Written by Laila Kearney
NEW YORK (Reuters) – Hurricane Fiona knocked out power across the entire Commonwealth of Puerto Rico starting Sunday, rekindling memories of Hurricane Maria, the deadly Category 4 storm that struck in 2017 and exposing the vulnerable nature of the island’s electrical grid.
Now, nearly all of Puerto Rico’s 3 million residents are in the dark again, and five years after Maria, it’s raising renewed questions about the state of the network.
Who Runs Puerto Rico’s Electricity Grid?
The state-run Puerto Rico Electric Power Authority (PREPA) owned and operated the island’s power grid when Maria struck. PREPA has long been criticized for insufficient investment in its power system and failure to create backups to conserve power during disasters.
Before Maria imploded, the debt-laden government and PREPA were mired in bankruptcy, and a federally appointed supervisory board was created to manage the island’s finances.
In June 2021, Puerto Rico privatizes the grid by engaging LUMA Energy to operate the system, although PREPA still owns the infrastructure. LUMA is a joint venture between units of Canadian energy company ATCO Ltd and a US energy contractor Quanta Services (NYSE:).
A study from the Institute for Energy Economics and Financial Analysis (IEEFA) found that service recovery times and voltage fluctuations increased after privatization due largely to a shortage of experienced workers. The island also suffered a blackout in April, knocking out power to a third of homes and businesses.
LUMA did not immediately respond to a request for comment.
Why is Grid still struggling?
Hurricane Maria destroyed the island’s electrical system when it hit in late September 2017, primarily by hitting transmission lines. Since then, restoration work has focused on replacing those lines, while most other aspects of the grid have not been modernized, said Tom Sanzillo of IEEFA, who researches Puerto Rico’s power system.
It took several years under the Trump administration for the Federal Emergency Management Agency (FEMA) to approve $9.6 billion in September 2020 to rebuild Puerto Rico’s electrical grid. About $3.4 billion more in federal funding has since been added.
Analysts say bureaucratic stumbles, political disagreements and issues of network privatization have slowed progress. Disagreements over how the money is spent have also hampered improvements.
“Many companies, whether for profits or NGOs, want a slice of the $12 billion in federal funds to rebuild the network,” said Sergio Markswash, director of policy at the Puerto Rican-based Center for New Thought and Economy (CNE).
Where does Puerto Rico’s power generation come from?
Natural gas power plants account for 44% of electricity, while 37% come from petroleum as diesel fuel, 17% from coal and about 3% from renewable energy, according to US Energy Information Administration data.
Under Puerto Rico’s Energy Public Policy Act, passed in 2019, the Commonwealth is required to get 40% of its electricity from renewable sources by 2025, 60% by 2040 and 100% by 2050, according to the Energy Information Administration. However, Markswat said the modernization of the grid has also been delayed due to political disagreements over the use of renewable energy sources versus adding more.
Puerto Rico has to import all of its oil, coal, and natural gas because it doesn’t produce any fossil fuels. It already has solar and wind power generation that has contributed to the generation of renewable energy sources. Coal power generation is scheduled to be phased out by 2028.
In early 2020, two of the island’s largest power plants were damaged in a 6.4-magnitude earthquake. These plants relied more on natural gas, causing Puerto Rico to shift its power mix to more petroleum, according to the Energy Information Administration.