The head of Puerto Rico’s fledgling state-owned power utility resigned Friday, almost 60 days after Hurricane Maria ravaged the island’s electricity grid.
Puerto Rico Gov. Ricardo Rossello told local reporters that Ricardo Ramos resigned as executive director of the Puerto Rico Electric Power Authority, or PREPA.
“The resignation was worked on … in the best interest of the people of Puerto Rico,” Rossello said, according to the news outlet Caribbean Business, in comments translated from Spanish. The governor said Ramos had caused “distractions” at PREPA despite working in a “professional” manner.
“The director is a professional,” Rossello said. “A time has come when it is unsustainable, and for the benefit of the people of Puerto Rico, that decision was made. I’m not focused on past actions, I’m focused on the future. I expect an effective, immediate transition, that we can continue with the pace of restoring energy.”
Ramos, who took over PREPA in March, testified before Congress this week to defend the utility’s work after Maria. Less than half the island’s electricity had been restored as of Friday and the island suffered a new major outage on Wednesday.
Ramos and PREPA have been especially criticized for signing a $300 million contract with small Montana firm Whitefish Energy to restore the island’s power.
Ramos told members of the Senate Energy and Natural Resources Committee on Tuesday that the Whitefish contract was the most realistic solution to respond to immediate energy needs after Maria. He said Whitefish was one of a half-dozen companies to offer assistance to restore the island’s destroyed energy grid.
Two of those offers were to provide immediate assistance, Ramos said, but one required an upfront $25 million payment.
Ramos said the companies that made offers to PREPA for power restoration gave similar rates to Whitefish.
“If there was price gouging, it involved six companies,” Ramos said.
He said Whitefish separated itself from the others by telling PREPA, which is bankrupt,that it could pay for work after it was completed, in addition to mobilization and demobilization costs.
“In retrospect, there are some steps in our contracting process with Whitefish that we could have done better,” Ramos said. “I chose to contract with Whitefish because my priority was securing the immediate assistance that we needed to begin restoring power as quickly as possible to our most critical customers.”
“Taxpayer money was never at risk,” he added. “There was never an expenditure of $300 million.”
PREPA was failing before Maria hit and has been susceptible to political influence and corruption. It is responsible for $9 billion of Puerto Rico’s $73 billion debt load.
The power utility, heavily dependent on Venezuelan oil, has aging power plants and has not maintained its energy infrastructure. It has lost two-thirds of its workforce in the past three years, as residents migrate to the mainland U.S. to escape the island's financial woes and a stagnant economy.
“I can attest that historically certainly it's very hard to manage PREPA being a big corporation that is a part of the government,” Ramos told Congress this week. “Certainly [there has been] too much intervention by government officials. Subsidies have killed PREPA in its finances. PREPA has been a company where politicians, and parts of government, can get their family members to get work.”
Ramos said political patronage is no longer a problem at PREPA, noting that he and the power utility's board of directors were now in charge of approving staff.
Rossello in his own Senate testimony this week said he is considering ways to overhaul PREPA, including privatizing it.