According to Rosselló Nevares, the collapse of the electricity grid has opened the door to evaluate how energy has been managed in Puerto Rico to date. (horizontal-x3)
According to Rosselló Nevares, the collapse of the electricity grid has opened the door to evaluate how energy has been managed in Puerto Rico to date. (Ramón Tonito Zayas)

In the face of the financial and operational collapse of the Puerto Rico Electric Power Authority (PREPA) and the fiscal incapacity of the Puerto Rican government, the damage caused by Hurricane Maria to the Island's electrical system has become an invoice for the Federal Emergency Management Agency (FEMA) and the US Army Corps of Engineers (USACE), which is currently about $ 1,68 billion.

This nine-digit figure, which emerged yesterday during an interview with Governor Ricardo Rosselló Nevares, is not part of the $ 4.7 billion credit line that the Puerto Rican government asked FEMA in order to deal with its liquidity crisis.

In the interview, the governor acknowledged that the prolonged lack of power could significantly complicate the recovery of the Puerto Rican economy that was already in a deep crisis before the cyclone.

"When I talked about it (the plan that contemplates restoring 95% of power by mid-December) they accused me of being aggressive (ambitious), and the truth is that I am," said Rosselló Nevares.

Last week, El Nuevo Día published estimates from the National Institute of Energy and Sustainability (INESI, Spanish acronym) of the University of Puerto Rico in Mayagüez, which estimates that producing electricity with electric generators could cost families and businesses about 70 cents per kilowatt hour. The figure is almost four times the average cost of the kilowatt per hour that PREPA charges customers.

"I understand the difficulties. First, it costs a lot to run a business with diesel, using a generator. Second, it is true that it is supposed to be temporary, but because of the cost or because generators are not designed to work forever, they will fail," the governor stated when El Nuevo Dia told him that hundreds of companies and thousands of families do not have enough money to wait three months for the restoration of the electrical system.

Rosselló Nevares was confident that 30% of the customers will have electricity before the end of the month.

He added that he is working on alternatives with the Federal Small Business Administration, several programs under FEMA and others such as the Community Development Block Grant, so that businesses can counterbalance the impact of the lack of electricity in their operations.

First, lift the network

According to Rosselló Nevares, the restoration of the electrical system must gain intensity in the upcoming weeks.

 Until yesterday, 380 crews were working to restore the system, and the governor assured they should reach a thousand.

Most of the workforce belongs to PREPA and in that effort 40 crews of the Jacksonville Power Authority have joined and almost a hundred of Whitefish Energy, the state-based company of Montana that would have been the only one in accepting to work to restore the Island'selectrical system at the request of PREPA.

Another 200 USACE crews also work on system restoration.

Based on the Rosselló Nevares schemes, if the Puerto Rican power grid were to be divided in two, the USACE is in charge of the southeast part of the island, where the power transmission lines that supply electricity to the north area fell.

Meanwhile, the staff of Whitefish Energy and other contractors such as Kobra –an agreement that was still being settled yesterday- would be in charge of restoring electricity in the western part of the island in order to power the southern zone, the areas of Mayagüez and Arecibo, as well as secondary lines.

In addition, according to the governor, the hiring of the Texas company Fluor Corporation by the USACE should contribute to accelerate the work. That contract is around $ 240 million.

On the other hand, Rosselló Nevares pointed out that, after the hiring of General Electric to repair the Palo Seco units, that work will take from four to six months, so that, in the immediate term, it is being considered to energize the northern area using large generators provided by the USACE and that are still in the process of installation.

Bill to  feds

In terms of labor, the governor assured that  within two months about $ 490 million will be required and also another $ 740 million for materials and equipment. To that amount, almost $ 450 million in funds provided by the USACE are added.

With that in mind, and as anticipated a week ago by El Nuevo Día, lifting the power grid will only be possible due to the financial rescue provided by FEMA and USACE in the wake of the devastation caused by the cyclone. In this first stage, it will cost $ 1,68 billion.

Rosselló Nevares indicated that the analysis of losses in PREPA continue, but he also said that the damage far exceeds the first bill that the federal government will pay.

Rosselló Nevares acknowledged that, in the future, Puerto Rico will have to seek more support from the federal government to ensure that Puerto Rico has a more efficient energy grid, capable of withstanding a hurricane like Maria.

"These funds, these federal allocations, will be needed, but also collaboration of the private sector, in the generation, in the participation, in looking for innovative systems", expressed Rosselló Nevares adding that he will try to balance the funds that he seeks at a federal level and the entry of private entities into the Island's energy market.

Supporting renewable energy

According to Rosselló Nevares, the collapse of the electricity grid has opened the door to evaluate how energy has been managed in Puerto Rico to date.

The gas platform for the southern zone, identified as Aguirre Gasport, is among those projects to be re-evaluated

"Now we have the opportunity to rethink everything," he indicated.

Earlier this week, Rosselló Nevares reported that his administration has received three energy proposals, including a new gas power plant in the north, supported by Puma Energy. The multinational Puma confirmed to El Nuevo Dia that, since 2014, it has among its advisors the World Professional Group, a firm that  has the former director of the campaign of governor Rosselló Nevares and his former representative before the Board, Elías Sánchez Sifonte as members of the staff.

To questions of El Nuevo Día about the reasons for perpetuating the model of large-scale generating plants that use fossil sources and not giving way to generation with renewable sources, Rosselló assured that, under his administration, he will be able to raise the use of electric generation with sun or wind. At present, 2% of the energy sold by PREPA comes from renewable sources, well below the 15% goal established by law in Puerto Rico.

"This is the time," said Rosselló Nevares. "Our expectation is to raise it (the generation with renewable sources) between 15% and 20%. That would be a significant leap in Puerto Rico."

According to the governor, in addition to renewable sources, his plan considers to increase generation in the north, to avoid the loss of efficiency in transmission from the south, and to penetrate in the so-called microgrids and smart grids.

There will be transparency

When asked by El Nuevo Día about how his administration will avoid the existence of conflicts of interest or the squandering of funds in unnecessary projects, Rosselló Nevares stressed that he will also take action on the issue.

"We will create a structure to give coherence and transparency to the use of all funds. We do not want to fall into a situation like (Hurricane) Katrina in which, due to the lack of clarity and lack of execution, billions of dollars were lost," he indicated.

The structure, he explained, will have two levels of transparency: one for the federal government to ensure repayment of reimbursements, and the second one for citizens.

"It is important to establish that all these projects have a purpose regarding the public good and that they have not been decided without the participation of the people or different actors," he said.

"That money will be to build the platform of the future. I will ensure that there is diligence and transparency," he stressed.


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