Monday, November 20, 2017

Are we ready for the big one?

By on September 5, 2017

–By Caribbean Business reporter Agustín Criollo and Editor Rosario Fajardo

The havoc being caused by climate change was more than evident with the recent passage of Hurricane Harvey, which recently slammed into the Texas coast as a Category 4 storm. Puerto Rico has had its share of this natural phenomenon since time immemorial; however, given the deplorable conditions of the Puerto Rico Electric Power Authority’s (Prepa) infrastructure, it begs the question: Are we ready for the big one?

Prepa Executive Director Ricardo Ramos Rodríguez recently said the powerlines carrying electricity in the public corporation’s system are in such a deteriorated state that a strong storm could leave the island without power for weeks.

“To give you a number, if during Hurricane Georges 100 lines went down in 1998, today the same [kind of ] hurricane would bring down 1,000,” the official candidly told Caribbean Business when asked about the possibility of Prepa’s system effectively withstanding the onslaught of a similar storm.

“The lifespan of most of Prepa’s equipment has expired. There is a risk that in light of this dismal infrastructure situation, a large atmospheric event hitting Puerto Rico could wreak havoc because we are talking about a very vulnerable and fragile system at the moment,” Ramos added.

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About two weeks ago, Prepa temporarily closed the Palo Seco powerplant to overhaul its deteriorating infrastructure after a study found the facility is “vulnerable” to an atmospheric or seismic event. The six-month project will cost about $6.5 million.

Prepa, mired with a $9 billion debt load, is bankrupt. After the financial oversight board rejected a deal to restructure Prepa’s debt because it would have prevented a possible privatization, Prepa filed for Title III bankruptcy under the federal Promesa law, which further puts impediments in the way in any attempts by the public corporation to finance projects and closed the door to any financing.

The utility’s modified Integrated Resource Plan—approved last year by the Puerto Rico Energy Commission—is aimed at improving infrastructure and services as well as reducing the island’s dependency on imported fossil fuels. The modified plan calls on Prepa to modernize generator units “to increase the service’s efficiency and trustworthiness,” substitute units at Palo Seco, retire “obsolete” units at San Juan and authorize the search for investments in transmission and distribution systems.

In addition, it contemplates obtaining permits for a new cycle unit combined with capacity for dual combustible and re-powering units 1 and 2 at Aguirre, where an explosion occurred Sept. 21, causing a mass power outage that affected 1.5 million residents.

The plan includes a directive to expand “energy efficiency” programs and renegotiate “above-market” renewable energy contracts. Prepa also needs to kickstart new renewable energy projects and comply with the Puerto Rico government’s mandate to have 20% of the island’s electricity from renewable by 2035.

Regular power outages

The government has vowed that the public utility’s financial troubles will not affect its operations, but outages have become more and more common in recent months. Most recently, 57,000 Prepa customers—representing 3.7% of the utility’s 1.5 million customers—were left without power last month when heavy rains, caused by a tropical wave, fell over much of the island. Prepa’s “critical conditions” are the result of “years of neglect,” said Gov. Ricardo Rosselló at the time.

The Puerto Rico Senate is now investigating the high incidence of power outages around the island. “Over the years, the infrastructure of the electrical system has faced a series of failures and technical problems, which reflect that the conservation and protection of the electric power system lacks adequate preventive maintenance,” according to the Senate resolution.

Electricity service for some 141,000 customers is disrupted every month, often taking more than an hour on average to be restored. Between 2010 and 2017, there was a 402% rise in service disruptions.

Ramos said he has begun working on a strategic plan to reduce disruptions and improve quality of service, and assured the island is not going through an energy crisis. He also noted there have been no massive and long-lasting outages, thanks to the way Prepa’s work team has handled the situation.

“In recent weeks, we have had many situations where the [power] conductor simply went down due to corrosion in the parts. However, there have been no general blackouts because our technical staff is aware of the situation and, through a generation dispatch that is safer, we use remote units around the island so the entire [power] generation is not concentrated in a few places. Instead, we have more generation distributed [throughout the island] and, thus, we have been able to cope with events in which two lines have been out of service,” he said.

Ramos also said there are serious structural problems at several powerplants and substations whose maintenance schedules, in many cases, have expired. He explained that the importance of doing maintenance work within the stipulated schedule is due to the fact that after a specific period, the public corporation’s insurance does not cover damages, which represents an additional expense for Prepa’s already battered finances.

In addition, the executive director pointed out that another area experiencing great neglect is ridding power lines of vegetation, a crucial maintenance effort to prevent customers from losing electricity service for large periods in case of a storm.

“We have structural problems in several powerplants, where the structure that supports the boiler is practically detached from its foundation, so what we do is take it offline because we believe it is not operating in a reliable manner,” Ramos said.

“We are using the remote units we have available all over the island, always looking out for the electric service’s reliability. We took on the vegetation trimming [schedule], which is in a super-critical situation, but we have had an impact by joining forces with the few resources we have. We have impacted areas according to priority and according to statistics on which [areas] are failing [to provide service],” he said, while also indirectly blaming Prepa’s past management as responsible for the neglect and lack of maintenance.

Pointing the finger

While several Caribbean Business sources working at different Prepa divisions confirmed the statement of the public corporation’s director, they pointed out that the main responsibility for this neglect is bad management, which has prevailed through decades of administrative changes between the Popular Democratic (PDP) and New Progressive (NPP) parties.

Francisco Guerrero (a fictitious name to protect his identity), a Prepa field worker for 23 years, said it would take months for Prepa to bring up Puerto Rico’s power system should a hurricane like Harvey strike the island.

The lack of linemen and other technical personnel, as well as a lack of equipment—including replacement utility poles for powerlines and replacement parts—are the issues of greatest concern among public corporation employees, who say they risk their lives working with equipment in poor condition that provides them with little safety.

Guerrero said that today only 580 linemen remain out of the 1,300 who were part of the workforce in previous years—and that’s not counting the upcoming retirement of another 90 linemen. Likewise, he said there are only 300 electrical line testers to serve the entire island.

The source also said that much of Prepa’s equipment dates back to the 1950s—and the more “modern” equipment that is still functional dates from the 1990s; in other words, it’s from the past century.

“If a hurricane like this one [Harvey] hits us, the system is not going to come online, I’d say, in over six months. Right now, the warehouses don’t even have materials. I’m talking about utility poles and other stuff,” Guerrero explained.

“How can you say that you have equipment that dates back to the 1950s and you are not buying parts to repair them? When it’s time for maintenance work, you don’t have the part and you leave things as they are, but there is an entry in the log saying maintenance was done. And yes, it was done, but the most important thing was not done, which was to replace that part,” he added.

Although he did not assign the debacle to former Prepa Chief Restructuring Officer Lisa Donahue’s order to stop buying supplies as the main cause for the lack of materials, he is certain the order was “the straw that broke the camel’s back.”

-For the rest of this article, please see the September 7 print edition of Caribbean Business

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