Hurricanes, PREPA, and Puerto Rico electric grid

Friday, September 22, 2017

Hurricane Maria has hit Puerto Rico, damaging the island's electric grid and causing systemic power outages.  The storm made landfall on September 20 as a Category 4 hurricane with winds at 155 miles per hour.  Hurricane Maria's damage to power plants and transmission and distribution comes on top of damage from Hurricane Irma earlier this month -- and comes at a time when the government-owned utility company responsible for the island's electricity is functionally bankrupt.

In remarks, President Trump described his view of the damage:
Puerto Rico was absolutely obliterated... Their electrical grid is destroyed. It wasn't in good shape to start off with, but their electrical grid is totally destroyed and so many other things.
Electricity generation, transmission, and distribution in Puerto Rico is handled by a government-owned corporation, Puerto Rico Electric Power Authority (PREPA, known in Spanish as Autoridad de Energia El√©ctrica or AEE).  It generates power at a portfolio of plants, mostly fueled by diesel or heavy fuel oil.

But PREPA has significant debts -- approximately $9 billion as of earlier this year.  Years of discussions with creditors have apparently failed to provide relief.  On July 2, 2017, PREPA was reported to have filed in the United States District Court of Puerto Rico for protection under a workout process similar to bankruptcy, available under a 2016 federal law designed to bail out Puerto Rico.

While PREPA remains operational, its financial woes cannot help its ability to respond to Hurricane Maria.

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