Fiona exposes Puerto Rico’s failure to fix the power grid

When Hurricane Fiona hit Puerto Rico on Sunday, it killed at least one person, washed away bridges and roads, tore off roofs and sent more than 2,100 people to emergency shelters. It was also revealed how sick the island’s electrical infrastructure is.

Even before the storm reached the southwestern tip of the island, it caused a general blackout that affected the entire area of ​​3.1 million. Luma Energy said it had restored power to more than 100,000 of its 1.5 million customers.

The power outages come as the Puerto Rico Electric Power Authority, known as PREPA, faces bankruptcy with no end in sight. Court-ordered mediation to reduce the company’s $9 billion debt broke down on Friday – hours before Fiona’s arrival – opening the door to lengthy and expensive litigation with bondholders.

For many, the blackout is a reminder of the dark days when Hurricane Maria hit Puerto Rico in 2017 as a Category 4 storm. Maria claimed nearly 3,000 lives, knocked out the power grid and left vast areas of the island in darkness. It took nearly a year to fully restore power.

Yajaira Vargas, 56, was selling tripe and chicken soup from the back of her car in San Juan’s Barrio Obrero on Monday morning as Fiona continued to shower in the capital. He was without power for over a month after Hurricane Maria. Although Fiona was tame in comparison, Vargas doesn’t believe her strength will recover quickly.

“I’m not going home until I sell all of this because it needs to be refrigerated and I’m not going to let it go bad,” she said, pulling the soup out of the fridge. “You never know when the light will come on.”

Since Maria left, the federal government has allocated $9.5 billion to repair the system, and the island has privatized control of electricity transmission and distribution.

But problems persist: The island still has the most expensive and least reliable electricity of any U.S. jurisdiction, and blackouts are common, even without storms. On a clear, windless day in April, a fire at an outdated substation caused an island-wide blackout that took days to recover from.

And federally funded projects, while vital and huge, move at a glacial pace. According to FEMA Associate Administrator Anne Bink, only about $40 million of the billions earmarked for the electric grid has been paid out.

The slowness is not limited to the island’s electrical authorities. Only 2 percent of the $21 billion FEMA earmarked for public assistance projects in Puerto Rico has been spent, said Chris Currie, director of the Homeland Security and Justice Group (HSJ) at the Puerto Rico Transfer Office (HSJ).

Speaking before Congress last week, Currie said a lack of trained personnel and the Puerto Rican government’s failure to match funds is slowing the flow of federal aid.

“These federal dollars aren’t just essential for rebuilding damaged projects,” he said. “They are essential to Puerto Rico’s economy for years to come. That’s a big part of their projected GDP, and I think it’s very important that we continue to monitor them.”

Much will depend on the performance of a private consortium of Luma, Atco Ltd. and Quanta Services Inc., working with Innovative Emergency Management Inc. The company won the 15-year contract, which has an estimated value of $1.5 billion, with the promise that it could free up federal funding and speed recovery.

But 15 months after the deal, resentment is growing. According to a recent report by the Center for a New Economy (CNE), a local think tank, Luma has not improved service or reduced costs since taking over. The ongoing power outage has sparked massive protests from disgruntled customers. Global pop star Bad Bunny often criticizes Luma during his sold-out concerts. A powerful faction in Puerto Rico’s legislature, including House Speaker Rafael Hernández, is trying to dissolve the treaty.

Luma has denied any failure in its work, blaming most of the problems on its predecessor, PREPA, which continues to control power generation.

“The transmission and distribution system inherited by Luma has been weakened by years, if not decades, of poor design, little or no maintenance, lack of proper monitoring, and other profound failures that continue to affect the overall stability and reliability of the system.” Shay Bahramirad, Luma’s vice president of engineering, told the US Congress last week.

Crews were busy assessing the damage on Monday as police said they found the body of a 58-year-old man swept away by the river in the town of Comerío. Agriculture Minister Ramón Gonzále told the newspaper El Nuevo Día that crop losses are likely to be “in the millions”.

While Luma Energy was just beginning to assess the damage, it also warned that it could take “several days” to fully restore power.

Energy problems are more than an inconvenience: they are an existential threat to the island’s economy, said Yandia Pérez, executive vice president of the Puerto Rico Manufacturers Association.

“With expensive, inefficient and dirty energy, we cannot promote industry, let alone sustainable economic development of the island,” he said.

A lack of reliable energy and a sluggish economy have caused a historic population exodus. Between 2010 and 2020, the island lost 12 percent of its population, most of which moved to the continental United States.

Affordable and reliable energy is vital to the recovery of Puerto Rico’s economy and population, said John Ceffalio, senior analyst for municipal government research at CreditSights.

Puerto Rico has a “once-in-a-generation opportunity to use federal funds from FEMA to rebuild and make its grid more resilient as a result of Hurricane Maria mitigation,” Ceffalio said. “It is crucial for the future of the island that this is taken advantage of soon and a modern electrical distribution system is rebuilt.”

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