Rebuilding Puerto Rico’s Electricity System Democratically (Episode 70)

Welcome Marcel.

Now, there are other reasons why it took much longer than other places. For example, then before Hurricane Maria, PREPA was already diminished by austerity measures. So there were less things in stock to replace poles and materials and also there was less personnel working with PREPA compared to 20 years ago when George’s impact of. Another important thing was Maria was very strong. When it got to Florida it was not as strong as when it hit Puerto Rico and just looking at the average wind speed in the impact lab. Estimated throughout the whole Puerto Rico land area, only five storms were more intense than Maria and they were all in the Pacific Ocean.

That is from the 1950s until now. So when we look at that is very strong hurricane. Also the devastation due to tree falling and landslides. There were thousands of landslides across Puerto Rico but particularly in the center of the island where recovery at first took longer to get and restoration took a month, almost a year. In addition to that we had a slow start. Government didn’t call for aid for more than a month. It took six weeks for the government to call on aid assistance and that hampered the recovery efforts in the beginning.

The official version is that the private companies could jump in without matching or putting some money up front from the Puerto Rico government side but there might be other issues involved. For example the idea to make Prepa private and I think everybody was aware that whoever restored your power is going to have a great impact on your mentality on your perception of who helped you recover power. Is it a public power utility in the U.S. or is it a private utility. And I think that played a role in that decision.

But I’m speculating about that. But it’s possible. The other thing is that we are a remote island so the super crews could not drive from other states to help Puerto Rico so they had to come by boat and that takes longer and it’s more expensive. So that’s another thing that limited the quick responses sometimes that the states get. And finally the rough terrain, the mountain areas are really hard to get because the Prepa workers were less so the people coming from places like Florida, they don’t have experience with this mountain terrain that you can find and that is something that also played a major role in what I call is the longest blackout ever in the world.

I had never heard of a power outage that lasted 329 days.

But you’ve created a pretty interesting document looking at the problem by focusing on the hours of lost electricity. So you just mentioned it was the longest blackout every. Tell me a little bit more about what you’ve been trying to track in terms of how this blackout impacted and then how that’s been allowing you to focus on approaching this solving this problem in a different way.

But also you can compare that with maybe a smaller like amount of people or customers losing power but for extended periods of time. So when we look at the customer’s hours of lost electricity service which I call choles, to make it short. Hurricane Maria was already above 1 million 200 choles on October 2018. And by April, the Rudding Group reported that it was already the second largest blackout in the world. Only Typhoon Hayan in the Philippines had more than 6000 choles but to keep in mind that the Philippines has a population of 100 million people as compared to the less than 4 million people in Puerto Rico.

So then I started looking at how this can be used to make better decisions and also now how to best distribute the recovery funds that we hope at some point get to the people that need it the most. And that brings some interesting numbers. For example, I divided the groups of customers in Puerto Rico in three and the last 200,000 customers that represented 14% of the total of the customer of Prepa contributed about a third of the total choles which are about 3,000.

In my estimate I have a conservative estimate of 3,000 but other estimates but it more like 3,000 400 million choles. I have about 3,000 million and so it is a lot. I estimated 928,000 million choles for only those 200,000 customers that spent more than five months without electricity. Now, when we think of what should we do and how much it will cost to fix that vulnerability we should keep in mind that when Hurricane George the estimated total number of customer’s hours of lost electricity services about 1,000 million. So it’s very close for the whole Hurricane George that devastated Puerto Rico in 1998 is very close to the last 200,000 families that the last one that recovered power after Hurricane Maria.

And to put that in context with other events. With Sandy there were 775 million choles. With Jugo in 1989 that’s the first one I remember. Puerto Rico it was about 700 million choles and with Katrina for example it was 681 million choles. So when we put that in context I think the numbers are really mind blowing and we need to really think how to best invest and cover the vulnerability of these last 200,000 families but also all Puerto Rico.

And also in the southeast of Puerto Rico. For example in Yoacoa where the hurricane came in. And I was thinking about that when I was thinking about that when I look at the percentage of restoration throughout the recovery process, the restoration process and the southeastern coast of Puerto Rico, which was beautiful. There is a nice road to go there because you can drive at a high altitude. Very close to the ocean, which also makes it difficult because that means that there is the corner of the island that receives very strong winds or stronger than the rest of the island and at the same time they are mainly a mountain rural areas.

So you have those factors combined with having mountain areas with stronger winds than the rest of the island. And based on that what I’d like to see prioritize these family because there are many plans of 100% renewable in 2050 but I want to focus on more on what we can do in one to two years when we cover these vulnerability with technology that already exist.

This is important because it could give us a window into the future what would be needed in other places in the United States afterward. We have two specific issues to address that are particular of Puerto Rico and that is the vulnerability to hurricanes and also the high cost of electricity from the grid. Now, there are projections. For example, HOMER Energy and Rocky Mountain Institute did a work on grid defection, the economics of grid defection and they predicted that in a couple of decades, there are many cities that are going to be challenged or the utility model is going to be challenged in those cities by decreasing price of solar with storage.

Now, that already happened in Hawaii and is happening now in Puerto Rico. If we do things right in Puerto Rico, it could serve as a model for other cities to follow, especially when solar with batteries become a real challenge to the grid.

We don’t need to make it all cutthroat competition. We should try to collaborate and make the transition to what makes more sense for the customers and for the families.

And unfortunately largely rebuilt in the same structure that it was before as you mentioned, the centralized system that leaves it fairly vulnerable to hurricanes. What are the funds that are still expected for Puerto Rico and when are they expected to come that would allow investment in a new version of the grid that would be more resilient and reliable?

Now, there are an additional … It’s almost two billion, 1.9 billion on … That is also CDBG funds, I should say. This is CDBG funds that comes from HUD. There is a future amendment to the action plan. We already have two amendments and those $436 million are in that.

So the next 1.9 billion is in a future amendment and that 1.9 billion is supposed to go for the electric grid but not for PREPA. So, that is less defined. It’s just they were just mentioned that. So I’m thinking it could be energy co-ops or also private organizations.

I hope that a lot of that money is used to put power on the rooftops of houses and small business because when we’re talking about $2 billion that is something you can cover 200,000 houses with small systems and some business as well.

Beyond that, there are also maybe about 20 billion from FEMA that is expected to go to PREPA. That one is more uncertain because I haven’t seen any action plan for that, so I’m not aware of what’s gonna be done with those money.

There are a lot of talking about mini grids, which I don’t think is the best investment because it doesn’t address the vulnerability of the distribution system at the lowest level. Also, natural gas infrastructure which, again, I think those things should be considered once you cover the vulnerability at the household level, the business that need it and then also at community level. And then you consider other options.

That’s what I read in the different plans. But there’s uncertainty of how much is really gonna come and also when are they gonna come. I’m worried that we’re not that many months away from the peak of the 2019 hurricane season and I worry about those 200,000 families that need to be taken care of some way or the other.

Thank you so much for listening to this episode of Building Local Power with Marcel Castro Sitiriche, Co-Director of CoHemis at the University of Puerto Rico Mayaguez. Hey, do you think you’d be a great guest on Building Local Power? Dying to tell Chris Mitchell what he could do better? Want to just share some love? Email us at [email protected].

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Please take a minute and go to ilsr.org/donate. Any amount is welcomed and sincerely appreciated. That’s ilsr.org/donate. We also value your reviews on Stitcher, iTunes or wherever you get your podcasts. Thank you so much. Now lets hear about the impact of Puerto Rico’s colonial past on its present efforts to build an energy system for everyone.

So I wanna take a minute to just give folks a little bit of background about why this is such a challenge. Not Justin terms of the structure of the grid and the geography of the country that make it difficult to build a resilient energy system.

But also that, and you alluded to this, you mentioned this a little bit earlier about PREPA being under an austerity plan that has many fewer employees and resources than it had, for example, 20 years ago with Hurricane Georges.

And I think one thing I want to make sure listeners understand is that part of the utilities problems come from the island’s colonial past. So something I talked about briefly at the Black Start Conference and others have also discussed as well.

So, for example, the island’s last federally appointed governor set a president of giving free electricity to cities and to city owned properties. Something that costs each PREPA customer over $100 per year, money that could otherwise be invested in infrastructure or in micro grids or solar.

So it sound that in some ways that PREPA has also … You not only have this some sort of legacy decisions that are the result of Puerto Rico having this unique status as a US territory but not a state and decisions that are being made.

You have the federal PROMESA law that we have a financial oversight board that is even though it doesn’t have any representatives from Puerto Rico it makes decisions about the financial health of the island.

So, we have that background. I’m just curious, you mentioned PREPA’s going to hopefully get some resources from FEMA going forward. There’s also, as you mentioned, I think a lot of home that there’ll be investments made that are not controlled by PREPA.

What do you think PREPA could do if it was going to spend that money well to support a cleaner and more affordable energy system?

That I would say represent the problems of our colonial present because we still-

When we say PREPA should do this or PREPA should do that are we talking about the worker of PREPA, are we talking about those that are demonstrators of PREPA? Or we’re talking about the governments that appoints the governing board and always change laws to take control of that government board of PREPA and the high level executive that the government appoints?

Or are we talking about the people that should in theory control the public power company that is PREPA? That is not an easy issue to solve. But, the main problem has been that the way PREPA has been controlled is in favor of the political party that is in power.

For example, I remember talking to our colleagues here at the university and the power area, why the rate has not been increased? Something like maybe 20 years ago three cents per kilowatt hour and the only reason is for political reasons.

If you increase the rates, you lose the election so you don’t increase the rate. Actually you … There are instances even when the rate was reduced with a loan one month before the election in, I think that was 2012.

So that has been a problem with PREPA because if those that made decisions on PREPA are thinking of winning the election then you are not gonna revise the incentive, for example, for municipalities because the leaders in the municipal governments do have a political power and can change the outcome of the election.

And we might do only what seems best in the short term in four periods and not what is needed in the long term. This is not exclusive of PREPA. About more than a year ago PREPA went with the government and with the fiscal oversight and management board to Judge Taylor Swain to request an approval for a loan of $1 billion.

It was not approved but they did approve 300 million because they were gonna run out of fuel. They didn’t have credit to do it. Now this is monopoly and question how can you make a monopoly bankrupt. But the same thing could be said of the board when they go to ask for loan instead of raising the price.

They did not want to raise the cost per kilowatt hour because, and I’m assuming this, it would create a backlash for the privatization process that they wanted to push. Also didn’t act as a business that has a monopoly and they wouldn’t get a loan for this.

The main problem with PREPA management has been looking at short term four year periods. And the only problem is that the same people that create this problem, which is the decision maker now they want to privatize PREPA. So instead of solving the issue that they created they privatize without giving any reason to or study to believe that the rates are gonna come down.

So we are promised that the rates are gonna come down and that’s what politicians have been doing, not raising the rates that should have come up 20 years ago and would not a 9 billion debt. But, it’s now what should be done now? What can PREPA do?

PREPA need to do some things that might not be very popular like increasing the cost per kilowatt hour, but it should be done in a sensible way. What are we getting for that? Are we getting a more resilient grid or this increase or are we not getting an increase because we’re gonna get funds in any other way to improve the system?

Can PREPA provide the solar systems that people need in the mountain? Is PREPA the best organization to provide this kind of sort of resources or should it be done by another entity? The ultimate thing is what is the best thing for the people.

I would not say that I am defending PREPA. What we need to focus is what is the best for the people, not the best for PREPA or PREPA workers but also what’s not best for the private interests that are looking to private PREPA.

This is similar to the university, for example. Some people say we need to reduce the government spending or government investment in the university to tackle the privatization in the university. But, I don’t see that, that has been a problem in other places.

In other places the governor changes from one political party to another. As far as I know, the president of the university do not change. But that does happen here.

So we need to find a way to tackle the issues of political takeover of public institutions without the need to privatize them because then too many things are get involved. We need to privatize. Let’s privatize but let’s do it for the right reasons and the studies that prove that is the best for the people.

I had a couple thoughts here. One is just sort of a comment which is interesting to hear so much focus on the rates, the electric rates in Puerto Rico. And yet, in a lot of other places in the United States the discussion around energy cost is around bills and a recognition that customers pay a bill, a total bill, they don’t pay a rate per se.

And it’s sort of hard to split that apart. But, a good example is that electric rates.

For example in the Northeastern United States or in Minnesota for example might be higher than in the Southeastern United States like Georgia or Florida but our average electric bills are actually quite a bit lower and that’s because there are many more efficiency measures and investments that are made by utilities. Usually pushed by state policy in those states and I think that’s an interesting potential approach here for Prepa and for the future of … to the degree to which people continue to be served by a single utility, a focus on, okay, well how do we help lower the amount that people pay in total even if we have to raise rates in order to fully fund the utility company.

So there is that. I also wanted to talk about as well though, so there have been some kind of policy reform efforts and there are two that I’m interested in getting your thoughts on. One is this energy reform law 1121 that some folks are called the Puerto Rican Green New Deal. It includes a provision for 100% renewable energy and I think you alluded to this earlier but that it’s out several decades in the future.

So I’m curious, number one about how that law might help now in the short term with this issues of resiliency and clean energy and then the second one is that in the last five years the islands’ government has established an energy bureau charged with overseeing Prepa and it seems in this conversation about making sure the utilities accountable, that is perhaps the most successful thing already that has already done things to help hold the utility accountable and most recently released some ruled for micro grids, which are small grids that can be run by a community that can either operate independently or they can operate in connection with the larger grid and it seems to me that both this new law and these regulations from the energy bureau that is overseeing the utility could offer some near term opportunities.

And I’m curious what your perspective is on this.

And that is something that should be part of the energy public policy. Also, this bill leaves the door open for a large investment in natural gas infrastructure, let’s say a transition to 200% solar and that is also worrisome because we might not do the best investments if we go too much into building new gas infrastructure which we’re really trying to go 100% solar in a few decades where this infrastructure might last another 50-60 years. And also while there have been more talk about utility scale, solar and utility scale storage.

I don’t see enough prioritization of rooftop solar. That also gets reflected in the IRP by Prepa that includes a good amount of utility solar systems but not the rooftop solar and again this is where we need to start. We need to start with the rooftops. I call it the bottom up grid approach. We need to build a new power grid from the bottom starting in the rooftops of the houses and business and industry and then look at what we can do at community level, for example for houses maybe there’s some community centers that should be empowered with this kind of systems on a community level so we could build micro grids that reinforce what already exists in maybe many houses.

But maybe not all of them can have a solar system for infrastructure problems or shading or things like that and a micro grid can help with that. And if you go up the bottom up grid maybe by the time you get to mini grids if you already have a strong system then the mini grids might not make economic sense. The kind of investment needed if you already have so many rooftop systems and also micro grids. One problem with this approach is the big companies that install big systems. Major projects like one billion and a half generator.

If they want to do make money with solar rooftops then you need to have hundreds of thousands of small projects. And that’s not as good for this kind of big companies. However, it is good for small companies in Puerto Rico that do this kind of installations. So I see it as a win-win. But it could create a problem with those interests. About the micro grids in development in the island and there is a new rules and now I believe that the interconnection rules there is a draft released last month. So it’s under review. So that’s moving forward and I think that’s great.

These are the steps in the right direction and we need to enable communities to be able to establish micro grids and find different ways to establish micro grids. However, I think that’s not the place to start. We’re going to start with the rooftops that exist now and that can be done now without further regulations or rules and we need to find a way that as we add rooftop solar in thousands, in hundreds of thousands of houses that those resources could be used when we build the micro grid at that level.

And perhaps one of the things that I want to research the next couple of years is how to use the solar rooftops with batteries as a precursor of the micro grid and not make it a competition, well this community have solar rooftop and this one has micro grids. No, how can we massively deploy solar rooftop systems with batteries and then connect them in the micro grid way to make the system more robust because at the end what we want to do is keep the lights on and from then on we are talking about getting to the future of a consumer trans-active energy, peer-to-peer energy that could be tested in Puerto Rico if we had this massive level of distributed level of capacity for generation or for storage.

So again, this could be an opportunity to cover a vulnerability that is very much needed in the areas of Puerto Rico to leap frog and go to the next grid or the next energy system that we should have in other places. But here because of the abundancy of solar, the high cost of power from the grid and the vulnerability to hurricanes could help do the transition faster. And also considering that we have an aging infrastructure, the fleet generation fleet of Prepa is about 30 years older than in the U.S.

So something I say is that it’s like we’re driving a Toyota Corolla from the 1980s. This is our fleet but if we are going to go through a transition that is going to make obsolete all the roads and now all the cars are going to fly. For us to stop driving the little car from the 80s, we’re not going to be losing as much as if we have a brand new Chevy that which might be the new natural gas infrastructure.

So I think we are in a good position because we have aging infrastructure to make the transition faster and more direct to renewables.

Thank you so much for sharing your vision of how Puerto Rico can recover from Maria and invest in the local communities and rooftop solar. Really appreciate you taking the time.

We’re talking about the benefit of people. And I think that’s something that we can agree on and that would have focus on the people aspect of energy. 200,000 families that need action in Congress and the government and so we can unite with that and perhaps if we unite for those 200,000 families then we can unite for many other things that … and that would be great. That is my vision to working for a better future.

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