October 31, 2017 Read More →

Governor’s Politics Are Interfering With an Already Slow Recovery in Puerto Rico

E&E News:

The outlook for the restoration of Puerto Rico’s ravaged power grid took a backward step after Gov. Ricardo Rosselló hinted he would challenge the appointment of an emergency manager for grid recovery that was announced Wednesday by the bankrupt island’s federal oversight board.

The Puerto Rico Financial Oversight and Management Board, which Congress established to oversee the U.S. territory’s fiscal crisis, had moved to wrest control of the halting grid recovery efforts away from the island’s utility, the Puerto Rico Electric Power Authority (PREPA), which reports to Rosselló.

But in a combative statement following that announcement Wednesday, Rosselló asserted that the management of Puerto Rico’s public companies “rests exclusively on democratically elected officials,” potentially setting the stage for a legal tussle over the utility’s future.

The board picked its revitalization coordinator, Noel Zamot, a retired Air Force colonel and native Puerto Rican, to serve as “chief transformation officer” for emergency power restoration and future, undefined efforts to build a more modern, resilient power network on the island.

If the governor takes the issue to court, it will set up conflict with the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), enacted by Congress in June 2016.

If the governor battles the federal oversight board’s choice for new leadership at PREPA, it will get no support from PREPA’s electricity workers’ union, the Unión de Trabajadores de la Industria Eléctrica y Riego (UTIER).

The head of the union, Ángel Figueroa Jaramillo, said in an email that federal overseers are legally able to unseat PREPA’s board and its CEO. “This action by [PROMESA] confirms UTIER’s denunciations of the bad management, corruption and incompetence of the management and of Ricardo Ramos during the emergency occasioned by Hurricane Maria,” Jaramillo wrote.

Tom Sanzillo, finance director for the Institute for Energy Economics & Financial Analysis in Puerto Rico, a business and environmental advocacy group, said “I think the board’s authority to do this [appoint Zamot] is pretty explicit.”

The PROMESA legislation gave the oversight board authority to oversee Puerto Rico’s “public agencies,” which would define PREPA.

Rosselló needs to see the oversight board as his partner, not his opponent, Sanzillo added.

“There are times when a governor has to draw a line” with Washington, said Sanzillo, former acting comptroller of the state of New York. “But this is a fight over something that screams out for oversight. He’s trying to defend a system that has produced one bad contract and one bad decision after another. He’s just wrong.”

More: Tensions build over control of Puerto Rico utility

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