Oct 5, 2022 • 33M

Puerto Rico's electricity crisis

A chat with lawyer and activist Ruth Santiago about the abysmal state of Puerto Rico's grid.

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David Roberts
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In this episode, Ruth Santiago, lawyer and environmental justice activist, discusses the abysmal state of Puerto Rico’s privatized electricity grid and how citizens might gain more resilience against hurricanes that can leave the island entirely without power.

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David Roberts

A couple of weeks ago, Hurricane Fiona struck Puerto Rico's southwest coast as a Category 1 storm. Even before the hurricane struck, the entire grid went down and the island was without power. Weeks later, power still hasn't been entirely restored. For Puerto Ricans, it is a nightmarish reminder of Hurricane Maria, which struck the island almost exactly five years earlier took the grid out for months.


After Maria, the Trump administration talked a big game about recovery and billions of dollars were set aside through FEMA, but on the ground, very little has changed. Puerto Rico's utility, PREPA, has declared bankruptcy and the grid was privatized, given over to a private company called Luma.

According to most Puerto Ricans, Luma has done very little to repair the existing grid and shows no interest at all in building a more modern, decentralized grid. Some islanders have been able to buy rooftop solar, which has proven invaluable in the past few weeks, but US tax credits are not available there and few can afford the upfront cost of PV & battery systems.

Ruth Santiago (Photo: Earthjustice)
Ruth Santiago (Photo: Earthjustice)

I wanted to talk to someone on the ground, who has seen these problems firsthand, so I called Ruth Santiago. Santiago is a lawyer and activist who has worked with numerous environmental justice groups in Puerto Rico. Lately, she has been advocating for the spread of rooftop solar and microgrids, to offer islanders greater resilience against future storms.

Her own rooftop solar was the only reason Santiago was able to connect with me, but unfortunately, the internet connection was not able to support a conversation. However, I really wanted to hear from someone on the island, so we created this podcast in a somewhat unusual and old-fashioned way: I recorded questions and sent them to her; she recorded answers and sent them back.

Consequently, this pod lacks some of the conversational atmosphere I normally like, but I think it is extremely informative. My thanks to Santiago for all her efforts in getting this to work.

So with no further ado, Ruth Santiago, welcome to Volts, and thank you for coming.

Ruth Santiago

Hi, David. Thanks for the opportunity to be on the Volts podcast.

David Roberts

Let's start here. What is going on in Puerto Rico right now? What is the state of the emergency recovery? How many people have had their power restored?

Ruth Santiago

So twelve days into the passage of Hurricane Fiona, which as you know, was mostly a tropical storm as it passed just south of Puerto Rico, and then at the end became a Category 1 hurricane when it touched the southwestern tip. The recovery has been very slow. Hundreds of thousands of people actually are still without power. The last figure I've seen is that 82% of the roughly 1.5 million rate payers here, clients of the electric company, have power. And so that means that roughly half a million people still do not have power. So that's been very slow.

But most people do have water service. That's been faster, even though, to a large extent, water service is dependent on electric power, or some kind of system, to power the pumps. But some of those facilities, the water facilities have solar, others have generators. Generators have failed a lot, and that has also impacted telecommunications. The death toll is mounting, currently around 25, related to the hurricane. Another thing that's very present on people's minds is the hurricane that has just hit Florida, Hurricane Ian, and it's on its way to the Carolinas. The flooding that we saw there is similar to what we've experienced here, historically, and so very concerned about the people there.

It's very ironic that many people from Puerto Rico fled to Florida, central Florida area, especially, after a Hurricane Maria and are probably going to be hit again, or were probably hit again, by Hurricane Ian.

David Roberts

What energy sources does the Puerto Rico grid draw on today? Where are the power plants, and where are the people, and how are they connected? And is there any clean energy in the system at all?

Ruth Santiago

The largest source of energy generation here is the, so called, natural gas, methane gas. About 44% of the energy generated comes from burning that. Another third, or so, is based on residual fuel oils. Some of it is diesel, some of it is what is known as bunker sea, very dirty, high sulfur fuel oil. And roughly 17/18% comes from burning coal. And so that leaves very little for renewables. We do have some utility scale renewable projects that are connected to the grid that, unfortunately, took a very long time after Hurricane Maria to connect because they depend on our centralized grid.

And our grid here basically runs from the big power plants here in southern Puerto Rico, Salinas, Guayama, especially in southwestern PR. So the transmission lines run north mostly from those plants, but elsewhere also. And they have to cross the central mountain range, and a very dense tropical vegetation, into the San Juan metro area and northern Puerto Rico. And so that route from south to north makes those transmission and distribution lines very vulnerable. The hurricanes usually come in from the east, cross the island in some way, and usually exit in western Puerto Rico. So a lot of that centralized transmission-distribution system is usually in the path of hurricanes.

That makes even utility scale projects very vulnerable, as opposed to, say, distributed renewable energy projects that don't depend as much, or in some cases not at all, on distribution or transmission lines. And so there's a bit of that locally. People who are able to afford rooftop solar are doing that in a pretty significant way. But the actual percentage of the population that can afford to install rooftop solar, because the leases and the down payments are more than most people can pay here. So it's basically a small percentage of people who can actually afford to have rooftop solar and storage. But yeah, people who are able to afford it are doing that quickly.

David Roberts

Five years ago, Hurricane Maria practically wiped out the Puerto Rico grid. Afterward there was a lot of talk about rebuilding, lots of promises were made. Now a much smaller hurricane wiped out the grid again. Why is Puerto Rico's grid still so vulnerable?

Ruth Santiago

So after Hurricane Maria, as you noted, the electric grid was pretty much taken down, altogether, because of the centralized design that we talked about. But, also, a lot of the issues related to the bankruptcy situation with the Puerto Rico Electric Power Authority not doing the necessary maintenance. And, of course, there was a lot of money invested in the emergency, so called emergency repairs, I think it was about $3 billion.

And there's been a huge amount of funds allocated for, so called, permanent work to the grid that there's debate about whether that has really started to any extent. There's numbers that range from 40 million to 183 million. But even that is just a small amount of the historic amount of FEMA funds and other disaster recovery funds that have been allocated for the electric system here, which some calculate to be as much as 16 billion. But unfortunately, the government of Puerto Rico and a company called LUMA Energy, which is now operating the grid, is just set on rebuilding the centralized grid, not doing undistributed renewables. And so that makes all of Puerto Rico more vulnerable.

David Roberts

After Maria, the Puerto Rican Electric Power Authority, or PREPA, declared bankruptcy, and there was a process of partial privatization. Tell us about that process and a little bit about LUMA, the company that was put in charge of the grid.

Ruth Santiago

The bankruptcy situation with the Puerto Rico Electric Power Authority brought in what is known as the Fiscal Oversight Management Board, created by a federal law called PROMESA. It's supposed to be Puerto Rico Oversight, Management, and Economic Stability Act. We haven't seen much of the economic stability part of it. And these FEMA and other disaster recovery funds, could play a big role, actually, in providing economic stability here. But that's not what is happening.

So what we're seeing is that with the bankruptcy, the Fiscal Oversight Management Board has been, it seems like, the main force towards handing over operation and so called maintenance of the grid to a company called LUMA Energy. It's a joint venture between Quanta Services, a big transmission company from Texas, and ATCO Canadian Utilities. And they created this joint venture called LUMA. LUMA-Quanta Services, like, doubled its lobbying funds back in 2019, 2020 and was able to get this contract through its joint venture at LUMA to, as I mentioned, operate and maintain the Puerto Rico grid. And this company, Quanta Services, even announced in its press release to investors that this joint venture that they controlled would be in charge of this historic amount of disaster recovery funds, in which the company affiliates and the company, itself, could bid.

So they're expecting a big windfall from this historic amount of disaster recovery funds that are available for the electric system in Puerto Rico, but have not been used. To a great extent.

David Roberts

LUMA seems quite unpopular today in Puerto Rico. What should it have done differently?

Ruth Santiago

There has not been any perceptible work towards really changing the grid design, with this historic amount of funds, or really facilitating distributed renewable energy in Puerto Rico. And that, in large part is, due to LUMA Energy's interest in just rebuilding the same centralized, what I call 20th century, grid and not helping Puerto Rico come into the 21st century. So you're asking, why are people complaining about LUMA? The experience has been since LUMA took over, actual operation and maintenance of the grid, is that we have seen more frequent and more extended power outages after LUMA took over the grid operation in June of 2021.

And we should note that LUMA actually had a whole year, prior to taking over the operation, to become familiar with the system. But LUMA has made some really bad mistakes. First of all, their business model is just to rebuild and perpetuate, sort of, that 20th century grid, centralized system, that's all vulnerable to hurricanes and lots of other impacts, even just vegetation impacts. And, of course, LUMA did not facilitate the hiring or the experienced PREPA workforce to stay on because the work conditions that LUMA was offering was not something acceptable to most of the workers. And so they had an option to move to other government agencies and did that because what LUMA was offering was not really providing the employment security that they needed.

And so what we've seen, unfortunately, is that we've lost a lot of the experienced workforce that really knows this very complex electric grid that we have here in Puerto Rico. And that, of course, has resulted, in what I mentioned, lots of more frequent and extended power outages. Even the voltage fluctuations have been terrible. I just recently received an order from the Puerto Rico Department of Natural Environmental Resources saying that a voltage fluctuation caused their whole webpage to go down. And that's all in LUMA's control. And this was even before Hurricane Fiona.

And much more serious things have happened, right? We've seen hospitals lose power and damage to their backup generators, apparently, related to the voltage fluctuations. So it's been a disaster. I sometimes call it, and others call it this, like Hurricane LUMA, even before we had the Hurricane Fiona come in. Also, we haven't seen the basic vegetation management being done. And that aggravated the impacts of Hurricane Fiona to the electric system. And I guess that's why, twelve days into this, there's still hundreds of thousands of people without power. LUMA's estimate was that by today, 91% of people would have power, but that remains to be seen.

And in any event, there's no estimate of when that balance of people which, as I said right now is hundreds of thousands of people, when they will have access to energy. And that, of course, means potential life-threatening situations. Because people who can't power medical equipment, like nebulizers, or access medical treatment, or properly store medication, or just have access to healthy food, right? Because their refrigerators are not powered. That could potentially be life-threatening. And because the other essential services, like water and communications are linked to a large extent to electric supply, that really complicates the situation, and still an ongoing situation here.

David Roberts

PREPA is still in bankruptcy and just recently, as the hurricane was striking, failed again to come to terms with its creditors. What is the future for PREPA? Can it even survive?

Ruth Santiago

Getting back to PREPA's bankruptcy, there was news of a possible breakdown in the mediation talks between the creditors, the big bondholders, and bond insurance companies, that apparently now will be resumed. The judge in the case has ordered the parties to get back to the mediation table and talk, but also be able to litigate the legality of some of those bondholder claims. I mean, everyone knows we have the highest, I think right now, the highest electric rate of any US jurisdiction. It's been as high as $0.36, recently, per kilowatt hour. Yet the situation here, as you know, is a very high poverty rate of about 44%. The median income is about a third of the US income. So that bankruptcy situation and that push by these big bondholders, many of which acquired the PREPA bonds after it was clear that PREPA was headed for bankruptcy and pay pennies on the dollar, are now pushing for almost full recovery of the initial bond values. That spells disaster for Puerto Rico's viability as a place, and, certainly, it's not affordable for most of the population here. And I think that these high electric rates, and also this situation with the power outages, is pushing people out, and as I said, unfortunately, a lot of them going to Florida and experiencing hurricanes as well over there.

This is so ironic, and there's such a contrast here between that situation, the bankruptcy, and on the other hand, the access that Puerto Rico, especially PREPA, has to a historic amount of FEMA disaster and other disaster recovery funds, which, as I said, some calculated is up to $16 billion. That historic amount of funds could be used by PREPA. It's been allocated to PREPA. If PREPA has the possibility of using that for distributed renewables. And I think PREPA survival will depend on whether and how that money is used, and whether PREPA heeds civil society calls for the use of those funds for distributed renewables, like rooftop solar and storage.

I am part of a civil society coalition called We Want Sun, Queremossol, and the groups I work with that are part of the Queremossol Coalition, advocate precisely for using that historic amount. That 16 billion, and probably more than enough, to equip people in Puerto Rico, especially low-income, moderate-income people, with rooftop solar, and batteries, and related alternatives, like energy efficiency measures. That would be one way in which we could rapidly provide access to life-saving, distributed renewable energy to residents, and businesses, and institutions, schools, et cetera, here, in Puerto Rico.

Interestingly, a few weeks ago, PREPA actually submitted a motion to the Puerto Rico Energy Bureau saying that they would do a very small amount of rooftop solar with the historic amount of funds. But the number is just pale in comparison. PREPA is talking about, possibly, using 34 million for distributed renewables out of the this huge pot of about 16 billion. So that that last number was with a "B," and the first was with the an "M." So we know that that is a very limited amount of funding, and that it should really, probably, look just the opposite of that. So that the bulk of the money should go for distributed renewables. So that we don't see this constant cycle of destruction of the grid, reconstruction, often with federal disaster recovery funds, and then destruction again within the next storm.

And it's just incredible that a Category 1 storm, a hurricane like Fiona — that just didn't even enter the island until the very end and didn't become a Category 1 hurricane while it was in the area until the very end, as well, when it sort of touched southwest portion of Puerto Rico — that created so much devastation that we had a total power outage. And then still today, nearly two weeks later, there are hundreds of thousands of people without power.

David Roberts

Billions of dollars of FEMA money was set aside for Puerto Rico, after Maria. Yet reportedly only a tiny fraction, as little as 30 or $40 million, of that money has been spent on the ground. What happened to it? Who controls access to that money, and how can it be dispersed faster?

Ruth Santiago

Yeah, everyone wonders what is happening with the FEMA funds, that have been allocated toward the electric system in Puerto Rico, which have been calculated, when you include certain HUD funds, as well, could be as much as $16 billion. Yeah, there's actually disparate information about the numbers. Some say as little as 30 million, as you indicate, and others say 180 some million dollars. Unfortunately, there's not much transparency either from FEMA, or the government of Puerto Rico, or much less LUMA. In the LUMA contract, it pretty much hands over control of the funds to LUMA Energy. And as mentioned, so LUMA just wants to rebuild the same, old centralized grid, and that would, basically, go to profit, for the profit of LUMA's affiliates and related companies.

David Roberts

What's the state of rooftop solar and microgrids in Puerto Rico? Are they making any progress? Who can afford them? And most of all, how could they be encouraged to spread more quickly?

Ruth Santiago

I think it's important to indicate that the Department of Energy — US Department of Energy, through the National Renewable Energy Lab — has indicated that Puerto Rico has 20,000 megawatts worth of rooftop solar potential, and energy demand, here, is about 3,000. So coupling that rooftop solar with batteries means that we have about six times the rooftop solar potential. But it's something that LUMA is totally unwilling to do. It's not with the, sort of, control that it has over these disaster recovery funds. When LUMA came in, they just scrapped the plan that PREPA had submitted to the Puerto Rico Energy Bureau and submitted their own plan, which is, as I said, rebuilding the same centralized grid that runs from south to north and is in the path of the hurricane.

So unfortunately, as I mentioned, people who can't afford rooftops solar are just often without power. So it's a life-threatening situation.

David Roberts

What sorts of reforms would help strengthen Puerto Rico's grid at this point? What should be done?

Ruth Santiago

In terms of the reforms that will help strengthen Puerto Rico's electric system in the energy public policy law that's in effect, Puerto Rico is supposed to reach ... actually by the end of this year, there's another law that requires 20% renewable energy generation and by 2025, 40%. 2040, it's supposed to be 60%, and to reach the 100% renewable energy goal by 2050 by law here. And that is not happening. The government is not on its way to doing that. And LUMA Energy, certainly, is not helping the situation.

And so I think that because the LUMA Energy contract, there's a term that expires on November 30, there's a very strong feeling, locally, that the contract should not be renewed. It should not be continued. The 15 year term contract should not start because LUMA has shown itself to not want to implement the renewable energy standards or portfolio that's required by law. Even with the utility scale projects, which require, admittedly, a lot of interconnection costs, LUMA has resisted doing that kind of investment or allowing for that kind of integration of those projects.

In fact, I remember at a hearing, a representative of LUMA, called Lee Wood, said that the disaster recovery funds could not be used for rooftop solar, which is absolutely false. It's not true at all. FEMA has said that the disaster recovery funds can be used for distributed renewables. Congress has said that that was their intention, to flexibilize the use of those disaster recovery funds just as long as the electric service is provided. So that means it can be used for distributed renewables. But LUMA is not helping in that sense. And I think one of the main reforms we need is to not renew that LUMA contract and require PREPA to comply with the renewable portfolio standard that's in place, through distributed renewables. And there's a civil society generalized clamor for that kind of reform. People are increasingly aware, that the experience with Hurricane Fiona was, that people who had rooftop solar largely were able to function even on the cloudy days.

I can talk from my personal experience, and others that I know. We had rooftop solar even on cloudy days, being very cautious, but being able to keep literally the lights on and, also, the refrigerator on, which is very important. So, yeah, the reforms include, basically, earmarking the disaster recovery funds that are already available from Hurricane Maria, for rooftop solar, and storage, and other alternatives to the centralized electric system that we have here in Puerto Rico.

David Roberts

Finally, what can Americans outside of Puerto Rico do to help draw attention to Puerto Rico's problems and help encourage solutions?

Ruth Santiago

What can people in the States do? Certainly, as you know, people in the States can draw attention to the problems with the electric system here, and the fact that, within five years, a Category 1 hurricane, like Fiona, knocked out the whole grid again. Draw attention to that, and ask whether that's what the federal funds should be used for, to rebuild that same system, and hand over all of these funds to LUMA Energy, to rebuild a centralized system that's so vulnerable to now, to just tropical storms.

I don't recall a tropical storm having knocked out 100% of power, or really, a substantial amount of power, before. This is unprecedented, what happened here. And I think people should be aware of that, and people in the States should understand what the implications are for the federal budget. Congress, back in 2005, said that the insular areas, like, including Puerto Rico, are seeing this repeated pattern of destruction by storms or hurricanes, and reconstruction, and then destruction again. And so people should be very aware that what's happening with the electric system here and the use of the federal disaster funds, will have an impact on federal budgets, and that we should find a more viable solution.

Study upon study, the local organization here called Cambio and an Institute for Energy, Economics and Financial Analysis that have shown the viability. Prior to that, the faculty, certain faculty at the University of Puerto Rico, the Mayagüez Campus, also talked about and studied the viability of distributed renewables. We have sprawling, sprawling rooftops here. And NREL, as I mentioned, part of the DOE, and the US. Department of Energy, recently, said, we have so much rooftop solar potential. It is viable to do that, rather than rebuild and have the grid destroyed again. And so we need people in the States to take that message to their elected leaders, to the decision makers, to the Biden administration, and to Congress members, to legislate and allocate in a way, with the funds that have already been set aside, in a way that does not require constant, historic amounts of monies to be invested in a grid that's going to be destroyed again, in a few years.

Now with this climate crisis, that we're experiencing, and as we see, a lot of coastal areas in the US are experiencing the same problem with these very intense hurricanes. Even on the West Coast, we're seeing that transmission grids are impacted by wildfires. And so centralized systems and fossil based systems are very much a thing of the 20th Century. We need to move into the 21st century, and that message that applies to Puerto Rico, to the Gulf Coast, to the Eastern Seaboard, that are vulnerable to hurricanes and damage, to the centralized transmission and distribution systems. Groups that are organized in the States, on these issues, should think seriously about advocating for decentralized systems, not just decarbonized systems, but decentralized systems that, to the extent possible, will allow for energy generation with renewables in a very localized way, such as rooftop solar storage. And, of course, there are many other options in the States that can be implemented.

If people would be able to look at the We Want Sun webpage, and endorse that, and make it known within their organizations that they're working in that this is a viable option for Puerto Rico and beyond.

David Roberts

Thank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber. That's Volts.wtf. Yes, that's Volts.wtf, so that I can continue doing this work. Thank you so much, and I'll see you next time.