October 26, 2017 Read More →

Puerto Rico’s Governor Resists Call for Federal Supervision of Electricity-Grid Recovery

Reuters:

The federal board overseeing Puerto Rico’s finances said on Wednesday it intends to appoint an outside manager to lead the island’s power utility, PREPA, in cleanup efforts following Hurricane Maria.

But Puerto Rico’s government is pushing back on the move, and may challenge it in court as an unauthorized power grab, according to a source familiar with Governor Ricardo Rossello’s thinking.

The board, in a written statement, announced “intent to appoint” retired U.S. Air Force Colonel Noel Zamot as PREPA’s chief transformation officer.

Zamot, who has worked with the board in a separate capacity, would be responsible for expediting reconstruction efforts, the board said.

U.S. lawmakers have criticized PREPA’s hiring of Montana-based Whitefish Energy Holdings to help fix the island’s power grid, decimated when Hurricane Maria made landfall on Sept. 20. Some Congress members were concerned that Whitefish was hired without a bidding process, and despite the fact that the two-year-old firm had only two full-time employees.

The controversy reawakened feelings among lawmakers and Puerto Rican investors that officials at PREPA are not competent to lead the quasi-public utility, whose $9 billion debt load pushed it into bankruptcy in July.

The storm cut power to the entire island. As of Monday, just 18 percent had been restored, according to U.S. Department of Energy data.

The board’s announcement on Wednesday was also reigniting an ongoing power struggle between Puerto Rico’s government and the board appointed last year to manage the island’s precarious finances.

Created under a federal Puerto Rico rescue law known as PROMESA, the board is to help Puerto Rico regain access to capital markets after it filed the largest-ever U.S. government bankruptcy in May.

More: Puerto Rico oversight panel seeks outside manager for power utility PREPA

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