Puerto Rico Wants to Hand Its Energy Crisis Over to the Private Sector

Illustration for article titled Puerto Rico Wants to Hand Its Energy Crisis Over to the Private Sectorem/em
Photo: AP

Puerto Rico is finally taking its energy system private. Gov. Ricardo Rosselló signed a bill Wednesday to sell pieces of the Puerto Rican Electric Power Authority (PREPA). The system’s been in shambles since Hurricane Maria hit last year, and this is seemingly the governor’s final attempt to salvage it.

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This move doesn’t come as a surprise; Rosselló announced his intention to privatize parts of PREPA back in January. He signed the bill in front of a backdrop of solar panels in Isabela, Puerto Rico—an ode to what he hopes this law will further. “This plant is a microcosm of what we’re doing here today,” he said at the press conference, speaking of his idea “transform” the island’s energy system.

This bill-turned-law opens the door for the authority to accept contracts and offers from private companies to sell or transfer any assets. Even specific operations or services—like repairing power lines, for instance—are on the table for private entities to take on temporarily or permanently.

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PREPA won’t become entirely private, but at this point it’s unclear what parts would remain public. It’ll likely depend on future negotiations. The privatization, meanwhile, will prioritize power generation and distribution.

The governor champions this law as a way to reduce energy costs for people on the island. “Today, our destiny will be one where the quality of life improves because the energy cost drops, the quality of energy improves, and the impact on the environment improves,” he said at the press conference.

But critics are worried by the fact that the law ignores PREPA’s whopping $8 billion debt. “The buyer can decide during negotiations it doesn’t want anything to do with the debt,” said Lionel Orama, a founding member of the National Institute of Energy and Sustainability at the University of Puerto Rico, to Earther. Ultimately, he thinks Boricuas will eat that cost. “The question is how,” he said.

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Orama recognizes how wonderful the bill sounds on paper. Affordable energy access for all that prioritizes renewables? Fucking paradise compared to a shaky, outdated grid that sees a catastrophic blackout every so often. But he also points out the law doesn’t feature an enforcement mechanism to ensure that companies meet any requirements or standards previously set forth by the Puerto Rico Energy Commission. These have encouraged affordable renewable energy production and energy efficiency, as well as helped push forth microgrids.

Now the commission will have 15 days to evaluate any proposed contracts between companies and PREPA—a timeline that made Orama scoff.

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“That’s a joke,” he said. “These contracts aren’t a few pages. They’re hundreds.”

The energy problem on the island is complicated. It didn’t begin with Hurricane Maria; it only got worse. For Orama, selling the authority responsible for it off is more of a band-aid than a solution. If a government didn’t find it economically feasible to return power to a community after the hurricane—the grid remains shaky, and some mountain towns still don’t have power—how can the public expect a private company to do so?

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“Now, there are going to be people who won’t have power because it won’t be convenient for the company,” Orama speculated.

Of course, we can’t know what the future energy landscape will look like until the contracts start rolling in. But to Orama and many others? Energy—like water and sewage—is a public service. And such services lose that privileged essence when they enter private hands.

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Yessenia Funes is climate editor at Atmos Magazine. She loves Earther forever.

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DISCUSSION

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Good stuff, Yessenia. Keep on this like a pitbull on a T-bone. Privatization of a public function be it street parking, highways, public transit, waterworks or electricity usually ends up screwing the users (you, me and everyone we know) and benefiting the privateers (banks, suppliers, operators). If you’re worried about bankers, please don’t they’ll be fine.

The entire purpose of public private partnerships (three Ps or 3P) is to put the risk on the public and the reward on private - under the guise of corporate efficiency and libertarian tech dogooderism. Oh, BTW if it doesn’t come across like I think privatization is bullshit, let me make it clear - it’s bullshit. With one exception - that the public is well informed about the privatization process and the public’s representative isn’t interested in fucking over the public. The opportunity for opportunistic politicians to make major bank on 3P deals is staggering. The world has no shortage of assholes of all types spread out all over the place

From above:

PREPA won’t become entirely private, but at this point it’s unclear what parts would remain public. It’ll likely depend on future negotiations. The privatization, meanwhile, will prioritize power generation and distribution.

Here’s what this means figuratively (a figure):

The public will get stuck with the shit the private don’t want. So we’ll be hearing about green tech companies coming in and saving the day with renewables. This could be utility scale solar to replace a coal plant or distributed solar on roofs.

However, this still won’t be enough. All that shit between the power plant (of any kind) and the pole drop (at the little house on the right) is what will be stuck with the public (PREPA). Transmission or the shit in the middle of the figure is what may get stuck with PREPA and is costly to maintain.

In summary...

Puerto Ricans might see their electricity rates skyrocket. However, there will be awesome public relations photo shoots for the 3P showing cute Puerto Rican children playing around wind, solar, natural gas cogen, etc - while their parents have to find a second job to pay the electricity bills.