Outages Prompt Puerto Rico to Privatize Power Generation

Image courtesy of Lorie Shaull under Attribution 2.0 Generic License, resized to 700 x 391 pixels.

Thanks to a crumbling grid, Puerto Rico recently announced that it will be working to privatize power generation across the island.  I’m sure this is welcome news for the island’s residents given the allegations of widespread corruption and inefficiency.

How and When Puerto Rico Plans to Privatize Power Generation

Simply put, the details are still being worked out.  In fact, as of the time of this writing, there has been no public announcement on which company will be taking over the grid.  That said, despite opposition in some circles, it is believed that a deal is in place, but it cannot be shared publicly yet in accordance with local laws.

It is unfortunate that it has come to this, but the island’s grid is poorly run and has not been able to recover in a reasonable timeframe after hurricanes and similar events.  In fact, the primary reason that officials want to privatize power generation across the island is to stabilize the grid and reduce the number of outages.

Puerto Rico government officials are trying to fight a contract extension that was recently awarded to Luma, a Canadian company that operates Puerto Rico’s T&D system.  Luma has received an innumerable number of complaints due to poor reliability and slow outage recovery.  It is unclear how and when Luma will be replaced as part of the privatization effort.

Overall, I think this move is long overdue.  After Hurricane Maria hammered the island in 2017, some residents were left without power for a year, which seems nearly impossible in this day and age.  Part of this is attributable to a blatant lack of investment over the decades to maintain the equipment in good working order, but much of it is due to the shortcomings of the grid operators in recent years.

In the final analysis, the decision to privatize power generation in Puerto Rico is a no-brainer.