Economics Hamper Power Improvements in Puerto Rico

Puerto Rico has been battered by natural disasters in recent years, with hurricanes Irma and Maria in 2017, and a series of earthquakes in late December 2019 and early January 2020, causing widespread damage and wreaking havoc on the island’s power infrastructure (Figure 1). The country’s major public utility, Puerto Rico Electric Power Authority (PREPA), has been weathering its own storm as it seeks to escape billions of dollars in debt through a restructuring process, with hearings on the group’s Restructuring Support Agreement (RSA) postponed several times, and now scheduled for the end of March.

1. Light poles pull on power lines along a street in Puerto Rico after Hurricane Maria hit the island in September 2017. Many areas of the U.S. territory were without power for as much as a year after the storm, which caused billions of dollars of damage across the island. Courtesy: 1st Sgt. Waldemar Rivera, Puerto Rico National Guard / Creative Commons

The island’s government has been in upheaval, with the territory stuck in a 13-year recession. Puerto Rico is moving through a bankruptcy process as the island tries to restructure about $120 billion of debt and pension obligations. The territory’s former governor, Ricardo Rossello, resigned in August 2019 amid massive protests. He was replaced by Wanda Vázquez Garced, the former secretary of justice, and herself the target of allegations of corruption due to the government’s handling of contracts related to clean-up after the 2017 storms.

Fixes to the island’s power infrastructure took months after Irma and Maria, with some areas still recovering, and the January earthquake brought more problems as it caused major damage to Puerto Rico’s largest power plant, the 990-MW Costa Sur facility. Water boilers used to generate electricity at the plant came off their bases after the quake, according to El Nuevo Día, the island’s largest newspaper. Structural damage at the plant includes cracks that caused oil spills.

Jose Ortiz, PREPA’s executive director, told an island radio station that Costa Sur could be offline for up to a year. Ortiz said just days after the largest earthquake on Jan. 7: “Costa Sur is a disaster. There is structural damage and damage to equipment. Repairs could take months, perhaps up to one year. It’s really unsafe to be there right now. It’s life-threatening. Yesterday when we were inspecting it with the people from FEMA [Federal Emergency Management Agency] we had to leave when an aftershock started.”

Ortiz has said the island will use generators from FEMA to at least temporarily provide power. Alexis Kwasinski, associate professor in the department of Electrical and Computer Engineering for the Swanson School of Engineering at the University of Pittsburgh, told POWER that the island’s economic problems have and will continue to hamper efforts to not only bring power back, but also to upgrade infrastructure to make the country’s grid more resilient after future hurricanes and earthquakes.

“The main issue has been all about money. Hurricane Maria was not the first storm to cause destruction, and economic disruptions,” Kwasinski said. “There have always been technological issues, and design issues on the grid, that have brought complications. Maintenance being put off, components that are not replaced because they don’t have money to do that, that was the situation before Maria.”

Government officials in October 2019 provided details of a $20 billion plan to strengthen and modernize the U.S. territory’s power grid. The 10-year plan, announced before the recent earthquakes inflicted more damage, calls for burying power lines, increasing the use of natural gas for power generation, and creating a transmission and distribution system that will withstand winds of at least 160 mph instead of 145 mph. Officials said at least 60% of the estimated $20 billion will be used for transmission and distribution repairs; at least $13 billion is expected to come from the U.S. federal government, according to reports.

“Without money, it’s hard to upgrade the grid and come up with solutions,” Kwasinski said. “They got significant investment in money after Maria, but that was to recover the grid. What they need to do for the future is to upgrade and replace much of the power generation. The question is, ‘Who is going to invest in Puerto Rico?’ I don’t know who is going to invest there. Investors who are willing to risk their capital, which I doubt, because of the economic situation. Money is coming from the federal government, and I don’t think there is another option at this time.”

The loss of power from Costa Sur complicates immediate upgrades to the generation, transmission, and distribution systems. “That’s probably going to mean rationing, or rolling blackouts, for the foreseeable future,” Javier Rúa-Jovet, the policy director for Sunrun, a company that produces and installs solar microgrids, told the Fast Company news service in January.

Several companies, including Sunrun, donated equipment to Puerto Rico to provide power after Maria, with some of that technology still in use. Tesla donated batteries to store solar power at a children’s hospital and other facilities, including a water treatment plant. Sunrun donated its systems to three fire stations in Puerto Rico, which also relied on the technology after the recent earthquakes. Sonnen, which makes battery storage technology, installed emergency microgrids at 11 community centers, and also has put batteries at sites in rural areas that were without electricity for as much as a year after Maria. Much of that power was designed to be temporary, but it is still being used more than two years after that hurricane.

“They need to fix what’s broken from Maria, and what’s damaged now, with a sense of not short term, but to think long term,” Kwasinski said. “Some of the fixes that were done after Maria, that was more thinking as a short-term solution. They need to start thinking long term, or else they’re going to be facing the same issues again, another hurricane, another earthquake, or what have you.”

Kwasinski said the island’s financial situation will make permanent fixes a difficult process. “They need to figure out how to improve operations with PREPA and the current economics,” Kwasinski said. “If they don’t have enough money to do maintenance, the next hurricane they’re going to go through this again. Unless they start thinking long-term, they are going to have the same problems. That’s a lesson that’s important not only for Puerto Rico; there are places in the U.S. with the same situation. There are electric utilities in the U.S. already in a stressed financial situation. That’s a systemic issue, and not only for Puerto Rico.”

—Darrell Proctor is a POWER associate editor.