Puerto Rico is privatizing its electric grid.
Puerto Rico flirts with disaster capitalism
After Hurricane Maria, Puerto Rico Electric Power Authority (PREPA) agreed to a questionable $300 million contract with Montana-based Whitefish Energy. The decision to go with a private company came after some deliberation – PREPA could have requested workers through the American Public Power Association, but instead, they went with Whitefish in hopes of maximizing the bang for their buck – PREPA had been bankrupted by $9 billion in debt and couldn’t really afford to utilize the network of the Public Power Association, plus the island had been ransacked by the storm, leaving it without resources of its own to handle the damage. Eventually, after lots of reporting and public outcry, Puerto Rico cut the contract. Four months after Hurricane Maria, one million Puerto Rican residents have had their power restored, but 450,000 are still without electricity. Despite this massive number, FEMA announced Tuesday it would be ending shipments of food and water to the island today.
Another significant development that may spell bad news for PR is this: Ricardo Roselló, Puerto Rico’s governor, announced last week that he intends to privatize PREPA.
You may wonder why this is bad, especially when, as mentioned earlier, PREPA is constrained by a mountain of debt with no realistic way, at the moment, to pay it off. Let me explain:
Supporters of privatization see it as a sort of panacea: decrease government involvement, decrease taxes, increase healthy competition, increase productivity and output. Developing countries, especially in Latin America, have gone through an intense process of privatization in the last three decades, jumping on the globalization bandwagon and raising billions of dollars to plug up their national debt. However, privatization, while lucrative, does not always guarantee improved service. It also sets the stage for exploitation. A profit-driven company that controls, say, energy, healthcare, or education, can deny these services or charge unaffordable prices if there’s not much competition. Private companies are much less accountable to their customers, especially their poor customers, than governments are to their constituents. And as Kate Aranoff observes at The Intercept, private companies are “obligated to provide profits to their shareholders, whose interests are often divergent from those of the general public.”
PREPA and the PR government have been accused of “priming the pump” for privatization by playing austerity politics and intentionally degrading service.
Another question that needs to be asked is this: Who would want to buy a utility that’s buried in $9 billion in debt? One answer that immediately springs to mind is: disaster capitalists. Those looking to get in, exploit the current disastrous state of the country to make some quick money, then move out.
Water over the bridge: The governor’s office also recently announced plans to dismantle the Puerto Rico Energy Commission and the Independent Office for Consumer Protection, two agencies that regulate PREPA and support the ratepayers.
The combination of privatization and deregulation seems dangerous, potentially reducing, dramatically, the control Puerto Ricans have over the state of affairs in Puerto Rico. But the plan is already in motion, so I guess we’ll see how it goes.
Tariffs on solar panels may cost the solar industry thousands of jobs.
On January 22nd, President Trump moved to impose a 30% tariff on imported solar cells and modules. In theory, the tariff aligns with Trump’s “America First” speechifying, but in actuality, it may cost the US solar industry around 23,000 jobs in 2018, solar advocates warn. The tariff also puts around 130,000 solar panel installation jobs at risk, should the higher prices lead to a decrease in demand.
Two US solar companies (one with a Chinese majority owner), Suniva and SolarWorld, filed a complaint with the US International Trade Commission, claiming imports were hurting US solar manufacturing. Environmental groups see this as the Trump administration’s latest attempt to undermine green energy. Interestingly, the Republican party isn’t having it, either – as Dino Grandoni observes at the Washington Post, “Green or not, the solar business is still a business,” and free-trade folks aren’t into tariffs on international trade or industry-wide job losses.
Nearly every member of the National Park System Advisory Board just resigned with a reproachful letter to the Department of the Interior.
The letter was written by former Alaska Governor Tony Knowles, the (now-former) Chair of the Board, after repeatedly trying and failing to meet with Interior Secretary Ryan Zinke (who’s having a rough year, as this excellent Washington Post article points out). The letter first summarizes the board’s accomplishments from 2016, NPS’s centennial year, and then goes on to call out the failures of 2017:
“We understand the complexity of transition but our requests to engage have been ignored and the matters on which we wanted to brief the new Department team are clearly not a part of its agenda… from all of the events of this past year I have a profound concern that the mission of stewardship, protection, and advancement of our National Parks has been set aside.”
The group of those who resigned – nine of the twelve Advisory Board members – were a bipartisan group of individuals from across the country whose terms would have otherwise ended in 2021. One other member resigned separately, days later. The two remaining board members will be finishing out their terms in May.
Cape Town drought
As my colleague Alex Brandte mentioned in last week’s international roundup, Cape Town, the coastal city in South Africa, has been facing a historic drought. Made worse by climate change and population growth, current projections estimate that water could stop flowing by the end of April, after which citizens will have to line up to collect a menial 6.5 gallons of drinking water per person per day, according to NPR. If current conditions continue, Cape Town will be the first major, developed city to run out of water. We’ll keep you updated on this one as we approach Day Zero.
Some things that might restore your faith after all this (mostly) stressful news:
The first-ever electric container ships are set to sail this summer!!!
A cow ran away with a herd of bison and it’s silly and weirdly cute.
Corporations and conservationists can work together.
Today, I’m a proud Washingtonian. On January 29, Washington state’s Governor Jay Inslee took a stand and officially denied Tesoro Savage’s plan for a Vancouver, WA Energy Distribution Terminal, claiming the project was not in the “public interest” due to potential for spills, fires, and earthquakes. Shout-out to my governor for keeping my waterways safe.
header image: "army supports hurricane recovery," army cyber / flickr