority has become a heavy burden for our people, who today are held hostage by its poor service and high cost,” Puerto Rican Governor Ricardo Rossello said.

“The deficient and obsolete system of generation and distribution of energy is one of the great impediments to our economic development,” Rossello added.

Power bills on the island have long been double the average of those on the US mainland, in part because imported petroleum products supply three-fourths of the energy consumed in Puerto Rico, according to the US Energy Information Administration.

Because PREPA is bankrupt, a federal judge would have to approve the sale, in addition to the Puerto Rican House of Representatives.

“It’s sad that they’ve waited so long to do this,” economist Gustavo Velez said.

“If they find not only a good buyer, but a good operator that invests the money that is needed, that clearly is very good news,” he said.

Puerto Rican House of Representatives Majority Leader Carlos Mendez said he would ensure the body backs the governor’s objective.

“Either we remain as we are, or we take the decisions needed to push Puerto Rico ahead and lift our economy up once again,” Mendez said.

Puerto Rican Senate President Thomas Rivera Schatz was more reserved, saying he would analyze the proposal and make sure that any changes guarantee an “adequate, efficient and affordable” electrical service for all Puerto Ricans.

Schatz also pledged to protect the utility’s workers as the island struggles with an unemployment rate of 10 percent.

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