June 21, 2018 Read More →

Puerto Rico moves forward with utility privatization

NBC News:

Puerto Rico is officially moving to privatize and upgrade its outdated power grid exactly 9 months after it was flattened by Hurricane Maria.

At a press conference on Wednesday, Governor Ricardo Rosselló signed into law the approved legislation that allows parts of the Puerto Rico Electric Power Authority—known as PREPA in English and by the acronym AEE in Spanish—to be sold to private entities.

The power authority has been a monopoly that practically abandoned maintenance of the electrical system’s infrastructure over the past decade. Over the last five years, the financially strapped entity was operating with a third of its employees, and these were mostly workers in charge of the grid’s maintenance.

During his announcement, Rosselló described Puerto Rico’s current power system as an expensive, oil- dependent, polluting grid that’s three decades older than an average U.S. electrical utility. He said a combination of these factors have hurt economic development efforts in the island for years, so he hopes to change the pattern with the newly signed law. The governor explained that privatization efforts are taking place in two stages: power generation and distribution.

“In terms of generation, we’re going to the market to either privatize it or develop a public-private partnership,” Rosselló said. In terms of the power distribution, he said that ideally “the assets would belong to the state and a consortium of companies would be handling the distribution.”

According to Rosselló, the Puerto Rican government has 180 days to “stipulate public policy” that would guide PREPA’s privatization process and detail “the energy model we aspire to have in Puerto Rico”. Puerto Rico’s Legislature is expected to maintain control of the process that would establish and approve PREPA sales contracts. Contracts are set to be evaluated in 45 days or less. Once approved by both senators and representatives, board members of the island’s Authority of Public-Private Partnerships will have the final decision on how assets will be assigned and distributed.

More: Puerto Rico’s new law moves to privatize power grid nine months after Hurricane Maria

Comments are closed.