By Emma Tucker, CNN
Less than two weeks after Hurricane Fiona made landfall on Puerto Rico, triggering an islandwide blackout for 1.5 million customers, power has been restored to 84% of residents, officials said.
Fiona hit the US territory as a Category 1 storm September 18, dropping record rainfall, unleashing mudslides, flooding neighborhoods and leaving most of the island without power or water. The island’s health department said at least 25 deaths may be linked to the storm.
Fiona made landfall almost exactly five years after 2017’s Category 4 Hurricane Maria left many residents without electricity for months and delivered a blow from which the island has never fully recovered.
Power outages on the island have been a long-running source of frustration for Puerto Ricans who rely on a fragile and poorly-maintained power grid, with modernization efforts slow to materialize over several decades, first by a publicly-owned entity and today by a private caretaker.
‘The whole grid falls apart’
The highly centralized grid has one major power line which, if compromised, shatters the entire system. The grid continues to suffer from a history of underinvestment and an outdated energy infrastructure, making it vulnerable to natural disasters and prone to extensive outages.
“Because the whole system hasn’t been properly cared for or modernized, we are in a position where anytime a storm hits or there is some sort of natural disaster, the whole grid falls apart,” said López Varona of the Center for Popular Democracy, an advocacy group organizing recovery efforts for Puerto Rico.
LUMA Energy, the Canadian-American power company responsible for power distribution and transmission on the island, took over management of the grid in 2021 from the government-owned Puerto Rico Electric Power Authority, known as PREPA, which has relied on fossil fuels to power the system.
LUMA, which landed a 15-year operation and maintenance deal, has faced growing criticism from activists and residents for steep billing costs and widespread blackouts, as well as calls for the government to terminate its contract.
A history of challenges
PREPA, which is still in charge of power generation on the island, was created in 1941 as the island’s sole electric utility.
It filed for bankruptcy in 2017 under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act of 2016, which created a legal framework for restructuring the US territory’s $74 billion debt. In September, mediation talks to restructure the PREPA’s $9 billion debt to bondholders ended without a deal.
Gov. Pedro Pierluisi gave his first public criticism of LUMA in August, saying he is “not satisfied” with its performance and said it must make changes to “significantly improve” its services.
The House of Representatives Committee on Energy and Commerce wrote to LUMA on September 27 expressing “deep concerns” over the power outages following Fiona. It said the company had not prepared the island’s energy infrastructure to withstand a Category 1 hurricane.
“Ongoing outages and the complete disruption of power following Hurricane Fiona amplify concerns that LUMA has failed to adequately develop and maintain crucial electrical infrastructure in Puerto Rico despite its lucrative 15-year contract,” three committee leaders wrote to LUMA Energy President and CEO Wayne Stensby.
In addition to LUMA’s service being “riddled with chronic power outages and disruptions,” the letter states, Puerto Ricans spend 8% of their income on electricity, compared to just 2.4% spent by the average citizen in mainland United States.
FEMA funds billions to modernize grid
In September 2020, the US Federal Emergency Management Agency (FEMA) dedicated more than $9.4 billion in funding for projects to transform the grid and more funds have been added since, bringing the total to roughly $12 billion, which represents the largest allocation of funds in FEMA’s history.
FEMA approved an additional $107.3 million in funding earlier this year to modernize the grid in the aftermath of Maria, which includes 15 major projects to repair and restore the system.
Dr. Shay Bahramirad, senior vice president of Engineering, Asset Management and Capital Programs for LUMA who is serving as the incident command for Fiona’s impact, told CNN “significant progress” has been made through the projects funded by FEMA.
LUMA has made improvements during the first year of its contract, such as improved safety for employees, 30% fewer outages than PREPA, replacing more than 3,000 broken utility poles and connecting more than 25,000 customers to rooftop solar power energy, according to a progress update released in June.
Bahramirad said the poor design of the system, along with a lack of maintenance and management, has created “cascaded outages.”
“There is a sense of urgency. I completely understand the frustration of our customers. However it is equally important to do this right,” Bahramirad said, adding it is critical the system “is getting built based on data science and sound engineering per industry standards.”
Grid suffers long history of mismanagement
Hurricane Maria led to an “overall vision for the need of reforming the energy system,” said Alejandro Figueroa, director of infrastructure for the Financial Oversight and Management Board for Puerto Rico, which was established under the oversight legislation in 2016. He previously served as general counsel for the Puerto Rico Energy Bureau, the island’s energy regulator.
The board was created to restructure PREPA’s debt, putting it on a path of fiscal stability and overseeing efforts to make the system more resilient.
Figuroa pointed to two key causes of the system’s problems: A revolving door of management of the publicly-owned entity, which he said “mimicked political cycles,” as new governors would bring in new managers, and PREPA’s rates, which remained unchanged for nearly two decades.
He explained as inflation and recessions raised the cost of materials and labor, and the population of the island dwindled, the company could not keep up with maintenance, office operations or its debt, and the system was ripe for disaster when Maria struck.
Under the restructuring, power distribution, transmission and maintenance were shifted to LUMA, a private operator, a move many activists have criticized, arguing it has only worsened the system’s reliability.
“Why are there so many blackouts? Mostly, it’s because of lack of investment in the system,” Figuroa said. “You have frequent equipment breakdowns, you have a maintenance program that reacts to an outage and tries to fix it as quickly as possible instead of proactively identifying a weak point in the system and properly fixing it to reduce the chance of an outage over time.”
Additionally, Figuroa said, the lack of investment by PREPA to maintain its distribution and transmission lines has made the system especially vulnerable to clashing with trees and other aspects of the tropical island’s ecosystem.
“If you have a wooden pole instead of an aluminum pole, when a hurricane comes, the pole is more likely to fall and therefore causes longer outages than if you had strengthened the system,” he said.
Since LUMA took control in 2021, outages happen less often than under PREPA, but are longer by an average of 30 minutes, Figuroa pointed out, but with a caveat: The island’s energy regulator concluded PREPA grossly underreported its numbers for 2019 and 2020.
“A lot of people are frustrated because they perceive the service being delivered today has not improved, or in some cases they perceive that it’s getting worse. But a lot of that has to do with the amount of investment and work that needs to be put into fixing and improving one of the United States’ largest and most complex energy systems in existence,” Figuroa said.
The process will “unavoidably take time,” he added, for customers to feel a meaningful improvement in the quality of services LUMA provides.
Activists call for solar power transition
Varona of the Center for Popular Democracy said the organization believes LUMA’s contract should be canceled, adding LUMA “has not been an effective administrator of the grid.”
The advocacy group has criticized the Financial Oversight and Management Board for using “its power to impose devastating austerity measures and negotiate unsustainable debt restructuring plans that enrich Wall Street and hurt Puerto Ricans,” said a report released last year.
There must be real investments in not only modernizing the grid, but decentralizing and replacing it with a renewable energy system, Varona added, echoing calls by activists and many residents to use FEMA’s funds for a transition to solar power.
The Queremos Sol coalition has proposed a plan to be adopted by Puerto Rico’s government to transform the grid with the goal of achieving 50% renewable energy generation by 2035 and 100% by 2050.
The proposal provides a pathway to a self-sufficient system relying on renewable resources, mainly solar, “by using clean renewable technologies and inclusive structures and processes meant to eliminate partisan political interference and systemic corruption,” it states.
“We need to make sure that the dollars that were allocated to rebuild the electrical grid move faster so that we can rebuild the grid,” Varona said. “And hopefully when we do, we rebuild it through a decentralized system that relies more on the biggest source of power that Puerto Rico has: 365 days of sun.”
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