Puerto Rico’s economic recession started in 2006. Since then, the Puerto Rican government’s economic activity index has plummeted, its public debt has dramatically increased, and many Puerto Ricans have moved to the U.S. mainland. What impact have these trends had on Puerto Rico’s production and consumption of electricity. Can these measures help us explain the island’s economic crisis?
For this post, I accessed data collected by the Government Development Bank for Puerto Rico on the total consumption of electricity by the island’s residential, commercial and industrial sectors. Rather than using monthly totals, I reorganized the dataset into quarters.
Let’s look at the total residential consumption of electricity. On the whole, the residents’ consumption of electricity from the first quarter of 2009 to the last quarter of 2017 has declined slightly. The graph below includes a trendline that allows us to measure the overall decrease in the consumption of electricity.
Our second graph is similar to the first but it looks at the commercial sector’s consumption of electricity in the same time period. A trendline is also included for the same purposes and it demonstrates a modest reduction in the total amount of electricity consumed.
The last graph follows the same format, but it is worth pointing out that the industrial sector’s consumption of electricity has decreased by a significant amount. And it is this graph that really explains Puerto Rico’s economic predicament.
What conclusions can we draw from these graphs? These trends suggest that the economic recession has impacted the industrial sector at a higher rate than the residential or commercial sectors. The fact that industries in Puerto Rico are consuming less electricity suggests that many may have relocated to new jurisdictions, gone out of business, or lower their output. In addition, lower levels of electricity consumption in the industrial sector may explain lower levels of electricity consumption in the residential and commercial sectors too. Indeed, a weaker industrial sector may have led to higher unemployment rates, lower demand for commercial services, and to higher emigration rates among middle class Puerto Ricans to the U.S. mainland.