PREPA authorities repair transmission lines in Rincon, Puerto Rico. Source: author(2018).

Rewiring Puerto Rico: Power and Empowerment After Hurricane Maria

Disasters unravel — infrastructures, institutions, societies, and assumptions.

The 2017 Atlantic Hurricane Season brought forth multiple storms that not only stripped trees bare and dismounted roofs, but it also caught the Caribbean and Gulf Coast unprepared for the magnitude of destruction that such storms could bring, despite the best efforts of the messengers. Nearly half a year after the last hurricane season and half a year away from the onset of the next one, stories about the damage that Hurricane Irma and Maria caused have become hauntingly familiar. The stories less often told, though, are those about the long-term recovery efforts that have inevitably followed since the seas have calmed and the winds have died down.

In Puerto Rico, Hurricane Maria decimated the electrical grid, leading to subsequent failure of telecommunications systems, water filtration plants, emergency services, and economic activity. Millions of people lived without power — some for days, others for weeks, and others for months — and were left to rewire, arms outstretched in the dark. But Puerto Rico’s rewiring encompasses more than just restoring its generators, and it extends beyond the reach of transmission and distribution lines. Hurricane Maria’s sobering effects on its energy sector have demanded serious reflection on behalf of policymakers, communities, NGOs, universities, and the private companies to challenge pre-hurricane energy systems, regulatory frameworks, ownership models, and financing mechanisms. While there is consensus that the grid infrastructure was aging and in disrepair before Hurricane Maria even hit[1], and that it should be made more resilient for the future[2] [3], there is far less concordance around how to do it, amongst competing motivations and value systems imbricating actors within the energy stakeholder pool. The impulse to rebuild infrastructure has come in tandem with the need to attract new capital to the island, motivating the current state government to pursue a strategy to privatize the electric utility over the next year and a half. In no simple terms, this strategy has been met with frenetic reactions, ranging from rejection to rapport.

However, in order to understand Puerto Rico’s process of rewiring, one must also understand its complex (and rather circuitous) history of privatized utilities. Further, in order to understand the restoration of the island’s power in the electrical sense, one must also understand the island’s constitutions of power in the political sense — namely, the ways in which the very processes meant to direct recovery and healing can disempower individuals and groups.

As a doctoral researcher who studies disaster risk reduction planning on urbanized islands, I have found myself in Puerto Rico multiples times both before and after the storm, over the course of the past three years. This semester at MIT, I am TA-ing an urban planning course (11.381 Infrastructure Systems in Theory and Practice) with Professor David Hsu focused on the recovery of Puerto Rico’s electrical grid, post-hurricane. The following article is motivated by our class, as well as the watershed moment that Hurricane Maria has brought across all sectors in Puerto Rico, but most visibly, energy. Here, I attempt to make sense of the dynamic and as-yet evolving social processes behind the configuration of the future of Puerto Rico’s grid. Embedded within these processes is a narrative that is as much about electrons as it is about elections, charged with myriad intentions from all fronts. Who stands to gain and who stands to lose from the decisions surrounding the grid’s reconstruction remains the primary, paralyzing set of questions.

PRIVATIZATION: NOW AND THEN

In January 2018, Governor of Puerto Rico Ricardo Rosselló proposed a privatization model for the Puerto Rico Electric Power Authority (PREPA) [4]:

The Puerto Rico Electric Power Authority will cease to exist as it deficiently operates today. Over the next few days the process will start, through which PREPA assets will be sold to companies who will transform the generation system into a modern, efficient, and less expensive one for the people.

As it stands, PREPA holds $9 billion (USD) in debt to its bondholders[5]. Rosselló’s plan is a direct reaction to a pre-hurricane effort to restructure the utility’s debt [6] as well as the need to repair the grid after Hurricane Maria with otherwise unavailable capital. It includes a two-pronged approach: (i) selling generation assets to private investors and offering a concession for a single private operator for transmission and distribution; and (ii) combining the three commissions that currently make up Puerto Rico’s regulatory board: Puerto Rico Energy Commission (PREC), the Public Service Commission for fuel and transportation, and the Telecommunications Regulatory Board [7]. This means that PREPA’s currently vertically integrated electric utility would be broken up, sold to, and eventually managed by various actors. In addition, instead of having a dedicated energy regulator to oversee the operations and management of the electric utility, these responsibilities would fall on a single regulator for multiple utilities.

Source: Cate Long

The Financial Oversight and Management Board (FOMB) supports this move, indicating that privatization presents opportunities to modernize the grid, reform pensions, and renegotiate labor and contracts [8]. As I will discuss later, the idea and ideology of privatization of utilities in Puerto Rico is not novel in the slightest sense. However, the pain point is this: the announcement for privatization seemingly came about without public hearing, participation, or much transparency beforehand [9]. Not only does lack of a public process leave out key stakeholders such as PREPA’s labor union and the electric utility’s customers, it is also reserves the visioning for a select group of actors behind closed doors, straining attempts at cooperation [10].

Being too quick to take a normative stance for or against privatization might be premature. We must take history and context into account. Looking at the wider context of the relationship between utilities and regulators elsewhere, as well as Puerto Rico’s past experiments with privatization of other utilities, further enriches the story. First, PREPA was founded in 1941 as a government-owned utility with a monopoly on electricity transmission and a near monopoly on electricity generation [11] [12]. It has essentially regulated itself until 2014, when PREC was established by Congressional Act № 57, which stated the need to adopt “a regulatory and legal framework through the creation of a robust independent entity that will ensure the transformation of the electric power system of our Island for the benefit of present and future generations” [13]. Typically, public utilities commissions on the United States mainland go hand in hand with the utilities themselves [14]. For example, in the State of Massachusetts, the Department of Public Utilities oversees privately-owned utilities and make critical regulatory decisions such as long-term planning, changes in rates, and net metering. While the relationship between utilities and their regulators is not always perfect, the fundamental existence of regulators is rarely questioned. However, PREC’s very recent establishment in Puerto Rico has undoubtedly introduced a player that was not previously part of the ecosystem, inevitably resulting in tension. In addition, the energy commission does not exist in a political vacuum: the president of PREC is appointed by the governor, so perception of PREC is also shaped by partisan politics [15].

There is also precedence for privatization public utilities on the island. The Puerto Rico Sewer & Aqueduct Authority (PRASA) faced financial crisis and water quality issues in the 1990s. Declaring a state of emergency, Governor Pedro Rosselló (the current governor’s father) created a strategy to privatize the water utility in order to reduce the debt and deficit and increase efficiency [16]. Consecutively, two private companies purchased and managed PRASA — French company Veolia, then Ondeo — resulting in increased debt, deteriorating relationships between PRASA and labor unions due to mismanagement of contracts, and incidents of water pollution [17]. The utility once again became publicly owned and managed by PRASA in 2004, offering private contracts only for construction. Similarly, in 1998, the Puerto Rican government privatized the Puerto Rico Telephone (PRT), the telecommunications utility, by selling it with twin goals of reducing the debt and increasing efficiency in the growing wireless market [18]. Seemingly, the privatization of PRT diversified the market for telecommunications in Puerto Rico, led to improved service quality [19]. Claro, one of the wireless networks that emerged after the privatization of PRT, and which also has 26% of the market share, was one of the only companies with backup power after Hurricane Maria made landfall and overall had faster recovery as a network than other wireless networks [20]. These two historical cases reveal that privatization is a weak explanatory variable: there are positive and negative examples of both in the history of Puerto Rico’s utilities. Looking at these two conflicting cases (i.e. PRASA and PRT), one can debunk the ideology of privatization as a panacea for debt reduction and efficiency. At the same time, the cases also make possible the suggestion that immediate resistance against privatization does not necessarily correlate with long-term problems.

THE QUESTION OF RENEWABLES, “AUTO-GESTIÓN,” AND ALTERNATIVE ENERGY FUTURES

The push for renewable energy alternatives has been both anticipatory of and reactionary to an event like Hurricane Maria, a watershed moment for transition. While public discourse about privatization privileges debate about ownership and regulatory models, the question of renewables (or not renewables) competes for attention in the same vein. Currently, the majority of energy generation in Puerto Rico comes from fossil fuels (petroleum, natural gas, and coal), with only a marginal percentage comes from renewable sources (solar, wind, hydroelectric). Researchers and professors within the University of Puerto Rico (UPR) system have been lobbying for “distributed rooftop photovoltaic systems, solar communities, and microgrids, combined with effective demand response programs and energy storage” to push Puerto Rico toward renewable energy alternatives since before Hurricane Maria [21]. To be sure, renewables do not preclude privatization, but the same group of researchers and professors from UPR hold firmly that replacement of fossil fuel-based generation, if possible, would be successful if done so in sites that are “environmentally impacted and where Puerto Rico has leverage to negotiate better agreements with private investors.¨

One such site is Salinas, a town on the southeast side of the island where the largest generators are located. This region is a lower-income area where the median yearly household income is $15,000 (USD), and more than half the residents are below the poverty line. Dumping of industrial waste from the fossil fuel-based generation plant Aguirre has resulted in environmental impacts on the natural wildlife, fisheries, and ecosystem in the Bay of Jobos, and coal ash from the plants has resulted in public health impacts on the local community [22] [23].

Aguirre Power Plant in Salinas, owned and managed by the Puerto Rico Electric Power Authority. Source: author (2018).

As it stands, electricity rates in Puerto Rico hover around an average of $0.24(USD)/kWh, below the Caribbean average of $0.33(USD)/kWh but well above the U.S. mainland average of $0.13(USD)/kWh [24]. Those pushing for renewables believe that less dependence on fossil fuels can potentially be more cost-effective for consumers, especially given that local rates for electricity are also tied to the cost of fuel and gas sold on international markets [25].

Source: EIA

Several authors from Professors Self-Assembled in Solidarity Resistance (PaRes) at the University of Puerto Rico, in a public written testimony to the FOMB in February 2018, proposed key ideas that might provide a path toward “sustainable and resilient electric energy infrastructure,” among them, “no penalty to grid defection” to prevent penalties that might be imposed to those who choose not to consume energy through alternative means; transition to distributed energy” through solar photovoltaic systems; and “transition to citizen-owned generation” in the form of fair regulatory frameworks that allow for new ways to manage, operate, and control the grid. Most importantly, the letter calls for the transition toward sustainable energy to be a social process that includes public acceptance, public participation, and public engagement. Given the existing anxieties about lack of transparency about the process of privatization, stakeholders in the energy sector have created space for dialogue. One such group that has organized opportunities to engage diverse actors around the future of energy planning in Puerto Rico is the National Institute of Island Energy and Sustainability (INESI), a “multidisciplinary and multi-directional institute of the University of Puerto Rico that seeks to insert the university community more effectively in the country’s public energy policy and in the resolution of energy and sustainability problems”[26]. INESI has organized various fora in which university actors and policymakers discuss past and existing energy policies, as well as possible futures for the island’s grid reconstruction. The fora are also invites participation from actors outside of Puerto Rico as well, including researchers from universities on the U.S. mainland who specialize in energy and planning.

Use cases for off-grid energy on the island, particularly for harder-to-reach, isolated communities in the mountainous regions of Puerto Rico have received attention after Hurricane Maria. Casa Pueblo, a community-based organization that operates as a self-supporting community center, has spearheaded solar energy initiatives both for its own facilities and for small businesses where it is located in Adjuntas. The panels played a significant role in post-Maria Puerto Rico, as they survived the wind and falling debris from the hurricane. Because of this, Adjuntas was one of the first places to restore power after the storm, meaning it was also able to restore critical services like health care, radio communication, and charging stations [27]. IDEBAJO, a community-based environmental justice organization in Salinas, promotes a similar vision of solar energy futures for Puerto Rico through Coqui Solar, a project that seeks to turn Salinas into a solar-powered community by installing photovoltaic panels on the Coqui Community Center [28] [29]. Casa Pueblo and Coqui Solar have been active since before the hurricane, but the storm provided a window of opportunity for raising awareness about the resilience of renewable energy sources. They are also both exemplars of community models of ownership in which the energy assets are owned and regulated by the customers and members [30]. Elsewhere, proposals for community microgrid projects abound, surrounded by the rhetoric of resiliency [31] [32]. While reflective of the ideals of public participation and public engagement and progressive in their operationalization, these models challenge the more top-down, centralized vision of the reconstruction of the energy grid from players like PREC, the FOMB, and even PREPA. A wider discussion about how (or whether) to integrate community solar and microgrid technologies like those displayed by Casa Pueblo and Coqui Solar has not reached crescendo. For certain, the road ahead toward some synthesis of renewables and privatization depends heavily on the ability of communities to push for dialogue and critical mass both on and off-island.

An important concept to understand within the larger conversation about electrification of Puerto Rico, post-hurricane, is the concept of la auto-gestión. In English, the closest translations of this word would be ¨self-reliance” or “self-determination.” Hurricane Maria has revealed pre-existing, underlying patterns of vulnerability on the island, with a critical one being that Puerto Ricans are largely dependent on a centralized grid — albeit run by an agency with a mandate to provide service to the people — that continues to fail them again and again. Thus, to a certain degree, the push for renewables on the island has less to do with reaching clean energy and sustainability goals, and much more to do with Puerto Ricans’ deep-seated frustration with a centralized model of generation and distribution. Renewable energy alternatives, particularly solar photovoltaic rooftop panels and microgrids, offer an opportunity for communities that have long felt overlooked by the central system to self-govern, self-manage, and self-determine its own power — both politically and electrically.

ELECTRIFICATION OF THE CARIBBEAN

Beyond Puerto Rico, the future of energy in the Caribbean after the 2017 Atlantic Hurricane Season is entangled in similar challenges regarding infrastructure, reconstruction, and governance at local, regional, and national scales. The next hurricane season could all too easily impact the energy systems in Antigua & Barbuda, Cuba, Dominica, Haiti, the U.S. and British Virgin Islands, Montserrat, Turks & Caicos, the Bahamas, Guadeloupe, St. Kitts & Nevis, St. Martin, the Dominican Republic, and more. Puerto Rico might even look at electric utilities in other Caribbean nations for potential lessons as the island considers privatization and PREPA’s future [33]. Caribbean utilities are heavily reliant on diesel and have struggled to create a regulatory and utility structure that will enable a transition to cleaner energy. Many vertically-integrated Caribbean utilities do not allow for independent power producers to bid into the system, a key mechanism for integrating renewable energy resources. The reliance on diesel also creates a disincentive for utilities to invest in renewables, since it would disrupt a pricing system based fossil fuels [34].

Puerto Rico is one of many islands in transition in the Caribbean after the 2017 hurricanes. Understanding what happened in Puerto Rico paints a picture of what could happen again elsewhere in the region. It is important to acknowledge, too, that more than its electrical grid is in disrepair. Similar problems of governance, financing, and equity are reproduced across various sectors as the island rebuilds, among them: housing, forestry, tourism, healthcare, education, water, coastal management, and more. Yet, the enduring spirit of Puerto Ricans is captured by a slogan that began to circulate not long after the storm subsided: Puerto Rico se levanta. Puerto Rico will rise. In this critical moment of rewiring comes an opportunity to bring ideas about innovative approaches for resilience into light.

References:

[1]Koerth-Baker, Maggie. (2017). “Why Puerto Rico’s Electric Grid Stood No Chance Against Maria.” FiveThirtyEight. Available at: https://fivethirtyeight.com/features/why-puerto-ricos-electric-grid-stood-no-chance-against-maria. Accessed 21 March 2018.

[2]Heister, Jessica Leigh. & Echenique, Martin. (2017). “Puerto Rico’s Grid Needs a Complete Overhaul.” CityLab. Available at: https://www.citylab.com/environment/2017/09/hurricane-maria-puerto-ricos-grid-needs-a-complete-overhaul/540969. Accessed 21 March 2018.

[3]New York Power Authority. (2017). “Build Back Better: Reimagining and Strengthening the Power Grid of Puerto Rico.” Available at: https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/PRERWG_Report_PR_Grid_Resiliency_Report.pdf. Accessed 21 March 2018.

[4]El Nuevo Dia. (2017). “Ricardo Rosselló announced a privatization model for PREPA.” Available at: https://www.elnuevodia.com/english/english/nota/ricardorosselloannouncedaprivatizationmodelforprepa-2392103. Accessed 21 March 2018.

[5]Williams-Walsh, Mary. (2017). “Puerto Rico’s Power Authority Effectively Files for Bankruptcy.” New York Times. Available at: https://www.nytimes.com/2017/07/02/business/puerto-ricos-electric-power-authority-effectively-files-for-bankruptcy.html. Accessed 21 March 2018.

[6] Ibid.

[7]El Nuevo Dia. (2017). “Ricardo Rosselló announced a privatization model for PREPA.” Available at: https://www.elnuevodia.com/english/english/nota/ricardorosselloannouncedaprivatizationmodelforprepa-2392103. Accessed 21 March 2018.

[8] Biggs, Andrew G., Gonzalez, Arthur J., Matosantos, Ana J., & Skeel, David. (2017). “Privatize Puerto Rico’s Power (Op-Ed).” Wall Street Journal. Available at: https://www.wsj.com/articles/privatize-puerto-ricos-power-1498776904. Accessed 21 March 2018.

[9]Marxuach, Sergio. (2018). “Inconvenient Questions.” Center for the New Economy. Available at: http://grupocne.org/2018/02/04/preguntas-inconvenientes-inconvenient-questions/#ingles. Accessed 21 March 2018.

[10]Merchant, Emma F. (2018). “Puerto Rico’s Utility Moves Toward Privatization, With Strained Cooperation.” GreenTechMedia. Available at: https://www.greentechmedia.com/articles/read/puerto-ricos-utility-moves-towards-privatization-but-struggles-persist-in-b#gs.7TuPSDY. Accessed 21 March 2018.

[11] Puerto Rico Electric Power Authority History. (n.d.). Available at: http://www.fundinguniverse.com/company-histories/puerto-rico-electric-power-authority-history. Accessed 21 March 2018.

[12] The Economist. (2017). Be PREPA-ed: The story of Puerto Rico’s power grid is the story of Puerto Rico. The Economist. Available at: https://www.economist.com/news/united-states/21730432-even-hurricane-maria-hit-it-was-mess-story-puerto-ricos-power-grid. Accessed 21 March 2018.

[13] S. №57–2014. Available at: http://www.oslpr.org/download/en/2014/A-057-2014.pdf. Accessed 21 March 2018.

[14] Pérez-Arriaga, I. J. (Ed.). (2014). Regulation of the power sector. Springer Science & Business Media.

[15] Puerto Rico Energy Commission. (2018). Jose Roman, Interim President. Available at: http://energia.pr.gov/en/staff-member/jose-h-roman-pe. Accessed 21 March 2018.

[16] Cortina de Cardenas, Susana Maria. (2011). Does private management lead to improvement of water services? Lessons learned from the experiences of Bolivia and Puerto Rico (Unpublished doctoral dissertation). University of Iowa, Iowa City. Available at: https://ir.uiowa.edu/cgi/viewcontent.cgi?article=2326&context=etd. Accessed 21 March 2018.

[17] Ibid.

[18] Navarra, Mireya. (1998). Plan to Sell Puerto Rico Phone Company Leads to Strike. New York Times. Available at: http://www.nytimes.com/1998/06/19/us/plan-to-sell-puerto-rico-phone-company-leads-to-strike.html. Accessed 21 March 2018.

[19] Brown, Nick, & Respaut, Robin. (2017). Puerto Ricans desperate for cell service turn to Mexican carrier. Reuters. Avaialble at: https://www.reuters.com/article/us-usa-puertorico-slim/puerto-ricans-desperate-for-cell-service-turn-to-mexican-carrier-idUSKCN1C7236. Accessed 21 March 2018.

[20] Ibid.

[21] Public letter to Honorary Judge Laura Swain, July 30, 2017.

[22] Llorens, Hilda. (2016). “In Puerto Rico, environmental injustice and racism inflame protests over coal ash.” The Conversation. https://theconversation.com/in-puerto-rico-environmental-injustice-and-racism-inflame-protests-over-coal-ash-69763. Accessed 28 March 2018.

[23] García-Quijano, C. G., Poggie, J. J., Pitchon, A., & Del Pozo, M. H. (2015). Coastal resource foraging, life satisfaction, and well-being in southeastern Puerto Rico. Journal of Anthropological Research, 71(2), 145–167.

[24] Energy Transition Initiative, (2018). Island Energy Snapshots. Available at: https://www.nrel.gov/docs/fy15osti/62708.pdf. Accessed 21 March 2018.

[25] Toussie, Isaac & Dyson, Michael. (2018). “The Role of Renewable and Distributed Energy in a Resilient and Cost-Effective Energy Future for Puerto Rico.” Rocky Mountain Institute. Insight brief. Available at: https://www.rmi.org/wp-content/uploads/2017/12/Insight_Brief_Puerto_Rico_Resilient_CostEffective_Energy.pdf. Accessed 21 March 2018.

[26] INESI. (2018). Available at: https://inesi.upr.edu/about.php. Accessed 21 March 2018.

[27] Klein, Naomi. (2018). “The Battle for Paradise.” The Intercept. Available at: https://theintercept.com/2018/03/20/puerto-rico-hurricane-maria-recovery. Accessed 21 March 2018.

[28]Llorens, Hilda. (2018). “The Making of a Community Activist.” Sapiens. Available at: https://www.sapiens.org/culture/jobos-bay-community-activist. Accessed 21 March 2018.

[29] IDEBAJO. (2018). https://idebajo.wordpress.com. Accessed 21 March 2018.

[30] E. O’Neill-Carrillo, R. Santiago, Z. Méndez, H. Vega, J. Mussa, J. Rentas. “Capstone Design Projects as Foundation for a Solar Community,” Proceedings of the 47th ASEE/IEEE Frontiers in Education Conference, October 18–21, 2017, Indianapolis, IN.

[31]Wernick, Adam. (2018). “Renewable energy and resilient microgrids could help rebuild Puerto Rico.” Public Radio International. Available at: https://www.pri.org/stories/2017-10-26/renewable-energy-and-resilient-microgrids-could-help-rebuild-puerto-rico. Accessed 21 March 2018.

[32]Toussie, Isaac & Dyson, Michael. (2018). “The Role of Renewable and Distributed Energy in a Resilient and Cost-Effective Energy Future for Puerto Rico.” Rocky Mountain Institute. Insight brief. Available at: https://www.rmi.org/wp-content/uploads/2017/12/Insight_Brief_Puerto_Rico_Resilient_CostEffective_Energy.pdf. Accessed 21 March 2018.

[33] Schmidt, P.L. & Sangermano, N. (2017). The Global Transition to Renewable Energy — Can the Caribbean Lead the Way? Part 2: The Challenges. Renewable Energy World.

[34] Ibid.

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