Early on Dec. 31, virtually the entire island of Puerto Rico went dark and the blackout is expected to continue for a few days, according to the Washington Post. Seven hours after the blackout, power has been restored to only about 3% of the customers.
Two main problems in Puerto Rico continue to be the 2016 imposition of the Financial Oversight and Management Board for Puerto Rico which included Natalie Jaresko, former Minister of Finance in Ukraine, and who was appointed as the board’s executive director. (Jaresko was forced out by popular opposition in 2022). The other big problem was the January 2018 privatization of the electric power grid.
After the September 2017 Category 4 Hurricane Maria, the Federal Emergency Management Agency allocated nearly $10 billion to upgrade the power grid—yet FEMA’s cash was not part of the solution. FEMA’s first effort to “help” after the hurricane was to award a no-bid contract for power restoration to the Montana-based company Whitefish Energy, but the contract was soon cancelled after a political backlash. Later in the same year, another contract was cancelled, due to charges of bribery and corruption, when FEMA tried to hire Cobra Acquisitions to take the place of Whitefish. Equally bad was the advice from the U.S. Department of Energy’s report on energy reliability in Puerto Rico which is less about energy reliability and more about transition to renewable energy.
Meanwhile, the island’s power distribution system was privatized, but under a Canadian/American outfit called Luma. Power rates doubled to become among the highest-priced electricity in the world, yet Luma has one of the worst reliability ratings since the days of Enron. According to CBC the Canadian CEO of Luma, Wayne Stensby, is the most hated man on the island. In 2021, Stensby was labeled a fugitive from justice; police raided his Luma offices, and arrest warrants were issued when he refused to turn over financial records. So much for privatization creating more transparency and accountability.
