Puerto Rico recovery efforts plagued by power company’s financial troubles

This is the longest blackout in U.S. history.

Five months after Hurricane Maria, 16 percent of Puerto Rico is still without power. Credit: Carolyn Cole/Los Angeles Times via Getty Images.
Five months after Hurricane Maria, 16 percent of Puerto Rico is still without power. Credit: Carolyn Cole/Los Angeles Times via Getty Images.

It’s been five months since Hurricane Maria hit Puerto Rico, and as of Monday, some 400,000 people on the island are still without power. The blackout is considered the longest in U.S. history.

Now, recovery efforts are faced with a new hurdle as Puerto Rico’s power company struggles to find the money to keep operating.

On Monday, a federal judge approved a $300 million loan for the Puerto Rico Electric Power Authority — also known as PREPA — in order to keep it afloat. “The approved financing will provide PREPA with a much-needed lifeline while safeguarding the operation in the near term,” Gerardo Portela, director of Puerto Rico’s financial authority said in a statement.

Officials, however, say this funding will only keep things running until late March and are implementing plans to scale back power generation in a further effort to save money.

Government officials have announced they will be reducing the power company’s operating reserve by 450 megawatts starting this week in order to save $9 million a month. While they claim customers will not be affected by the reduction in power supply, officials did warn that the move could destabilize the U.S territory’s already fragile electricity grid, which took a devastating hit when category 4 Hurricane Maria made landfall last September and destroyed two-thirds of its power systems.

PREPA initially sought a $1 billion loan, however, the federal judge said officials had not provided sufficient evidence that the power authority needed the money. Complying with the judge’s instructions, the federal control board overseeing Puerto Rico’s finances filed a lower request for $300 million on February 16, which has now been approved.

The board noted in its filing that the refined request “will further jeopardize service to customers and leave many customers without power.”

Puerto Rico’s power company has a long history of financial issues. PREPA is $9 billion in debt and, with critically aging infrastructure, the island was experiencing frequent blackouts long before Maria hit.

Last month, Puerto Rico Gov. Ricardo Rossello announced plans to privatize the power company over the next 18 months. The plans were met with criticism, with some saying the decision would further delay the recovery of Puerto Rico’s electricity system and others questioning whether a more resilient grid would be built in its place.

This week’s news has raised fears that the situation in Puerto Rico will return to what it was prior to Maria.

“For many people, it will mean going back to September 20, at least for a few days during the week,” San Juan Mayor Carmen Yulín Cruz told Democracy Now!, referring to the frequent blackouts island residents experienced before the hurricane.

For the time being, power grid troubles have stoked concern about other issues, like health and sanitation; electricity is needed to pump water, for example, which has spawned its own set of problems.

“Without the loan, and given the potential risk to its operations, we have no other responsible option than to begin implementing a limited operational emergency plan,” said Ernesto Sgroi, president of PREPA’s governing board.  “We fear this setback will result in the exacerbation of human hardship as potable water, power for medical procedures, communications, and open schools are at risk of disappearing again.”

PREPA spokespersons did not respond to a request for comment for this article.