Who will be Puerto Rico’s energy crisis savior?

by | Dec 6, 2017 | Economy, Headlines | Comments

Puerto Rico is in on the verge of the worst electricity outage in US history. Over half of the US island territory is still without power even though two months have passed since the catastrophic Hurricane Maria made landfall. In response, droves of Puerto Ricans are fleeing to the United States in hopes to return to somewhat normal living. The vast majority though, are electing to stay and begin to rebuild, fueled by the pride they have for their homeland. Unfortunately, the Puerto Ricans don’t have the resources to fix this situation and there isn’t a strategic plan to solve a complicated problem long term. Things weren’t exactly in appropriate shape pre-Maria though. Despite being part of the United States, Puerto Rico has an electrical grid similar to the impoverished nations in Africa and Southeast Asia.

The transmission lines and power plants of the Puerto Rico Electric Power Authority, also known as PREPA, were crumbling from lack of maintenance causing blackouts years before the storm was even a twinkle in Mother Nature’s eye. This poor grid system made citizens rely heavily on expensive diesel fuel. Energy prices were higher than any utility on the mainland. Surprisingly though, PREPA was financially broke, filing for bankruptcy after failing to make payments on part of its $9 billion debt. Hurricane Maria, which hit Puerto Rico on September 20 as a Category 4 hurricane, caused the entire electric grid to collapse.

To add more problems for the US territory, Whitefish Energy, a tiny Montana company comprised of only two full time employees, was awarded a $300 million contract to help restore power in Puerto Rico. The contract contained provisions barring the government from reviewing labor costs or profits related to the company’s work in Puerto Rico. Whitefish, with so few employees, relied heavily on Puerto Rican subcontractors, and with the provisions protecting the company, paid the workers as little as $63 per hour while receiving $319 per hour for the work, with the rest going to the coffers of Whitefish. The small energy company is also said to have internal ties with the US’s Interior Secretary Ryan Zinke. The territory canceled the contract with Whitefish Energy on October 29 following the controversy surrounding the deal and the FBI announcing that it was investigating the contract and how Whitefish and PREPA came to the agreement.

With Puerto Rico’s dilapidated energy grid and misfortune, how does Puerto Rico change the tide and solve its energy crisis, provide its citizens energy now and ensure such a failure doesn’t happen again?

This crisis should be a wake-up call to the islands that they desperately needs to move to a less centralized power system — and that solar power might be part of the solution. Elon Musk, the CEO of electric-car maker Tesla (TSLA), turned the lights on at San Juan’s Children’s hospital using rooftop solar panels and batteries and also suggested his company’s solar power unit could be a long-term solution via Twitter. Tesla has built solar energy grids for islands before, such as Kauai in Hawaii. However, that island’s population is about 70,000 people. Puerto Rico has 3.4 million residents. If Puerto Rico would follow the lead of many developing nations where solar power production is expanding rapidly, they would have an opportunity in the wake of tragedy to rebuild smarter and rebuild better. Remote and undeveloped areas lacking in utility infrastructure are perhaps the most ripe for solar energy, especially near the equator. Other companies such as ReVision Energy and Dominion are donating multiple solar grids in an attempt to restore supplemental emergency power for basic lighting, small electronics, communications but not buildings and is 100% volunteer donation.

Musk won’t be the absolute savior Puerto Rico is looking for and neither will any individual private company such as Whitefish, ReVision or Dominion. Solar has the capability to supply a substantial amount of the island’s power, but won’t be able to replace the entirety of Puerto Rico’s grid nor will the islands be able to rely on it completely. Even if they restore their power grids, the cost of energy for the territory is still substantially higher than the US states and it makes Puerto Rico rely on diesel, which is extremely harmful to the environment. Overall, Puerto Rico can’t get stuck in an “either or” mentality. They should use a combination of energy production techniques, looking at alternative means of providing energy via wind and water power. Puerto Rico should also utilize different companies to replace traditional power plants where it makes sense and in places that have been too devastated as well as remote locations… solar and alternative energy can be the long term answer. Ultimately, the true savior for Puerto Rico will be its own people, choosing to use smart and economically wise techniques to provide energy for the people that desperately need a change in their fortune and Puerto Rican pride will be the fuel to lead the US territory to a brighter future.