Using Disaster to Build a New, (d)emocratic Energy Paradigm — Episode 78 of Local Energy Rules Podcast

John Farrell:

Can an island economy overcome hurricane devastation to seize the opportunity for energy, democracy and grid? Ingrid Vila is an engineer and director of Cambio Puerto Rico based nonprofit in a coalition called Queremos Sol — “We want sun.” Ingrid works with many other organizations on the island and off to prioritize community owned local renewable energy. Nearly two years after Hurricane Maria destroyed the island’s electrical grid, an influx of federal recovery dollars may provide the catalyst to rebuild the island’s economy by reimagining its grid. Starting with solar on rooftops and local energy storage. Ingrid and I discussed the enormous opportunity and the pitfalls. The island must avoid disease. It’s chance for energy democracy.

I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self reliance and this is Local Energy Rules. A podcast sharing powerful stories about local, renewable energy.

I’m very excited this week to be speaking with Ingrid Vila, an engineer and president of Cambio of Puerto Rico based nonprofit who I met with in March when I had the privilege to travel to Puerto Rico for the black start conference. As many folks know. Puerto Rico was hit by a major hurricane a couple of years ago, has been in the process of rebuilding their energy system. And I have just been fascinated with the way that folks on the island have been looking for the opportunities in this rebuilding project. So Ingrid, thank you so much for joining me and welcome to the podcast.

Ingrid Vila:

Oh no, thank you for the opportunity and it was a great pleasure meeting you in March.

John Farrell:

I would like to start with a little background. Um, you know, the intense focus on Puerto Rico is energy system comes out of a disaster, the strike by Hurricane Maria that knocked out power to the entire island back in September, 2017. Could you just give people a bit of an overview, like what are some of the reasons that the hurricane was so destructive to Puerto Rico’s energy system?

Ingrid Vila:

Well obviously you can’t underestimate the power of a category five hurricanes. So I mean, uh, just having that, uh, go through Puerto Rico, we knew it would have devastating effects nonetheless. Um, the vulnerability of our energy system, uh, what’s quite exposed after this hurricane, vis a vis uh, other areas within our, our infrastructure. And I think one of the main reasons and, and the ones that have come out after the fact, um, was the abandonment of required investment, for example, in the maintenance repair and even preening, uh, of workers within PREPA. Um, and that is due in great measure to political intervention and corruption, which unfortunately, um, have plague that corporation, the Puerto Rico Electric Power Authority (PREPA), uh, for many decades. Um, so we have an authority in a corporation or utility, uh, with a decision making process, but it’s driven by partisan politics instead of commitment to energy planning. Um, in the public interest we have, for example, political appointments, um, in technical and operational positions that did not regard necessarily the qualifications of those individuals.

Also, um, as many of you probably also have, have come to learn, Puerto Rico has been in economic depression since 2006. Um, and instead of, uh, you think that that situation to transform many of the government entities and in specific the Puerto Rico Electric Power Authority, um, what was, uh, assumed as a strategy to pursue was we’re a 30 measures and some of those are 30 measures, for example, resulted in severe reduction in labor. Um, so after Hurricane Maria hit Puerto Rico, the Puerto Rico Power Authority was incredibly understaffed in order to be able to address the many needs and the urgency of the moment. Um, and aside from that, I would also include the fact that, um, up to Hurricane Maria, I would have to say that little or no consideration was given to climate change and the impact of climate change and the vulnerability that that climate change poses on our Caribbean island. Um, and also the fact that, uh, this centralized system that we have with our power authority just not harness the power existing in our community.

And I mean both, uh, power that that is energy related and also power to drive change. So you have this centralized system that had all the responsibility to restore power, to be able to respond to the dramatic effect of this category five hurricane. And the people were not active, participants were not engaged. We’re not part of that response from a government initiative. People did, did take obviously initiative at the community level, then we’re the ones who respond will be able to actually, um, comfort and provide some solutions to their community. But it was not the reaction or with, it’s not the result of an existing structure that is able to harness that capacity within our community and within the entire island.

John Farrell:

So you are working with our leading, I should say Cambio uh, Puerto Rico, which has collaborated with a broad coalition code, Queremos Sol to define what you, I have called a new energy paradigm for the island and in your presentation at the Black Star conference in March. And I just want to mention, we’ll link to that on our podcast show page for folks who want to see at the end to all the presentations are up on the web. Uh, you explained that this new energy paradigm includes a power system transformation. So this gets to what you were just saying about how communities have this power that was, was untapped, but that the power system transformation under public ownership, you have a commitment to 100% renewable energy, you know, through, I believe you could describe it as a shared governance model that would be rooted in local ownership and participation. Um, so I have a couple of questions about that. You know, who else is part of this, this coalition, Queremos Sol with Cambio. Uh, and then second, what transformations do you see needing to occur to the existing paradigm? As you mentioned, this centralized utility that’s been, had a lot of political intervention. How do those, how do things need to change? Who’s with you in this and, and what things do we need to see changing to help Puerto Rico be more resilient for a potential future?

Ingrid Vila:

Hurricanes of course won’t get him, sorry. Um, is, um, multisectoral um, proposal and effort, um, that we actually started working. Um, I would say probably spring 2018 after the hurricane when government started announcing that, um, privatization was the solution to all our energy sector problems. Um, and, and some of the folks, uh, who, who have been working in energy, some of the, the organization, um, professors, uh, folks in, in different sectors, we’ve got together and decided that aside from, uh, perhaps raising our voices and saying not necessarily that’s the best solution for the island with decided to get together and put together a proposal, a counter proposal to what was being discussed. And so, uh, within the cinema for coalition, we have, for example, the proper union worker. Uh, we also have the association Oh, prep our management employee. Uh, we have the Puerto Rico chapter of the Sierra Club.

Um, we have [name of another local organization]. We have a environmental dialogue committee, which is a local NGO. We also have the anti incineration coalition. Um, we have a UPR professors who were fundamental in terms of providing reports and analysis to, to really have a proposal that is that on facts and not just, it’s not an aspirational proposal. Does that a proposal that provides the technical route as well as the financial structure that is needed to engage in, in the transformation towards a hundred percent renewables on the island. Um, we also have Aida, which is the Institute for Energy Economics and financial analysis, which is the US, uh, based think tank that has a bit of working in Puerto Rico I think since 2015. Um, and we were also able to engage support from gossip willow, which is a local NGO based in at hotels who have been quite active for uh, even prior to Maria regarding renewables and has taken a leadership role in terms of getting a renewables who are our central mountain region.

We also have the green building institute supporting our proposal as well as the Puerto Rico Conservation Trust. Um, so this is a wide array of local entities with both energy sector expertise and environmental expertise, as well as community that have the fines and identified that, uh, we need to really pose form and stress. Then, um, the way that energy has been, uh, could use and how energy the energy sector has been developed on the island. And that is what that proposal to not only get to 100% renewable, but it’s a different way of getting there. Um, and I think that’s where it was. The great difference perhaps is, uh, with, uh, governments has the fine in terms of their objectives and goals and what we’re defining in front of what our objectives are. Um, and, and you were your second question, which was regarding, uh, the transformation that needs to occur.

Well, I think, um, one of the main thing is it’s kind of like, uh, uh, changing the way we approach energy and to start on this standing energy as a common good and the human rights rather than a market commodity, which is still how it’s being handled on the island. Um, the privatization model, for example, that’d be pursued by government limits, the active integration of citizens in the energy sector, um, and limited their capacity to enjoy the well of that. It could create, I mean, everything is left pretty much to market forces. And it’s Fed Puerto Rico could become a model for bottom up transformation with an integrated energy focus that could include risk reduction, climate change, hell at that stability, equity, democratization. I mean it could be a, a really a real paradigm change like I mentioned during the community presentation and you mentioned earlier, um, in terms of steering away from that centralized model into a more distributed model, uh, that both provides capacity building and provide wealth, this music.

John Farrell:

One of the things I found really interesting in the conversations I was having with folks on the island. I mean, one thing I definitely want to get to is to talk about some of the recent legislation that has been put forward. And you mentioned that you’ve alluded to that a little bit about this issue around privatization. One of the things I was curious about though and was hoping that you could talk a little bit about was where are the financial capacity comes from two to advance any of these visions really. But in particular this, this paradigm shift toward, you know, local and more democratic. Um, you know, as you mentioned, the island spend an economic depression for a while. Um, you know, I’ll link to a piece that I wrote that gives a little background on that. There’s some other good background. I kind of the kind of a colonial history, if you will, of the island and how this has kind of been building for a long time, but then you also have the, uh, utility PREPA is bankrupt right now. And so it is this public entity. It’s been managed poorly, but it doesn’t have any financial resources. Where would the resources come from to, to, uh, help with this transformation? What are you seeing as, as opportunities?

Ingrid Vila:

Well first of all, we have to take advantage of the fact that, um, a considerable amount of federal funding will be coming to Puerto Rico, uh, because of a Hurricane Maria, and particularly to rebuild or to address the energy sector needs. And one of the things that we propose a within the Queremos Sol initiative, it’s precisely to use those funds to, uh, jump start and to provide an accelerated integration of renewables with storage on the island. Um, but instead what, um, unfortunately if it’s starting to take safe in terms of what government is planning to do with these funds is that we will probably see an excess of deployment of natural gas investments, um, and that really use up most if not all of those federal funds. Um, and aside from, and we can perhaps talk a little bit more about this, uh, further on, but aside from the, the limitations that this natural gas investment will bring to the island in terms of being able to incorporate a renewable to a greater extent extent, it will also, uh, limit the amount of funding necessary or that could be used for energy sector transformation.

And we understand that if, uh, we, we were able to, or the government of Puerto Rico, we’re able to present a saw the light energy plan, it would be feasible to raise a minimum of one point $2 billion a year for the next five years. And that is a combination of federal funding, private sector investments, uh, plus long for example from entities like the rural utility services, also rate payer funded capital investment as well as philanthropic investment, which has obviously been an important fact and an important factor in the uh, past a year and a half. Um, so initially there could be funding the issue with how government is going to be using, um, that’s funding and whether they will be prioritizing renewables or whether they will be, um, concentrating on these massive investments in natural gas, which we do not think are necessary and would probably lock us into centralized fossil fuel combustion for 20 years, locking us in both with longterm contracts and locking us in in terms of having to purchase a certain amount of kilowatt hours for fossil centralized fossil fuel generation, which instead could be used for uh, distributed renewable generation.

John Farrell:

We’re going to take a short break. When we come back we’ll discuss a bill some are calling a Puerto Rican Green New Deal, why energy democracy is the right solution and what listeners can do to help.

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John Farrell:

You know, you’ve mentioned the government a couple of times and the other were a couple of legislators at the black start conference in March and they were talking about this Energy Reform Law bill 1121. It’s been covered in the media in a couple of places as quote the Puerto Rican green new deal. But I’m curious, how well does this law, which has stuff has language about renewable energy, how, how well does that reflect the paradigm transition that Queremos Sol has been asking for versus supporting this potential investment in gas or privatization?

Ingrid Vila:

Well, I think that that one, the main differences between the energy policy bill and get most slowly is that, um, if you look at an analyze the policy bill, it is actually trying to continue to pursue the old model. I mean it does have a aggressive rps and I think, uh, and we do coincide the, I’m also a proposal on the policy bill, um, coincide in terms of, of the renewable portfolio standards that that establishes. Um, but I guess the clarification to be made is that goals are one thing and government policy and accident or another. And in this case we’re seeing that they’re not going together. Um, and it must be noted that Puerto Rico has adopted in the past renewable energy goals and has never met them because enabling policy and political will have always been absent. And in this case it is not the exception.

So I would think that the bill, um, has, uh, aspirational RPS is because it’s not necessarily backed by the media policy to ensure that, that that aggressive adoption of renewables actually happened. Um, and it has some nonbinding green language, um, that actually masks, the law’s, uh, real objectives or results, which we’ll need to use of federal funds like I mentioned before, to convert to private longterm contracts, all existing and new generations who operate with natural gas. And this is a provision that is within the energy policy bill. And I mean if you’re going to be requiring all new centralized generation and all existing generation to operate with dual fuel, you’re requiring investment and one of the fuels needs to be natural gas. You’re requiring an incredible amount of investment to go towards that. I mean, it’s a requirement, whereas you don’t have such strict requirements with a renewable provision.

So this is going to obviously crowd out renewable generation and keep our dependency on fossil fuels. Um, and there are several and contradictions within the bill like exposing or already in limited agricultural land and natural resources areas to be used for large scale, uh, PV instead of concentrating on rooftop solar, which is what we promote in Queremos Sol. Um, also you have for example, private contracts that they can be excluded from compliance with the integrated resource plan, just positions. Um, so you also have to keep in mind that these energy policy though is, is, uh, is kind of like an output of a privatization bill. So a privatization bill was approved in 2018 in Puerto Rico. That required that an energy policy be defined for the island and get is what this energy policy, uh, build a site in the past months is the result of. But really what is behind all this is pretty much the privatization of an entity through an obscure process that lacks transparency or benefit cost analysis or any real utility transformation, which is what we need. Um, instead of just kind of like a change of hands from a public utility to a private utility with minimum, a real transformation to drive a change.

John Farrell:

So, you know, I, I thought it was really interesting that you mentioned, for example, this history of passing energy legislation, renewable energy targets that haven’t been met. Um, there’s been a lot of tension about, you know, it’s a publicly owned utility and in most places in the United States that are over 2000 cities that have a publicly owned utility. And normally they’re, the oversight is pretty strong. You have a city council or city government that oversees that and doesn’t necessarily metal in the operation of that utility. It tends to be some, some insulation in some separation from the political management, but it tends to be operated pretty well. You know, municipal utilities across the United States are generally known for having a affordable energy, uh, even compared to privatized counterparts. Uh, whereas there is often a lot of conflict and tension in other states about, uh, the way that the public radio regulatory commissions, the state oversight of private utilities, uh, is often flawed and results in some, uh, significant handouts to those utilities, uh, at the cost of consumers.

So I guess, uh, you know, I, I’ve always been surprised by privatization being put up as a solution to the challenges here because we, we really have, it sounds like as needed as this, um, you know, is this transparent and, and democratic oversight. Um, so I, I, I’m going to leave that there for a second and just say, you know, one of the things that is clear from the work of Queremos Sol and others is that there’s so much evidence that transitioning to renewable energy rather than, for example, lots of gas infrastructure means lower costs, big environmental benefits. Um, you know, what did you see as some of the specific benefits to an energy paradigm that’s rooted in, you know, what I call energy democracy, this notion of like local investment, local wealth building. You know, what’s better about that than having a centralized utility, whether it’s public or private?

Ingrid Vila:

Well, first of all, um, you must also take into consideration, uh, that uh, inequality in Puerto Rico is ram fam. Um, so to the extent that people become active, participating in generating energy, they can also benefit from the wealth that’s such an activity generation under a centralized system, whether it’s a utility or whether it’s a, a, I mean a public utility or whether it’s privatized, um, you will not have that wealth redistribution. Um, so in the case of Puerto Rico, uh, when we talk about a distributed energy future, we would be reverting energy extraction model or the wealth drain where over a $2 billion lever island and property purchase or a power purchase agreement. Nowadays, well, if we’re able to revert that and we’re able to use those funds to invest in renewables on guidance, that’s money bet that would stay here and it would be an important social economic equalizer and provide us with greater and stronger local economy.

Plus, when you talk about distributed energy and having people own their systems and, and provide for their, uh, energy, the man within their own household or within their own business, uh, we’re talking about a possibility for improved quality of life under both normal and extreme conditions like this is with Hurricane Maria. Um, also reuse it. Health and environmental impacts. Um, um, because of fossil fuel emissions and the reduction, and I’m, I’m in the nation of both, um, obviously more equal distribution of benefits and burdens. There are communities in Puerto Rico that have been severely impacted, uh, with obviously the operations of fossil fuels generating facilities, uh, throughout the island and having distributed renewable energy could provide some for some, uh, more equal distribution of the benefits of that and reduction in the burden that they have suffered for decades. Um, and obviously the benefit of capacity building of shared governance, of having a more, a more transparent governance structure and, and contracting process events for infections within, he’ll the, and consumers. Um, it’s an added benefit that, that, uh, you would think that it would be kind of like a, uh, an obvious option for anyone thinking of how to inform the utility yet it is not the, the obvious option that is being pursued by government.

John Farrell:

So I want to, I guess this is probably have to be my last question unfortunately, but I will see you in terms of time here. I, I really am curious about, um, in some of the conversations that I had, I met a number of remarkable people. I met, uh, Marcel Castro Sitiriche. I talked to him about kind of his focus on, you know, distributed solar and storage and foe and, and, and really on some of those more mountainous regions in Puerto Rico and, and how to help them be more resilient. Uh, I met a fellow Gi Cruz, who’s doing some organizing around cooperative ownership, uh, spoke with somebody who is involved with cooperative finance on the island. And one of the questions that I had was Ian, and you mentioned, uh, the rural utility service as well as a potential source of funds. There are, you know, so you have a government owned utility, you have the government trying to sell that utility to a private company.

You also have an opportunity where generating energy from rooftops or from micro grids or from other renewable, you know, renew— from renewable resources — is often cheaper than the energy that utility is trying to sell. You comes from dirty sources like, like oil or even potentially from gas. And I’m just curious, is there an option opportunity here or a possibility that community is sort of self organize and provide their own energy at your, my understanding is that for example, the federal government would help back loans to cooperative enterprises, uh, anywhere on the island, uh, that could help them launch. And any you could potentially be competing with other than whether it’s this public entity or a private one. The centralized utility, it seems like there’s a door would be open to compete with that utility and to simply say our community can generate its own energy for cheaper than could be provided by PREPA or its successor.

Ingrid Vila:

Definitely an and that is already occurring. Um, we have already communities that have organized and, and have been able to build out their, their, uh, renewable systems within the community level. They have relied mainly so far on philanthropic funding, but, and I think that what you mentioned is the fundamental part is being able to structure the financial products that will enable communities to not only organize but to make this feasible. Um, and that is one of the areas that we’re focusing on in Queremos Sol right now, is to be able to provide or to contribute to the capacity building of cooperative financial co-ops on the island to be able to define those financing products that are needed for communities to adopt these at accessible and reasonable prices. Um, CDBG [Community Development Block Grant] funding for example, uh, would be a great fit for these types of structures. And Puerto Rico should be receiving a considerable, I’m um, I’m sorry, a considerable amount of CDBG funding, uh, this faster recovery funding in the upcoming years.

So, uh, that could be an important leverage tool approved to subsidize and make it more affordable for these types of structures to, to, uh, gain ground and to progress within communities and at the community level. So definitely it’s going to be that, that is where I guess, um, right now the, the most important piece of the puzzle live is to be able to build out and define what bad financial structure could be and to be able to test it. I mean, we already have through the proof of concept on the island, and I think everybody convinced that renewables work. Uh, I, I wouldn’t say that was the case prior to Maria, but after Maria, there have been, uh, an enormous, um, acceptance from the general public in terms of renewable assets, possible, uh, energy stores for the island. Now the issue is to be able to prove that we can establish the financing structures to get to a hundred percent renewables with, uh, local funding with our local economic, uh, possibility because obviously still in topic and philanthropy has made an important contribution, um, after Maria. But we cannot accept philanthropy to just be the only source of funding for the transformation that we need. So, um, definitely co-ops are an alternative. Um, and there, uh, quite interesting and excitement within a co-ops in terms of being able to engage in adopting and pursue renewable energy, this refund within their portfolios. So, um, definitely something to, to continue to work on in the upcoming years.

John Farrell:

So, I would like to leave people with a couple of things hoping you can give in a briefly. One is for folks who listen to this podcast, many of whom are either organizing around clean energy or a working on clean energy policy. Is there anything that we could do that would be helpful to Puerto Rico? And then the second question is, what do you think is the most important thing that we can learn from Puerto Rico’s experience with Hurricane Maria and this rebuilding effort?

Ingrid Vila:

Well, in terms of clean energy actually are our most impending looming threat right now. Um, is um, bond restructuring deal that the fiscal oversight and Management Board has announced that they had reached with some of the bond holders. And this is a bond deal that will have a severe impact on, uh, the rates on the island. But it will also have incredible impact on renewable energy because it will establish pretty much, uh, an additional surcharge, uh, for all generation. And regardless of whether you generated with your own, uh, renewable, uh, system in your household or what you use PREPA, um, uh, generated electricity. So this could have obviously a severe impact on, on how quickly a renewable energy is adopted on the island. And, and it is something that is a pending review, um, and the Federal District Court. But it’s something that, um, I would urge everybody who was interested in renewable energy to take a look at. Um, and if possible to make an express and in terms of the severe and devastating impact of the video would have been in a renewable energy future on the island.

John Farrell:

Cool. Yeah. Ingrid, who would we make that expression too? If this is something that was of concern to us, would it be our elected federal elected officials that we should contact?

Ingrid Vila:

Well, you can make it, you can make an expression actually or write a letter or send an email to a judge Swain. Uh, she’s the Federal District Court judge who’s an handling all the title three cases, which are the bankruptcy court cases, uh, for Puerto Rico under the PROMESA Congressional Act.

John Farrell:

Okay. Excellent. Well, I will have a link for folks to do that on our show page. Um, what is it that we should learn? What’s kind of, what would you say is the most important take away that folks who are caring about a clean energy future, could learn from what has happened in Puerto Rico?

Ingrid Vila:

I would say that there is incredible power to be hard as at the community level. Um, and that if there is something that we can learn from a Hurricane Maria, is that if we are going through the pursuing a transformation of the energy sector, we have to acknowledge the possibility are providing the resources that communities need, that small businesses need to lead the way, um, in terms of the transformation. Um, people are very clear in terms of what we’ll need to do well and where we need to go in terms of, uh, uh, energy sector transformation, um, and the potential that it could provide the island in terms of, um, improved quality of life and lessened vulnerability. Um, and, and many other, um, uh, benefits that, that, um, obviously come along with all of and something that, that we need to continue to pursue. But it’s something that other communities should look into and try to, um, see how they can develop that and maximize their capabilities of organizing and deploying renewables. They’re not just waiting for government too. I mean, that was, I think one of the main lessons that we learned from Hurricane Maria is that people are ready to take action and ready to solve their own problems. They’re not just going to be waiting for government and enters the spectrum is one of those main in fundamental areas where people are causing accidents.

John Farrell:

This is John Farrell, director of ILSR’s Energy Democracy Initiative. I was speaking with Ingrid Vila of Cambio about the opportunity for Puerto Rico to model energy democracy for the rest of the United States. For more about Ingrid’s work with Cambio and Queremos Sol. Look for her presentation to the Black Start Conference in March, 2019 on our show page. You can also learn more about the underlying challenges and opportunities in Puerto Rico. Now, listening to our podcast with Marcel Castro Sitiriche episode 77 or reading my green tech media commentary from October, 2017 both are also linked from the show page. While you’re at our website reviewing these other resources, you can also find more than 70 past episodes of the local energy rules podcast.

Until next time, keep your energy local and thanks for listening.