Page 12 - ARUBA TODAY

A12 WORLD NEWS
Wednesday 24 January 2018

Hope, fear as Puerto Rico moves to privatize power company

She said her main con- ernor's measure, then Gov.
cern is that the privatiza- Ricardo Rossello said his
tion process could occur administration will monitor
without the presence of a the market and start ac-
regulatory body, which is cepting offers from those
needed in part to look af- interested in buying the
ter consumers' interests on power company's assets.
an island where power bills He said privatization would
have been double the av- both improve service and
erage of those on the U.S. lower power bills, and he
mainland, in part because predicted it would lead to
imported fuel supplies more investment in renew-
three-fourths of the energy able energy projects.
consumed in Puerto Rico, Rossello said the electri-
according to the U.S. En- cal grid is not designed for
ergy Information Admin- Puerto Rico's current needs,
istration. The terms of the noting that the greatest
contract will determine the demand exists in the north-
interest, Kunkel said, noting ern part of the island while
In this Oct. 19, 2017 photo, a brigade from the Electric Power Authority repairs distribution lines that the cost of any new the main generation plants
damaged by Hurricane Maria in the Cantera community of San Juan, Puerto Rico. The announce- investment in the electrical are in the south. In addi-
ment that Puerto Rico’s governor is moving to privatize the U.S. territory’s public power company system will be paid by con- tion to its aging infrastruc-
has many on the island of 3.3 million people asking whether this will finally bring them more af-
fordable electric bills and more reliable service. sumers. "Private investors ture, the company known
(AP Photo/Carlos Giusti) will want to make a profit," by its initials PREPA has lost
she said. "But you have to 30 percent of its employ-
SAN JUAN, Puerto Rico (AP) pany once known as the power company a 0.5 per- contrast that with the waste ees in the last five years, 86
— One of the largest public government's crown jewel cent municipal tax even and mismanagement that percent of whom worked
utilities in the U.S. might soon has seen a reduction in em- though some municipali- the (power company) has in maintenance, he add-
be up for sale, but many ployees and a drop in the ties granted them a lower shown over the years." ed. The company also has
wonder who would want demand for energy amid rate or waived the tax alto- Any sale would have to faced internal turmoil. Its
to buy a power company a deep economic crisis gether. Authorities say the be approved by a federal director was forced out in
that is $9 billion in debt and and recent austerity mea- charge was then passed judge because the power November after the util-
has an infrastructure nearly sures. The agency now has on to consumers. Given company entered a bank- ity failed to immediately
three times older than the some 5,800 employees and that situation, can the U.S. ruptcy-like process last call for help from its main-
industry average. serves nearly 1.5 million cus- territory attract any takers? year, and approval is first land counterparts after
Concerns also are grow- tomers with infrastructure Industry analysts say it's a needed from legislators, Hurricane Maria. Instead,
ing about whether plans that is roughly 45 years old, bit too early to tell, noting which is unclear will hap- PREPA granted a power-
to privatize Puerto Rico's which officials say caused that it all depends on the pen. Puerto Rico Senate restoration contract to a
Electric Power Authority frequent power outages type of measure the gov- President Thomas Rivera little-known company that
will translate into more af- before the hurricane and ernor expects to submit in Schatz said Tuesday that the utility was later forced
fordable electric bills and an island-wide blackout in upcoming days to start the he will study the upcoming to rescind. Most recently,
more reliable service, with September 2016 that lasted privatization process. "It's measure to ensure it's in the PREPA was blamed for the
people in the U.S. territory a couple of days. a complicated arrange- best interest of Puerto Rico failure to distribute badly
saying they cannot afford The company also has ment: What's going to hap- and no one else. "Privatiza- needed parts found in one
another financial blow as long been criticized for pen to the workers? Where tion can be a great tool, of its warehouses even as
they struggle to recover political patronage and is the debt going to land? but it is not a magic wand," repairs to the storm-dam-
from Hurricane Maria amid inefficiency, and recently What are the contracts go- he said, noting that Puerto aged power system went
an 11-year recession. faced accusations of cor- ing to look like? There are Rico once privatized its wa- undone for lack of supplies.
"Some people have faith ruption. In June 2016, the a lot of details here that ter and sewer company Monday's announcement
that privatization will im- owner of the U.S. territory's have very real implications only to have the govern- by Rossello comes as more
prove everything, but it's biggest oil supplier was ar- on how much electricity is ment take it back in the than 30 percent of custom-
not a guarantee," said rested after being charged going to cost for Puerto Ri- early 2000s after problems ers remain without electric-
Puerto Rico economist Jose with misappropriating $11 can customers," said Cathy with service, billing and ity more than four months
Caraballo. "If a good deal million in public funds. Jose Kunkel, an energy analyst quality requirements set after Hurricane Maria, and
isn't hammered out, Puer- Gonzalez Amador and his with the Ohio-based Insti- by the U.S. Environmental critics say he took advan-
to Rico can end up worse company, PetroWest, are tute for Energy Economics Protection Agency. If leg- tage of that situation to
than it is." The power com- accused of charging the and Financial Analysis. islators approve the gov- rally support for his plan.q