Case Studies
Puerto Rico
Mismanagement and corruption – two words frequently used to describe the problems with
Puerto Rico’s government-run electric utility.
Puerto Rico’s current arrangement is eerily similar to Pine Tree Power’s proposal to seize Maine’s electric utilities and create a new government-controlled power authority operated by a third-party contractor.
A history of poor decisions and bad practices by the public utility, called the Puerto Rico Electric Power Authority, came to a head in 2017.
First, its $9 billion debt led to a bankruptcy filing that still hasn’t been resolved.
After decades of neglect, its already decimated electric grid was wiped out by Hurricane Maria, leaving the entire island with no power. While no one can predict a hurricane, some customers went without electricity for almost a year.
In 2021, a third-party contractor was hired to operate Puerto Rico’s power grid – at a cost of $115 million annually.
Puerto Rico Electric Power Authority – the only electric utility on the island – still owns the power grid and the government is still in charge of rates. A third-party contractor manages and upgrades the lines and poles.
Just like the Pine Tree Power proposal.
But now things are even worse… Frustrated citizens are protesting recurring blackouts… There’s been very little progress on renewable energy… There are calls for investigations into the third-party contractor…
If only Puerto Rico had known that in this arrangement:
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Electricity prices would increase 7 times in one year, practically doubling electric rates
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Blackouts would become more frequent, last longer and take twice as long to repair
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The contractor’s top executive would be “labeled a fugitive” while raking in a reported salary of $1.1 million.
"Rate increases, widespread outages, and generally unreliable service have combined to generate street protests as well as calls by politicians, artists, and other stakeholders for the government of Puerto Rico to cancel or terminate the public-private partnership agreement with LUMA Energy for the operation of the island’s electric grid."
