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Puerto Rico Electric Power Authority

The Puerto Rico Electric Power Authority (PREPA) —Spanish: Autoridad de Energía Eléctrica (AEE)— is an electric power company and the government-owned corporation of Puerto Rico responsible for electricity generation, power distribution, and power transmission on the island.[1] PREPA is the only entity authorized to conduct such business in Puerto Rico, making it a government monopoly. The authority is ruled by a board of directors appointed by the governor with the advice and consent of the Senate. Since 2014, PREPA is subject to the Puerto Rico Energy Commission, another government agency whose board of directors is also appointed by the governor.

Puerto Rico Electric Power Authority
Puerto-rico-electric-power-authority-authority-emblem.jpg
Agency overview
Formed May 2, 1941; 76 years ago (1941-05-02)
Headquarters San Juan, Puerto Rico
Agency executive
  • Justo González, Interim Executive Director
Key document
Website www.aeepr.com

Hurricane Maria in September 2017 destroyed PREPAs distribution network, creating a blackout in all parts of the island. [2]

Contents

HistoryEdit

PREPA was originally named the Puerto Rico Water Resources Authority (PRWRA) —Spanish: Autoridad de las Fuentes Fluviales (AFF)— which was created by Law No. 83 of May 2, 1941[3] during the governorship of Rexford G. Tugwell. Government-owned, PRWRA unified diverse regional and local electric power companies into one unified electric grid.

Islandwide outagesEdit

Throughout its history, PREPA has suffered several outages that have left the entire island of Puerto Rico without power.

One of these islandwide outages occurred on September 20, 2016 when one of PREPA's plants—Central Aguirre—exploded.[citation needed] The explosion, caused by a lack of maintenance, left all of Puerto Rico without power for three days.[citation needed]

Hurricanes Irma and MariaEdit

When the eye of Hurricane Irma passed north of the island, the strong winds left 1 million residents without power. Power had been restored to 980,000 people by September 20, when Hurricane Maria struck, leaving nearly the entire island without power. Two weeks later, power had been restored to about 10% of customers.[4]Full restoration was expected to take months, and many Puerto Ricans bought generators.[5] Electric companies in unaffected areas ordinarily make contracts for speedy assistance to those hit by disaster, but in this case negotiations took weeks.[why?] The initial $300 million contract for power restoration was given to Whitefish Energy, a Montana company which had only two employees on the day the hurricane struck.[6] By December 2017, the Army Corps of Engineers had other contractors in place, along with with crews brought in through mutual aid agreements with utilities such as Con Edison.[7]

Six weeks after Hurricane Maria, 30% of customers had been restored.[8] After two months, almost half had been restored.[9]

StructureEdit

Board of directorsEdit

The board of directors is the governing body of the Puerto Rico Electric Power Authority. Its membership usually consists of private citizens who are supposed to represent the public interest and may or may not include exofficio political officeholders (typically the Secretary of Economic Development and Commerce). This inconsistency happens as the board's structure changes whenever a political party gains power, usually every four or eight years. When both the governor and the legislature of Puerto Rico belong to the same party, one of the earliest laws amended by the legislature is the one governing PREPA in order to change its board's composition. Once a new board is settled in, one of its first resolutions is to appoint a new executive director. These frequent changes effectively make the authority a partisan tool rather than a mere electric utility and, consequently, change the vision, strategy, and plans of the authority every four or eight years according to the political party in power.

Of the different members of the board, the governor is usually required to appoint four members with the advice and consent of the Senate. It is through these members, along with the incumbent political officeholders which serve as ex officio, thus the governor and the political party in power effectively control the authority. Three additional members of the board are directly elected by consumers by plurality-at-large; two of them by residential consumers and one by commercial ones.

The last structural change to the board occurred on June 25, 2013 after governor Alejandro García Padilla enacted Act 29 of 2013 together with the 17th Legislative Assembly.[10] The act effectively replaced the incumbent board with an entirely new board, as follows:

2013 PREPA Board of Directors[11]
Role Representation Name Appointed by García Padilla Remarks
Chairman Public interest Harry Rodríguez García   Yes Chemical engineer, Vice President and General Manager of Abbott Laboratories Puerto Rico
Vice Chairman Elected by consumers Agustín Irizarry Rivera   No Professor of electrical engineering at the University of Puerto Rico
Secretary Exofficio Miguel Torres Díaz   Yes Secretary of Transportation and Public Works
At-large Exofficio Alberto Bacó Bagué   Yes Secretary of Economic Development and Commerce
At-large Public interest Andrés Salas Soler   Yes former judge and attorney-at-law
At-large Public interest Javier Quintana Méndez   Yes Dean of the school of engineering of the Interamerican University of Puerto Rico
At-large Elected by consumers Juan Rosario   No environmental activist
At-large Elected by consumers vacant   No
At-large Public interest vacant   Yes

Power plantsEdit

PREPA serves close to 1.5 million customers through several power plants:[12][13]

Power plant Capacity Energy source Ownership Owner Operator Location
AES Ilumina[14] 24 MW solar power private AES Corporation AES Corporation Guayama
AES Puerto Rico[15] 454 MW coal private AES Corporation AES Corporation Guayama
Aguirre Combined Cycle[16] 592 MW heavy fuel oil publicly owned PREPA PREPA Salinas
Aguirre Thermoelectric[16] 900 MW diesel oil publicly owned PREPA PREPA Salinas
Cambalache 247 MW diesel oil publicly owned PREPA PREPA Arecibo
Costa Sur 990 MW heavy fuel oil publicly owned PREPA PREPA Guayanilla
EcoEléctrica[17] 510 MW natural gas private Gas Natural Fenosa, International Power Gas Natural Fenosa Peñuelas
Oriana Solar Farm[18] 45 MW (58MW(DC)) solar power private Sonnedix Sonnedix Isabela
Palo Seco 602 MW heavy fuel oil publicly owned PREPA PREPA Cataño
Punta Lima 26 MW wind power private Sovereign Bank[19] Gestamp Wind Naguabo
Salinas Solar Park[20] 16 MW solar power private Sonnedix Sonnedix Salinas
San Juan Combined Cycle[21] 464 MW diesel oil publicly owned PREPA PREPA San Juan
San Juan Thermoelectric[21] 400 MW heavy fuel oil publicly owned PREPA PREPA San Juan
San Fermin Solar Farm[22][23] 27 MW solar power private Uriel Renewables and Coqui Power Uriel Renewables and Coqui Power Loiza
Santa Isabel Wind Farm[24] 75 MW wind power private Pattern Energy[25] Pattern Energy Santa Isabel
Windmar Ponce[26] 4.5 MW solar power private Windmar Renewable Energy Windmar Renewable Energy Ponce

Puerto Rico has 21 hydroelectric plants rated at a combined 156MW.[27][22]

SubsidiariesEdit

The public corporation also provides fiber optic broadband to private carriers through one of its subsidiary, PREPA Networks. PREPA is also studying the possibility of selling energy to the United States Virgin Islands with the installation of an underwater power cable between Fajardo and the island of St. Thomas—similar to the power cable with which it services its clients in Vieques and Culebra, which are also islands.[28]

Labor unionsEdit

There are four labor unions that represent the workers from the authority exclusively UTIER, UITICE, UEPI, and UPAEE.[29][30]

FinancesEdit

 
PREPA's operating expenses for FY2013 denote how fuel purchases take over 58% of the authority's operating expenses.

As of 2014 the authority carries liabilities of $10.1 billion USD against assets of $6 billion.[31] It also operates with a deficit of about $354 million against revenues of $4.8 billion.[32][33] In terms of costs, $2.6 billion or about 58% of PREPA's expenses are attributed to fuel purchases alone while salaries and collective bargains represent less than 13% of the authority's expenses.[33]

On May 23, 2014, Citigroup severely curtailed PREPA's line of credit for fuel purchase, forcing PREPA to run out of cash to pay Petrobras, its main oil supplier. Petrobras, in turn, threatened to cut off further shipments to the authority. This forced the authority to take $100 million out of its Capital Improvements Fund in order to pay its debt to Petrobras. PREPA argues that the different agencies of the government of Puerto Rico owe them more than $290 million in debt, while an additional $375 million of revenue is lost through subsidies enacted by the Puerto Rican legislature.[34][35][36][37][38] An additional $600 million is owed to the authority by residential and commercial consumers, some of them by consumers living in public housing.[39][40] The authority argues that it wouldn't have a problem being self-sufficient if it were paid the aforementioned debt and if it weren't forced to give out subsidies. On June 3, 2014, senator Ramón Luis Nieves admitted publicly that, "part of the financial problem at PREPA was provoked by the government and the Puerto Rican legislature."[38]

On June 11, 2014, Fitch Ratings downgraded its rating on the authority's to speculative non-investment grade ("junk status") from BB+ to BB while putting the authority on negative rating watch.[41] PREPA filed for bankruptcy in July 2017.[42]

GalleryEdit

ReferencesEdit

  1. ^ "Ley de la Autoridadf de Energia Electrica de Puerto Rico" (PDF). Presupuesto.gobierno.pr. Retrieved 2015-03-03. 
  2. ^ "Why Hurricane Maria left Puerto Rico completely without power". The Verge. Retrieved 2017-09-28. 
  3. ^ "Welcome to PREPA". Prepa.com. Retrieved 2015-03-03. 
  4. ^ "Special Report: The bankrupt utility behind Puerto Rico's power crisis". Reuters. 2017-10-05. Retrieved 2017-10-06. 
  5. ^ Fausset, Richard; Robles, Frances; Acosta, Deborah (2017-10-07). "Minus Electrical Grid, Puerto Rico Becomes Generator Island". The New York Times. ISSN 0362-4331. Retrieved 2017-10-11. 
  6. ^ Borak, Donna (October 25, 2017). "San Juan's mayor takes on small Montana firm over Puerto Rico power contract". CNN. 
  7. ^ "Working To Get The Lights Back On In Puerto Rico". Marketplace. December 1, 2017. Retrieved 12 December 2017. 
  8. ^ "Puerto Rico power restoration: Why it is taking so long". USA TODAY. Retrieved 2017-11-01. 
  9. ^ "When will Puerto Rico have power? Half of island still without electricity after head of power authority resigns". Newsweek. 2017-11-18. Retrieved 2017-11-24. 
  10. ^ Act No. 29 of 2013 (in Spanish)
  11. ^ https://web.archive.org/web/20140626024817/http://www.aeepr.com/jg/membersjg.asp. Archived from the original on June 26, 2014. Retrieved May 31, 2014.  Missing or empty |title= (help)
  12. ^ "Proponen suspender subsidios de la AEE por seis meses | El Nuevo Día". Elnuevodia.com. 2014-06-25. Retrieved 2015-03-03. 
  13. ^ "Welcome to PREPA". Prepa.com. Retrieved 2015-03-03. 
  14. ^ "Press Release". AES Solar. September 30, 2011. Retrieved September 7, 2013. 
  15. ^ "AES : Homepage". Aespuertorico.com. Retrieved 2015-03-03. 
  16. ^ a b "Central Aguirre" (in Spanish). Puerto Rico Electric Power Authority. Retrieved September 2, 2013. 
  17. ^ https://web.archive.org/web/20090416233535/http://ecoelectrica.com/ourfacilities/ourpowerplant.html. Archived from the original on April 16, 2009. Retrieved July 28, 2011.  Missing or empty |title= (help)
  18. ^ Oriana and Yarotek connect Caribbean's largest solar project to grid, pv-tech, Tom Kenning Sep 15, 2016
  19. ^ Kantrow, Michelle (March 12, 2013). "Punta Lima wind farm sold to Sovereign Bank for $88M". News Is My Business. Retrieved September 7, 2013. 
  20. ^ "Sonnedix and Yarotek reach commecial operation of 16 megawatt photovoltaic solar energy project in Puerto Rico | Sonnedix". Sonnedix. Retrieved 20 November 2017. 
  21. ^ a b "Central San Juan" (in Spanish). Puerto Rico Electric Power Authority. Retrieved September 2, 2013. 
  22. ^ a b PUERTO RICO Puerto Rico Profile, Territory Profile and Energy Estimates, U.S. Energy Information Administratrion, December 18, 2013
  23. ^ "27 MW Photovoltaic Plant". TSK. Retrieved 20 November 2017. 
  24. ^ Alvarado León, Gerardo (August 29, 2013). "Funcionando a máxima capacidad el parque eólico de Santa Isabel". El Nuevo Día (in Spanish). Retrieved August 29, 2013. 
  25. ^ "Finca de Viento Santa Isabel". Pattern Energy. Retrieved August 29, 2013. 
  26. ^ "En Ponce la finca fotovoltaica más grande". La Perla del Sur (in Spanish). Retrieved September 7, 2013. 
  27. ^ Puerto Rico, Renewable Facts
  28. ^ (PDF) https://web.archive.org/web/20130510150017/http://www.edinenergy.org/pdfs/51294.pdf. Archived from the original (PDF) on May 10, 2013. Retrieved May 31, 2014.  Missing or empty |title= (help)
  29. ^ "La AEE es" (in Spanish). Puerto Rico Electric Power Authority. Retrieved August 6, 2013. 
  30. ^ Unión de Trabajadores de la Industria Eléctrica y Riego vs. Héctor Medina Torres, 2011 CD 01 (November 7, 2011).
  31. ^ "Edición 14 de Abril 2014 by El Vocero de Puerto Rico". ISSUU. Retrieved 2015-03-03. 
  32. ^ "Gobernador y Junta Gobierno discuten finanzas AEE | El Vocero de Puerto Rico". Elvocero.com. Retrieved 2015-03-03. 
  33. ^ a b "Financial Statements, Required Supplementary Information and supplemental Schedules" (PDF). Pr.gov. Retrieved 2015-03-03. 
  34. ^ "AEE solicita al gobierno que suelte dinero para que agencias puedan pagar la luz – Metro". Metro.pr. Retrieved 2015-03-03. 
  35. ^ "Revisarán subsidios AEE y deudas de gobierno – Metro". Metro.pr. Retrieved 2015-03-03. 
  36. ^ https://web.archive.org/web/20140531101326/http://www.elnuevodia.com/subsidiospor1millonaldia-1623521.html. Archived from the original on May 31, 2014. Retrieved May 31, 2014.  Missing or empty |title= (help)
  37. ^ "Propuesta #4". Bajemos la factura. Retrieved 2015-03-03. 
  38. ^ a b Alvarado León, Gerardo (June 3, 2014). "Legislatura evaluará los subsidios energéticos". El Nuevo Día (in Spanish). printed version. 
  39. ^ "Propuesta #3". Bajemos la factura. Retrieved 2015-03-03. 
  40. ^ "Sube como la espuma la deuda millonaria que tiene los abonados de residenciales públicos con AEE -NotiUno 630 | Primeros Con La Noticia". Notiuno.com. 2014-06-20. Retrieved 2015-03-03. 
  41. ^ "UPDATE 1-Fitch cuts Puerto Rico electricity authority's rating again". Reuters. 2014-06-11. Retrieved 2015-03-03. 
  42. ^ https://www.nytimes.com/2017/07/02/business/puerto-ricos-electric-power-authority-effectively-files-for-bankruptcy.html

External linksEdit