Puerto Rico will privatize electricity production in the event of a blackout

Puerto Rico will privatize electricity production in the event of a blackout

Puerto Rico will privatize electricity production in the event of a blackout

SAN JUAN, Puerto Rico (AP) — Puerto Rico on Sunday announced plans to privatize power generation, a first for a U.S. territory that faces chronic blackouts as it struggles to rebuild a crumbling power grid.

The move marks the beginning of the end for Puerto Rico’s Electric Power Authority, a giant long accused of corruption, mismanagement and inefficiency that holds some $9 billion in public debt – the largest of any agency governmental.

Many Puerto Ricans already furious and weary from the power outages were wary of the announcement, as serious complaints about the length of the outages, expensive electricity bills and other issues were raised after the government of the island privatized electricity transmission and distribution in June 2021.

Fermín Fontanés, executive director of Puerto Rico’s Public-Private Partnerships Authority, said the board unanimously approved the privatization of production, including members who represent the public interest.

It was not immediately clear which company they had chosen to take over power generation. A spokeswoman for the authority said the contract was not yet public, in accordance with local laws.

Fontanés said the contract would be sent to the Puerto Rico Electric Company’s board of directors and then to the territory’s governor for his signature. The contract is expected to be approved despite opposition to privatization.

Carmen Maldonado, vice president of the main opposition People’s Democratic Party, said she and others would fight the plan.

José Luis Dalmau, party member and president of Puerto Rico’s Senate, said lawmakers would review the process and demand that workers at the public power company be protected, the grid be stabilized and the number of outages be reduced. reduced, among others.

He noted that Puerto Ricans are appalled by the current situation and are demanding a more reliable and economical electricity system: “The necessary transformation of our…system is a priority.”

It was not immediately clear what effect, if any, the privatization would have on the so far unsuccessful efforts to restructure the power company’s debt, as the government and some creditors went to court after several rounds of debt talks. unsuccessful mediation.

The push to privatize production comes as Puerto Rico’s House and Senate Speakers battle a contract extension recently awarded to Luma, a consortium made up of Calgary, Alta.-based Atco and Quanta Services. Inc. of Houston, which operates electricity transmission and distribution. across the island.

The presidents went to court last week against the governor of Puerto Rico, who supports the contract extension, and are demanding a judge terminate the contract amid complaints against Luma.

Puerto Rico’s power grid was flattened by Hurricane Maria, a Category 4 storm that hit in September 2017, but was already weak due to a severe lack of investment and equipment maintenance for decades. decades. Its production units are on average 45 years old, twice that of those on the American continent.

Efforts to rebuild the network only recently began, with only emergency repairs carried out in the years since Maria.

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