October 10, 2017 Read More →

Ahead of Hurricane Maria, Puerto Rico Utility Was All But Broke Already

E&E News:

The chief executive of Puerto Rico’s bankrupt electricity company says he did not ask for help from mainland U.S. utilities before and immediately after Hurricane Maria destroyed the island’s grid because the utility couldn’t afford to pay anybody back for equipment and manpower.

Ricardo Ramos, chief executive of the Puerto Rico Electric Power Authority (PREPA), in an interview with E&E News on Saturday said the specter of running out of cash in 60 days made him instead turn to the Army Corps of Engineers, which will fund and control the territory’s electrical recovery.

“The day that the Corps of Engineers showed up and offered the assistance, we immediately accepted because we knew that financially it was a better model,” Ramos said. “The benefit is that I don’t have to spend the remaining dollars that are needed for recuperating the system.”

Puerto Rico’s utility would have been required to make upfront payments or reimbursement guarantees to U.S. utilities sending crews and equipment, Ramos said. He said those payments would have exhausted the utility’s $100 million emergency fund, which is all that remains to keep the utility operating.

The American Public Power Association (APPA) confirmed Friday that the mutual assistance program was not activated after the hurricane hit Puerto Rico on Sept. 20, wiping out nearly all of the transmission and distribution network serving the island’s 3.4 million residents. The mutual assistance program is a critical backstop in grid emergencies, channeling repair crews from outside a stricken area to come to its help.

The fragility of Puerto Rico’s grid was underscored Sunday when a critical substation in the capital of San Juan temporarily failed, causing power to go out in some of the few areas that have it, including the city’s main hospital.

Ramos’ comments raise the question of why a rescue plan for Puerto Rico’s bankrupt electric company, lying dead center in the Florida Straits hurricane alley, was apparently not on the planning docket of the mainland U.S. electric power industry, the Department of Energy, the Department of Defense and the Federal Emergency Management Agency, or Congress.

More: Cash crunch slowed Puerto Rico’s appeal for grid help, CEO says

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