January 24, 2018 Read More →

Puerto Rico Governor Seizes Opportunity Created by Hurricane Maria, Plans to Privatize Electric Power

The Intercept:

Puerto Rico’s electric utility, in the wake of Hurricane Maria, was eligible to enter into various mutual aid agreements with other utilities that are commonplace after major disasters. The Puerto Rico Electric Power Authority, known as PREPA, is a member of the American Public Power Association, and through that membership, it could have requested that workers from other utilities come help with grid recovery efforts. It did not.

Instead, PREPA’s leadership entered into several dubious agreements with private contractors. The most famous of these was the since-scuttled $300 million contract with the controversial Montana-based firm Whitefish Energy.

Puerto Rico Gov. Ricardo Rosselló announced on Monday that he intends to privatize PREPA, calling it “a heavy burden on our people, who are now hostage to its poor service and high cost.” The privatization comes at a politically opportune time for Rosselló’s administration, but for the people of the island, the timing could not be worse. Just under 40 percent of the island still lacks reliable power, and there are already persistent management and supply issues between PREPA employees, private contractors, and the federal unified command.

Selling off public assets is a relatively common tactic for right-wing governments and economically troubled ones ensnared in some kind of debt peonage like Puerto Rico. The sales promise a quick injection of cash for ailing state, federal, or municipal budgets. The tradeoff, more often than not, is entrusting services as basic as water or electricity to corporations that aren’t accountable to the people they serve.

One major question is who wants to buy up an island electric system buckling under $9 billion in debt and decades of disrepair. The answer, for Cathy Kunkel of the Institute for Energy Economics and Financial Analysis, is somebody only looking to squeeze short-term profits. She predicts that private equity firms could be among those who swoop in, as they have in the case of some flailing coal-fired generators on the U.S. mainland. If they do, they’d be just the latest in a string of disaster capitalists to come to Puerto Rico in search of a quick buck, the most notorious culprits being the Wall Street banks who engineered potentially illegal forms of debt that deepened the island’s economic crisis.

Puerto Rico Governor Seizes Opportunity Created by Hurricane Maria, Plans to Privatize Electric Power

Posted in: IEEFA In the News

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