Today, Puerto Rico Governor Ricardo Rosselló submitted updated fiscal plans to the Financial Management and Oversight Board, as required under the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA). The proposals include initial plans for the privatization of the Puerto Rico Electric Power Authority (PREPA). Chairman Rob Bishop (R-UT) issued the following statement:
“These plans are a first step in Puerto Rico’s future recovery, of which the privatization of PREPA will be a key component. However, the transformation of PREPA and the recovery of the island will not occur overnight, and cannot be done behind closed doors. It is imperative the Oversight Board and Governor fully integrate those who hold the debt into the development of these plans, thereby guaranteeing accuracy and transparency in the underlying assumptions. After all, the Board’s stated goal under PROMESA is to return Puerto Rico to fiscal accountability and the capital markets, and this can only occur if the fiscal plans respect the lawful priorities and liens of debt holders. My committee will be following the development of these plans intently to ensure financial stability and success return to the island.”
Background:
PROMESA, which became Public Law 114-187 on June 30, 2016, vested the Oversight Board with exclusive control to facilitate the development, enactment and implementation of fiscal plans as a means to restore fiscal solvency and access to capital markets for Puerto Rico.
The initial plans were approved by the Oversight Board in March 2017. The devastating impacts of Hurricanes Irma and Maria necessitated the development of new fiscal plans.
It’s hard to fully comprehend, but more than four months since hurricanes swept through the Caribbean, about half of Puerto Ricans remain without electricity.
This week, Governor Ricardo Rossello announced the island’s public energy monopoly would be sold off to private companies following a series of scandals.
In the first of two reports from Puerto Rico, special correspondent Monica Villamizar looks at what’s behind the delay in restoring power and how people are coping.
Monica Villamizar:
When Hurricane Maria struck in September, fires broke out and victims had to run to the station to inform firefighter Ronald Vega and his colleagues. There was no way to dial 911. This fire station in the eastern town of Naguabo is now functioning normally.
But at Ronald Vega’s home nearby, there is no electricity. He uses a generator at night and relies on emergency food aid. The signs of water damage still loom above his head.
Ronald Vega (through interpreter):
It’s not easy. It’s such a tough situation. I’m paying at least $15 a day for the fuel of my generator during the week. That’s every day.
Monica Villamizar:
As a firefighter, Vega makes less than $20,000 a year. Before the storm he was already supplementing his income with part-time work at Walgreens. Four months after the storm, about 450,000 of the 1.5 million electricity customers are without service.
Blackouts occur regularly our hours at a time, even in San Juan. Outside the capital, destruction remains. In Salinas, home to the island’s largest power plant, Barber Julio Ortiz set up shop at a ruined gas station. It took him three months to find an inverter to connect his razors to the car battery.
Julio Ortiz (through interpreter):
People have to survive one way or another. I have to make it happen somehow because, you know, money doesn’t grow on trees.
Monica Villamizar:
The response here remains an emergency. The U.S. Army Corps of Engineers coordinates repairs by private contractors using dollars from FEMA, the Federal Emergency Management Agency.
Woman:
We’re standing at the lay-down yard where all of our large items come into.
Monica Villamizar:
The Army Corps oversees materials distributed across the island, but under the federal Stafford Act, FEMA is only allowed to restore infrastructure exactly as it was before a disaster.
In some cases, materials in Puerto Rico were so outdated that the Corps had to get them made especially for the island, furthering delays.
Col. John Lloyd:
It really doesn’t allow to do more resilient or hardening work that made that Puerto Rico’s grid definitely needs.
Monica Villamizar:
Colonel John Lloyd directs the Army Corps’ operation from the headquarters of the electricity utility.
So what’s the point of restoring it to something old and essentially in bad shape?
Col. John Lloyd:
The work that we are doing does — it brings it up to code, and in many cases the grid wasn’t to current code.
Monica Villamizar:
And when do you think everybody will have power again?
Col. John Lloyd:
We will slowly get more customers online. I think by the middle of March, end of March, we’re going to see the majority of customers with power.
Monica Villamizar:
Many people have accused Puerto Rico’s only electric utility company, PREPA, of being corrupt and wasteful.
Before the storm, PREPA was bankrupt, and it saved money by cutting down on important maintenance. After the storm, PREPA contracted Whitefish, a small, Montana-based firm, for repairs it could not complete. The contract was canceled, but PREPA still has to pay Whitefish more than $100 million for work done.
And then this week, the Puerto Rican governor announced that PREPA will be privatized over the next 18 months.
Gov. Ricardo Rossello (through interpreter):
The process will begin for PREPA assets to be sold to companies who will transform the generation system into a modern, efficient, and less expensive one for the people.
Monica Villamizar:
The privatization is not expected to affect the repair schedule. About 80 percent of electrical infrastructure was destroyed.
PREPA told us that restoring power everyone on the island, not just the majority, is expected to take at least until May, eight months after Hurricane Maria. Houses across the countryside are lined with blue tarp on their roofs.
But not everyone is waiting for outside help to move forward with repairs.
Arturo Massol Deya:
We don’t depend upon the grid to supply the energy needs of Casa Pueblo.
Monica Villamizar:
Arturo Massol Deya is the head of Casa Pueblo, an environmental organization in Adjuntas. This local community center has been running on solar energy since 1999. The sun powers everything, from industrial coffee grinders to medicine refrigerators, as well as a radio station.
Arturo Massol Deya:
Lighting was a critical thing. And it was a way to teach people how inexpensive, easy it is to embrace renewable energy sources like the sun, in which you are less vulnerable, because the capture of the energy and the utilization of the energy is at the point of consumption.
Monica Villamizar:
Casa Pueblo is technically still connected to the grid. But it creates so much power that it can send it back into the system.
The Puerto Rican government still hasn’t approved regulations for people to provide power to the grid with solar. In addition to the costs of infrastructure, that’s one more barrier to making alternative energy widespread.
The government does plan to increase renewable power from only a small amount to 30 percent of the island’s energy, so it can be more prepared for the next hurricane.
This place became a very important power source for the entire community after the hurricane. People were coming here to charge their phones and get solar lamps and refrigerators. And the radio station never stopped broadcasting, because it runs on solar energy.
It’s a community station where people call in to request their favorite salsa songs and make dedications to friends and family. In the hills around his town, Arturo has installed solar power systems to connect vulnerable people isolated from the power network.
Jonathan is disabled, living with his grandmother, Luz Leida Plaza. With solar, they have lights and power for their phones and a tiny fridge for medicine. The same system powers a neighbor’s dialysis machine.
Luz Leida Plaza (through interpreter):
Before they had a solar system, my neighbor told me he had to connect his mother’s machine to a car battery all night.
Monica Villamizar:
It’s a familiar story to Ronald Vega.
Ronald Vega (through interpreter):
In some places, they are fighting, fighting to get electricity. People in many villages say they feel that they have simply been forgotten. And that’s because, in many places, they are still without power and lights, and it’s been more than 116 days.
Monica Villamizar:
And like Casa Pueblo, his fire station is now prepared. Thanks to a solar power system brought to the island by Las Vegas firefighters, they are strong enough to weather the next hurricane. For the PBS NewsHour, I’m Monica Villamizar in Puerto Rico.
Judy Woodruff:
And in the coming days, we will continue our series After the Storms with additional reports from Puerto Rico and from Texas.
Four months after Hurricane Maria, about 450,000 of 1.5 million electricity customers in Puerto Rico still have no service. Blackouts regularly occur for hours at a time, even in San Juan. Special correspondent Monica Villamizar reports on the emergency efforts to restore power, and how some have taken matters into their own hands as outdated technology and suspected corruption stand in the way.
The small Montana energy company that botched the critical rebuilding of Puerto Rico in the aftermath of Hurricane Maria spent $150,000 lobbying Congress last quarter amid investigations, a disclosure report filed Friday shows.
The fourth quarter lobbying report shows that Whitefish paid the law firm Foley & Lardner to have five representatives lobby the Senate and House on the company’s behalf.
What the firm was specifically hired to accomplish is unclear.
In the report, under “Specific lobbying issues,” Foley & Lardner wrote “Puerto Rico Electric Power Authority to rebuild transmission lines damaged from recent hurricane damage.”
The five lobbyists working for Whitefish included two former members of Congress (David Cardoza and Scott Klug); two former congressional staffers (Jennifer Walsh and Ted Bornstein); and Michael Crossen, an attorney whose experience includes representing “businesses before boards and administrative agencies in all forms dispute resolutions,” according to a company profile.
Whitefish Energy and Foley & Lardner did not immediately respond to questions from the Center for Responsive Politics on Wednesday.
Last year, Whitefish was thrust into controversy after it was awarded a $300 million contract by Puerto Rico Electric Power Authority (PREPA), an electric power corporation owned by the Puerto Rican government, to rebuild the island’s power grids after Hurricane Maria devastated the U.S. territory. The September disaster knocked out the power of 3.4 million residents on the island and resulted in a death toll that may be upwards of 1,000.
The Puerto Rican government gave the two-person Montana utility company the contract almost out of the blue, without a competitive bidding process and with significant price markups certain services.
The deal also drew skepticism because the company is based in the small hometown of Ryan Zinke, interior secretary for the Trump administration. Zinke denied claims that he was tied to the contract.
“I had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico,” Zinke said in a statement. “Any attempts by the dishonest media or political operatives to tie me to awarding or influencing any contract involving Whitefish are completely baseless. Only in elitist Washington D.C. would being from a small town be considered a crime.”
In October, PREPA canceled the contract with Whitefish as it drew investigations by the Department of Homeland Security, multiple House committees and the Puerto Rican government.
When news broke the company had signed with Foley & Lardner, a Whitefish spokesman said in a statement to The Hill that the firm was hired to give the company “representation in D.C.”
“Whitefish Energy has a reputation to uphold and we felt that Foley would help us in being able to have those conversations in a productive manner,” said Ken Luce, a former spokesman for the company.
The announcement that Puerto Rico's governor is moving to privatize the U.S. territory's public power company has many on the island of 3.3 million people asking whether this will finally bring them more affordable electric bills and more reliable service.
More than 30 percent of customers are still without electricity more than four months after Hurricane Maria, and many blame that and previous blackouts on the Puerto Rico Electric Power Authority, whose infrastructure averages roughly 45 years old, compared with 18 years on the U.S. mainland.
Many also wonder who, if anyone, would be willing to buy a power company that has a $9 billion debt load, filed for bankruptcy last year and faces longstanding accusations of mismanagement and corruption. But Puerto Ricans in a flurry of exchanges across social media after Monday's announcement seemed to agree that any change would be a good one, though they remained wary that the utility could fall into the wrong hands.
"Some people have faith that privatization will improve everything, but it's not a guarantee," said Puerto Rico economist Jose Caraballo. "If a good deal isn't hammered out, Puerto Rico can end up worse than it is."
Gov. Ricardo Rossello said he will be working with legislators in the coming days to draft a measure that would allow the government to sell the utility's assets in a process expected to take 18 months. The majority leader in Puerto Rico's House of Representatives said he would back the measure, while the president of the island's Senate said he first needed to see the legislation to ensure it would serve the interests of all Puerto Ricans.
Power bills on the island have long been double the average of those on the U.S. mainland, in part because of imported fuel supplies three-fourths of the energy consumed in Puerto Rico, according to the U.S. Energy Information Administration.
Rossello said privatizing the power company would both improve service and lower power bills, and he predicted it would lead to more investment in renewable energy projects.
"With this transformation of PREPA, you will cease being its hostage," he told Puerto Ricans. "The deficient and obsolete system of generation and distribution of energy is one of the great impediments to our economic development."
Sen. Juan Dalmau, whose party supports independence for Puerto Rico, said privatization would not necessarily translate into efficiency or savings.
"The message is a manipulation of the justified hopelessness of an island facing a lack of power after the hurricane," he said.
A spokesman for the utility did not return a message for comment, while union leaders said they would not comment until Tuesday.
Rossello said the electrical grid is not designed for Puerto Rico's current needs, noting that the greatest demand exists in the northern part of the island while the main generation plants are in the south. In addition to its aging infrastructure, PREPA has lost 30 percent of its employees in the last five years, 86 percent of whom worked in maintenance, he added.
The company also has faced internal turmoil. Its director was forced out in November after the utility failed to immediately call for help from its mainland counterparts after Hurricane Maria. Instead, PREPA granted a power-restoration contract to a little-known company that the utility was later forced to rescind. Most recently, PREPA was blamed for the failure to distribute badly needed parts found in one of its warehouses even as repairs to the storm-damaged power system went undone for lack of supplies.
Founded in 1979 as a public utility run by appointees of the island's governor, PREPA has long been criticized for political patronage and inefficiency. It has been beset by frequent blackouts, including an island-wide outage in September 2016.
The island's water and sewer company was once privatized, but the government had to take it back over in the early 2000s after problems with service, billing and quality requirements set the U.S. Environmental Protection Agency. But Puerto Rico has been privatizing the operations of some government agencies in recent years amid a recession that has lasted more than a decade, including management of the main international airport and one of its main highways.
Economist Gustavo Velez said privatizing PREPA will be a positive move if whoever buys it is a good operator. He added that he supports the privatization of not only the power company, but other state agencies as well, including the Ports Authority, the water and sewer company and the highway authority.
"We have to open up all these utilities that are bankrupt, failed," Velez said.
The announcement that Puerto Rico's governor is moving to privatize the U.S. territory's public power company has many on the island of 3.3 million people asking whether this will finally bring them more affordable electric bills and more reliable service.
Gov. Ricardo Rossello said privatizing the power company would both improve service and lower power bills, and he predicted it would lead to more investment in renewable energy projects.
Sen. Juan Dalmau, whose party supports independence for Puerto Rico, believes privatization would not necessarily translate into efficiency or savings.
Puerto Rico Electric Power Authority (PREPA) employees fix power lines in Santurce, San Juan, Puerto Rico, on Thursday, Oct. 19, 2017.
Puerto Rico’s governor announced Monday that he is moving to privatize the U.S. territory’s public power company after its slow, troubled recovery from Hurricane Maria focused new attention on longstanding accusations of mismanagement and corruption.
Nearly 30 percent of customers on this island of 3.3 million people remain without power more than four months after Hurricane Maria. Many blame the failings of the Puerto Rico Electric Power Authority, or PREPA.
Its director was forced out in November after the utility failed to immediately call for help from its mainland counterparts after the storm. Instead, PREPA granted a power-restoration contract to a little-known company that the utility was later forced to rescind. Most recently, PREPA was blamed for the failure to distribute badly needed parts found in one of its warehouses even as repairs went undone for lack of supplies.
Founded in 1979 as a public utility run by appointees of the island’s governor, PREPA is roughly $9 billion in debt and years before Maria’s September landfall, the company was criticized for political patronage and inefficiency. It was also beset by frequent blackouts, including an island-wide outage in September 2016.
“The Electric Power Authority has become a heavy burden for our people, who today are held hostage by its poor service and high cost,” Gov. Ricardo Rossello said. “The deficient and obsolete system of generation and distribution of energy is one of the great impediments to our economic development.”
Because PREPA is bankrupt, a federal judge will have to approve the sale, in addition to the island’s legislature, economists said.
In the next couple of days, government officials will begin working with legislators to begin defining how to sell the utility’s assets. Rossello said the process could take around 18 months.
Carlos Mendez, majority leader in Puerto Rico’s House of Representatives, said he will ensure the body backs the governor’s objective.
“Either we remain as we are, or we take the decisions needed to push Puerto Rico ahead and lift our economy up once again,” he said.
Puerto Rico Senate President Thomas Rivera Schatz was more reserved, saying he would analyze the proposal and make sure that any changes guarantee an “adequate, efficient and affordable” electrical service for all Puerto Ricans.
He also pledged to protect the utility’s workers as the island struggles with an unemployment rate of 10 percent.
Rossello said privatization would bring more affordable rates and better service to consumers and help attract more business to an island mired in an 11-year-old recession.
But Sen. Juan Dalmau, whose party supports independence for Puerto Rico, said privatization would not necessarily translate into efficiency or savings.
“The message is a manipulation of the justified hopelessness of an island facing a lack of power after the hurricane,” he said.
Neither union leaders nor a spokesman for the utility returned calls for comment.
Rossello said PREPA’s electrical grid is not designed for Puerto Rico’s current needs, noting that the greatest demand exists in the northern part of the island, while the main generation plants are in the south. Rossello said PREPA’s infrastructure is nearly 30 years older than the industry average. The company has lost 30 percent of its employees in the last five years, 86 percent of whom worked in maintenance, he said.
“With this transformation of PREPA, you will cease being its hostage,” he said.
Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
FILE - In this Nov. 13, 2017 file photo, Puerto Rico Gov. Ricardo Rossello speaks during a news conference, in Washington. Rosello said on Monday, Jan. 22, 2018, that he is privatizing the island’s government-owned power company following decades of mismanagement, corruption and blackouts. (Evan Vucci, File/Associated Press) Puerto Rico moves to privatize troubled power company
Deb and Robin Roberts, whose son Michael Holland perished when the cargo ship El Faro sank during a hurricane in 2015, delivered more than 30,000 pounds of food, water and personal hygiene supplies to hurricane victims in Puerto Rico.
The Roberts, who live in Wilton, Maine, collected the relief supplies during a drive last November at the Scarborough Walmart and delivered the goods over a three-day period in December.
Michael Holland, 25
Tote Maritime Puerto Rico, which owned and operated the El Faro, helped the couple transport the supplies to Puerto Rico, which was devastated last year by Hurricane Maria.
“It was truly a rewarding experience to be able to help the people of Puerto Rico in memory of our son, Michael,” the Roberts said in a statement issued Thursday.
“Despite being without power for over three months, they were all smiling and even broke out in song and dance while they awaited the arrival of the delivery truck,” the Roberts said. “The people of Puerto Rico truly love their island just like Michael did.”
Holland was one of 33 crew members, four from Maine, who died when the El Faro sank during Hurricane Joaquin in October 2015.
The others from Maine were Captain Michael Davidson of Windham, who was 53; Michael Holland, 25, of Wilton; and Danielle Randolph, 34, and Dylan Meklin, 23, both of Rockland.
More than 1,600 miles may separate Wayne from the tiny Puerto Rican island of Vieques, but for one group of college students, its people will remain close to their hearts despite the ocean between them.
Nearly four months after Hurricane Maria touched down, battering the secluded island and knocking out its only radio station, nine communications students from William Paterson University traveled to Vieques this month for a weeklong humanitarian mission. The students, including members of the college radio station's staff, donated equipment and expertise, and lent a helping hand to the island's ongoing efforts to rebuild.
"Flying in, what stood out was all the blue FEMA tarps serving as makeshift roofs," said student Aziza McGill Ayinde. "Where there were once houses, you saw tents and a foundation."
Vieques, located off Puerto Rico's southeast coast, became internationally known in 2003 when a series of protests led to the decommissioning of a U.S. Navy base that had used much of the island as a bombing test site since the 1940s.
Cherished by rich and famous tourists for its picturesque beaches and Mosquito Bay, where algae generate a glowing lagoon, the island municipality is also home to about 10,000 permanent residents.
But after 175-mph winds leveled scores of homes and displaced hundreds, locals said it became "a forgotten island," bereft of federal aid in the first 10 days after Maria made landfall.
Today, Vieques, like much of Puerto Rico's main island, still lacks a power grid and is reliant on generators for electricity and intermittent cell or WiFi service to communicate. Residents say running water only returned in December.
Radio Vieques, the island's community station, saw the storm knock out its antennae and transmitter located on the neighboring island of Culebra.
As a result, Robert Rabin, the station's manager and director of the Vieques Historic Archive, said residents were left without answers to pressing questions regarding when power could return or where temporary food and shelter sources may be found.
“I told the students that it became painfully obvious after the storm that communication was our biggest challenge," said Margo Cheney, a Vieques resident and longtime friend of university communications professor Lori Ramos, who organized the effort. "The situation became dire because the radio station was shut down."
Ramos, who has deep roots on the island, invited Cheney to visit William Paterson in late November so her class could chronicle Cheney’s experience during the storm.
After she spoke, Cheney said, "The department’s chair [Robert Quicke] said he would really like to help.”
Out of that visit sprang the idea for this month's trip, which students returned from on Wednesday.
As part of the mission, William Paterson students gifted Radio Vieques' cadre of volunteers with a new computer and ham radio training to help maintain communication should the station go dark again.
“This type of academic solidarity is important,” said Rabin, a Boston native who moved to Vieques in the 1980s.
Rabin and his wife, Nilda Medina, were founding members of the movement that opposed the navy base. The radio station, which took many years to fund, was brought to fruition in 2013 by the activist group, he said.
Referring to the William Paterson students, he said, “This particular group has a special meaning and opened up an important dialogue we hope to grow into an alliance for Radio Vieques. They offer not just material, but human resources.”
When not volunteering at the island’s organic farm or distributing food and supplies to residents displaced by the Category 5 hurricane, William Paterson broadcasting and journalism students also conducted interviews as part of a winter semester project that will air on both the college's station, WPSC 88.7FM, and Radio Vieques.
“People here are telling us they were starving because they had no food or water for three weeks," student and Kinnelon resident Michele Ciz said on Jan. 4, speaking from the back of a Vieques pickup truck used to deliver meals. “There are roofs just lying on the ground. It’s devastating.”
Gypsy Cordova, president of the Vieques City Council, estimated that as many as 20 residents died during the storm’s aftermath due to a lack of doctors, medicine and “proper health environments.”
About 50 homes were completely destroyed and up to 1,000 residents had left the 21-mile-long island, he said. (The official death toll for all of Puerto Rico is 64 people, though officials have been accused of under-reporting the number. Additionally, some estimates suggest as much as 25 percent of Puerto Rico’s 3.4 million citizens have left since the storm.)
Eli Felix Velazquez, 47, a lifelong Vieques resident and commercial fisherman, said a 61-year-old neighbor with diabetes died in a flattened home while waiting for medical personnel to arrive. Along with his boat, Velazquez said his home in Barrio Montecarmelo, named for his father, was destroyed and he is awaiting word from the Federal Emergency Management Agency regarding his insurance claims.
“I think it’s a very good opportunity for the students to see the real world and not just what the news tells them,” said Velazquez, a married father of two children. “The agencies failed us but regular people, like these students, have been wonderful.”
Email: Gicas@northjersey.com
Nine communications students from William Paterson University returned home Jan. 10 after a week-long humanitarian effort on Vieques that included members of the college radio station’s staff donating equipment and expertise. Tony Gicas/NorthJersey.com
