A Trump administration energy official and House lawmakers blasted Puerto Rico’s state-run, bankrupt power utility Wednesday for organizational failures that slowed its response to repairing the island’s power grid after Hurricane Maria destroyed it in September.
Some 10 months after the storm, almost 500 customers still don’t have electricity.
Bruce Walker, the Energy Department’s assistant secretary at the Office of Electricity, used unusually blunt terms to say the Puerto Rico Electric Power Authority, or PREPA, is tarred by political interference, and called for removing oversight power of the utility from the island’s governor, Ricardo Rossello.
He said the Trump administration is spending $6 billion to help repair Puerto Rico’s power grid.
“I am a little dismayed because we keep dancing around the issue and no one wants to talk about it,” Walker said in testimony to the House Natural Resources Committee. “Let’s face it: we are dealing with a municipal entity that is politically driven. Solve the politics and take it away from the politicians.”
Walker said PREPA and a regulatory commission that oversees it should have independent boards with no one appointed by Rossello.
The tough words directed at Rossello come after the governor spurned an invitation to testify at a House Natural Resources Committee hearing focused on the “management crisis” at PREPA.
The Democratic governor is upset that the Republican-led committee tweeted at him this week in a way that he found offensive. The committee tweeted a photo of a letter inviting Rossello to testify, with a post directed at him saying, “Call your office, @RicardoRossello.”
“I do not plan to attend the hearing because my attendance would legitimize a political exercise that was organized for the sole purpose of promoting flawed legislation that would severely hamper our reconstruction,” Rossello wrote in a letter Wednesday to the committee, referring to potential legislation to overhaul PREPA’s oversight.
Wednesday’s hearing was designed to address recent resignations at PREPA.
Most of the board of directors for PREPA resigned earlier this month after Rossello demanded a pay cut for the utility’s incoming CEO, Rafael Díaz-Granados.
The prior CEO, Walter Higgins, who was appointed in March, had just resigned the day before. He too cited opposition from Puerto Rican politicians regarding his compensation. The latest CEO, José F. Ortiz, began his tenure this week.
But the hearing took other turns, focused on how to reform PREPA, potentially by privatizing it or by getting rid of the utility all together.
PREPA filed for bankruptcy last year, and is facing $9 billion in debt.
The House Natural Resources Committee is investigating accusations of corruption against PREPA based on reports that some of the utility’s employees resorted to bribery and favoritism when restoring power.
“PREPA is now something considered to be bankrupt, mismanaged, and politically dominated, and has problems that need to be resolved if we are looking out for the American citizens of Puerto Rico,” said Rob Bishop, R-Utah, the committee chairman. “The status quo is not working.”
The Energy Department released a report last month recommending ways to make Puerto Rico’s power grid more resilient from future disasters, and criticizing PREPA’s performance during Maria.
The report said Puerto Rico should get more of its power from renewables, as required by local law, and lessen its dependence on imported fossil fuels.
The Energy Department also said Puerto Rico should implement rules to facilitate the development of microgrids that can operate independently from the main power system, and must incorporate battery storage technologies that can capture renewable power for use during times when the sun isn’t shining and wind is not blowing.
It criticized PREPA for waiting six weeks after Hurricane Maria to request mutual aid from mainland utilities to help restore power after the storm.
Rossello, the governor, released written testimony to the committee claiming he has helped Puerto Rico make “substantial progress” towards those goals. He has started a process to privatize PREPA to lower costs, and is reforming regulations to make it easier for the development of microgrids, and other new technologies.
“We have moved aggressively to be in a position to attract private investment for the island, modernize the island’s energy grid and create a system that is more resilient and reliable,” Rossello said.
The governor also rejected allegations that PREPA is subject to political influence.
“I understand that the recent management changes at PREPA raised certain concerns but I assure you that those changes are not indicative of political interference with the management or operation of PREPA,” Rossello said.
Eduardo Bhatia, the Democratic minority leader of the Senate in Puerto Rico, countered that PREPA is beyond repair. Rather than privatizing PREPA, Bhatia testified to the committee that the utility should be disbanded, in favor of an open market system with multiple power providers.
“I have no doubt there has been fraud, corruption and waste at PREPA,” Bhatia said. “There is no question about it. Let’s stop this monopoly. Let’s open up the market. The idea of this committee trying to fix PREPA, good luck. If PREPA wants to exist, it should compete with modern, clean, cheaper producers of energy.”
Rep. Don Young, R-Alaska, favors privatization and suggested that “everyone is smoking pot” if they think PREPA should be kept in government hands.
“We are going to privatize this unit,” he said. “It has been a failure to the Puerto Rican people who deserve better, and they won’t get it through a government run energy unit.”
Walker of the Energy Department said despite the problems, and billions spent on Puerto Rico’s power needs, the federal government is not considering taking over PREPA, as some rumors have implied.
“There are some things we can do that can help solve the problem without federalizing this and putting the burden on the rest of the taxpayers across the U.S.,” Walker said. “We don’t want to federalize PREPA.”
