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PREPA head airs laundry list of operational problems

From left: William Villafañe and Ricardo Ramos-Rodríguez offer an update on PREPA’s operations.

The Executive Director of the Puerto Rico Electric Power Authority, Ricardo Ramos-Rodríguez, aired a laundry list of structural and operational problems plaguing the island’s main energy provider, while outlining plans to face the peak of this year’s hurricane season.

During a news conference, Ramos-Rodríguez said the current administration took over “a power system that lacked maintenance; 60 percent of an unusable land fleet; damaged helicopters; an impaired electrical infrastructure, well below the industry standard; structural flaws in plants; uncertified drivers and 2,893 fewer employees, 86 percent of them operational, including maintenance staff, pruners, engineers and specialized technical personnel.”

He added that the power generating system does not comply with the U.S. Environmental Protection Agency’s “Mercury and Air Toxics Standards” (known as MATS) and, in general, the entire electrical system shows lack of investment in improvements and maintenance.

“When we took over the management of the Authority in March, we immediately developed a strategic plan to reduce disruptions and improve our service,” he said.

“As part of the initiatives, we established an intensive pruning and trimming program in order of priority, we bought and repaired several vehicles and trucks, including the “Holland” fleet to work on energized lines, we signed a collaborative agreement with the Puerto Rico National Guard to use their helicopter for emergency work, we repaired one of our helicopters, and we certified the pilots,” he said, adding two other helicopters will be available by October, covering 100 percent of the needed aerial fleet.

PREPA will: hire 65 specialized emergency workers and private companies to provide maintenance to substations and pruning; reorganize the construction divisions and improve regions; renovate insulation systems and hardware lines; and, install more smart meters throughout the island.

In the mid- and long-term, PREPA will embark on larger projects that require virtually all of its income to maintain and rebuild the system to meet the standards of public electric utilities and environmental laws, he said.

“These projects will renew the public corporation’s transmission and distribution system and are a requirement to ensure the reliability of the power service,” Ramos-Rodríguez said, noting PREPA will carry out projects via public-private partnerships and private investments.

For his part, Chief of Staff William Villafañe said Puerto Rico needs a reliable, efficient and cost-effective electricity system to support the island’s socio-economic transformation agenda.

“We dragged years of administrative deficiencies and bad decisions at PREPA. It is up to our government to take action to correct these flaws, and that this public corporation can jump-start an electrical system at the height of the times,” he said.

Villafañe added “contrary to other government administrations, this government has taken steps to establish an safe maintenance program for power plants.”

“We will optimize operations and equipment to stabilize the electrical system, and develop a work plan for system maintenance to meet demand, save energy, and have high quality electricity without interruption,” he said.

About the hurricane season
During the briefing, Ramos-Rodríguez said PREPA has a contingency plan, staff assigned to work areas, materials in warehouses, and coordination with U.S. mainland and Puerto Rico-based utilities for support.

Once PREPA’s infrastructure projects and fiscal plan are in place, “Puerto Rico’s energy grid will be modern, technological and highly reliable,” he added.

PREPA is currently in under a court-supervised debt restructuring process with its creditors to pay back some $9 billion it owes, as part of the Commonwealth’s bankruptcy proceeding under the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA.)

Historically, the public corporation’s infrastructure has shown its fragility during stormy weather — and on sunny days as well — which have meant often lengthy power outages for consumers. The hurricane season reaches its peak this month and runs through November.

Private sector weighs in on proposed rate hike
On Monday, the Puerto Rico Institute of Competitiveness and Economic Sustainability (ICSE-PR) rejected a proposed rate hike raised by PREPA bondholders and insurers in court, stating it would be counterproductive for Puerto Rico’s economic development and competitiveness.

In a motion, the nonprofit proposed a transformation plan that achieves “a regulated system based on international best practices that support more and cleaner energy at less than 21 cents per kilowatt-hour in our homes and 15 cents in our industry and business,” said Tomás J. Torres, executive director of ICSE-PR.

“An increase in the electricity bill would be detrimental to Puerto Rico economy and the necessary economic development,” said Torres, noting that the island’s commercial energy rates hover at .19 cents per kWh.

“Our electrical system has historically lacked transparency and independent oversight. After achieving total electrification of the island, a necessary process of renewal was not conducted, especially in the generation fleet, adjusting it to new renewable and distributed energy trends,” he added.

“Now the scenario is one of insolvency that requires profound changes, based on strong independent oversight that can be strengthened through the PROMESA Act. This is in line with the approval of PREPA’s debt restructuring under Title III in federal bankruptcy court,” Torres said.

Author Details
Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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