Island power authority searches for way through the darkness
Reprints
MONACILLO, Puerto Rico — The 2018 hurricane season is fast approaching, and that terrifies Gary Soto, operations manager for the Puerto Rico Electric Power Authority.
“For the next season, I’m very scared,” he said during a tour of a PREPA power plant in Monacillo, Puerto Rico. “It’s going to be a big challenge if anything happens.”
The commonwealth’s power system plunged into darkness when Hurricane Maria struck in September 2017, with the southern part of the island, where its two key generating facilities are located, suffering a direct hit, resulting in power outages to about 70% of PREPA’s approximately 1.5 million customers at its height.
While power was restored to most customers within weeks, thousands remain without power. And the fragility of the power system was again demonstrated in February by a fire and explosion that led to another outage, and a blackout in April reportedly caused by an excavator incident.
“We have a very unstable system right now,” Mr. Soto said.
In July 2017, PREPA filed for a municipal-style bankruptcy after the Financial Oversight and Management Board for Puerto Rico rejected a restructuring agreement between the utility and its creditors — a filing that occurred a day before the utility defaulted on a $447 million debt service payment, according to a Moody’s Investors Service Inc. report published in December.
PREPA’s fate is uncertain, as proposed legislation would privatize the system.
“(PREPA) won’t fetch value above its debt,” said Josen Rossi, chairman and majority owner of construction firm Aireko Construction in Caguas, Puerto Rico. “I think there are huge governance and regulatory challenges right now in front of investors, or even in front of a municipal transformation of PREPA, because you’re going to need outside capital regardless.”
Read Next
-
Puerto Rico struggles to rebuild after Maria
SAN JUAN, Puerto Rico — Luis Herrera, engineer for the city of Caguas in Puerto Rico, is literally building bridges in the wake of Hurricane Maria.
