The Puerto Rican government currently faces two crises. One caused by Hurricanes Irma’s and Maria’s destruction of the island’s infrastructure. The other is a credibility crisis caused by the government’s incapacity to address Puerto Rico’s post-Maria challenges and worsened by Governor Ricardo Rosselló’s unrealistic expectations about the recovery efforts.
The efforts to restore electricity to the island’s customers is a good example of these unrealistic expectations. On October 14, 2017, Rosselló promised that the Puerto Rico Electric Power Authority (PREPA) would reestablish electricity to 95% of customers before December 15. During the news conference, he also ordered PREPA and the U.S. Army Corps of Engineers to meet a set of short-term goals, captured in the table below.
||Electricity Generation Goal
Difference Between Actual Generation & Stated Goal
The following graph help us see the pace of power restoration. The horizontal colored lines each represent one of the goals listed in the above table, while the blue trend line represents the percentage of electricity generated from September 21 to December 1, 2017.
The graph also illustrates some of the challenges the electrical system has faced in this time period. For example on November 15, PREPA met the goal of 50% electricity generation, but a problem with one of the high voltage transmission lines reduced the figure to 29%.
Why did Rosselló set in place these ambitious goals? After all, the U.S. Army Corps of Engineers (USACE), as I noted in a previous post, explained that these goals were unrealistic from the get go. One explanation is that Rosselló may have set these goals to encourage PREPA, private contractors and the USACE to work harder and faster. Another more cynical explanation is that “groupthink” has affected the governor’s decision-making process, forcing his advisors to conform with Rosselló’s understanding of the crisis and suppressing any form of dissension amongst his inner circle.
Regardless of the reasons, Rosselló’s decision to set these unrealistic expectations and PREPA’s and the USACE’s inability to meet these goals are starting to wear on Puerto Ricans’ patience. While we do not have any public opinion data, it seems that anger against Rosselló and his government is growing in the island. In Washington, D.C., more and more lawmakers are raising serious questions about the Puerto Rican government’s capacity to lead the island’s recovery efforts.
On November 17, 2017, Ricardo Ramos stepped down as the executive director of the Puerto Rico Electric Power Authority (PREPA). Governor Ricardo Rosselló quickly accepted his resignation and noted that controversies connected to Ramos’s decisions post-Maria had become a distraction. Once he appointed an interim replacement, Rosselló reemphasized that the goal is to restore electricity to 95% of PREPA’s customers by Christmas. Is this objective feasible? The U.S. Army Corps of Engineers, as noted in previous posts, has made it clear that they expect to restore power to most Puerto Ricans by February 2018.
In today’s graph, we chart the percentage of electricity generated by PREPA from September 5, 2017 – the day before Hurricane Irma skirted the island’s northeast coast – to November 17.
The data before September 29, 2017 was collected by the U.S. Department of Energy’s Office for Infrastructure Security and Energy Restoration. The rest has been made public in the Puerto Rican’s Government Portal – StatusPR. This is not to say that this portal’s information is accurate. For instance, on November 15 it reported that PREPA’s electricity production was at 50% but the information did not take into account a power outage that reduced production to around 20%, increasing to 37% by that night.
As of today, November 18, PREPA’s electricity generation is still under 50%. It is not clear how many Puerto Ricans actually have electricity at home, as PREPA and the Puerto Rican government claim that they can’t provide an accurate estimate. The U.S. Department of Energy on November 16 noted that 57 out of 78 municipalities “are partially energized or have energized facilities”.
Many Puerto Ricans, especially in the island’s interior, have had no power for over 70 days.
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.
For the last weeks, the U.S. and Puerto Rican media have reported about Tesla’s interest in transforming Puerto Rico’s electrical system, following the passing of Hurricane Maria. Earlier this week, El Hospital del Niño announced that Tesla installed a system of solar panels and batteries which will supply all of the hospital’s electricity needs. While Tesla notes that this is the first of many projects, it will not be easy to move Puerto Rico’s electrical system away from its dependence on fossil fuels to renewable sources of energy.
Using 2016 data from the U.S. Department of Energy, the chart notes that only 2% of Puerto Rico’s electricity is generated using renewable sources. Puerto Rico’s dependence on petroleum, natural gas, and coal are not only problematic from an environmental perspective, but reliance on these sources makes electricity more expensive.
To put Puerto Rico’s figures in perspective, let’s look at how Puerto Rico compares to the United States and its Caribbean neighbors.
The story is different in the most populous countries in the Caribbean Basin. The graph below shows that most of these economies are dependent on fossil fuels, especially petroleum-based products. Puerto Rico and the Dominican Republic are the most diversified in terms of energy sources. But, the graph also shows that Puerto Rico produces the smallest amount of electricity from renewable sources.
Does it make sense to rebuild Puerto Rico’s electrical system to pre-Maria standards? While Tesla and other companies may want to transform the island’s grid, at this moment the Federal Management Emergency Administration’s (FEMA) and the Puerto Rico Electric Power Authority’s (PREPA) goal is to reconstruct the old system.
This is a missed an opportunity and as Ramon Cruz and Judith Enck note in a recent op-ed, Congress could actually intervene, asking FEMA, which is financing the recovery efforts, to order PREPA and the Puerto Rican government to use federal funds to invest in new technologies that can increase the amount of electricity produced by renewable sources of energy. This will not only cut Puerto Rico’s dependence on fossil fuels, which have to be shipped to to the island, but it will help the island a more resilient grid that will lower electricity prices for the island’s residents.
According to the Puerto Rican government’s data, 35 days after Maria, only 25% of the island’s customers have electricity. Although Hurricane Maria destroyed Puerto Rico’s electrical grid, the government hopes to deliver electricity to 30% of its customers by the end of October. Ultimately, Governor Rossello wants to restore power to 95% of the island’s residents by December 15.
While it seems possible that the Puerto Rico Electric Power Authority and the U.S. Army Corps of Engineers (USACE) will meet the short-term goal, El Nuevo Dia – the island’s largest newspaper – recently reported that Lieutenant General Todd Semonite, the commanding general of the USACE, thinks that Governor Rossello’s assessment of the situation is overly optimistic. He explained that most of Puerto Rico’s customers will have their power restored in February of next year and he hopes that electricity will be fully restored before May.