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Employees, retirees object to privatization of Puerto Rico power utility

By on February 28, 2018

SAN JUAN — Leaders of the Puerto Rico Electric Power Authority’s (Prepa) Alliance of Active and Retired Employees opposed Wednesday the sale of utility assets and its privatization, as intended by Gov. Ricardo Rosselló’s administration, claiming it would raise electricity and water rates and would hinder the progress of renewable energy use.

They lobbied for a democratic transformation of Prepa that results in greater efficiency in the use of the island’s resources, transparency in the decision-making process, and less politically motivated intervention.

The president of Prepa’s Irrigation & Electrical Workers Union (Utier by its Spanish acronym), Ángel Figueroa, said the utility’s main problem is management, but that there are other public corporations that have working models, such as the municipal entity that supplies power to Austin, Texas, which is managed by the city and provides affordable energy.

Leaders from Utier, Uitice, and the Associations of Managerial Employees and Retired Employees warned that the measure could increase water and electricity rates and would impede renewable energy development. (Felipe Torres/CB)

Figueroa stressed that the privatization model has not worked stateside, saying only five utilities have been privatized in the past decade.

The commonwealth government intends to sell Prepa’s power generation and other assets to private companies within 18 months as well as offering a private concession to manage the grid’s transmission and distribution for up to 25 years. Figueroa said the proposed model is similar to the one used for the Puerto Rico Aqueduct & Sewer Authority (Prasa), which failed.

The Alliance warned that the profits from generation would go to private hands while the cost of managing the transmission and distribution network would be paid by citizens. Thus, the Alliance argued, the government would be converting an essential service into a profit-making product.

“Electricity is one of the basic components of the country’s development and well-being. Prepa’s reason for existing is linked to offering an essential service to the citizenry without the intention of taking advantage of corporate profits and gain. Therefore, awareness must be raised about the advantages and implications of having a power corporation in public hands,” he said.

The union leader said that selling Prepa’s assets would have other negative ramifications, such as its impact on Prasa, since the power utility, not the water utility, owns many of the island’s reservoirs. Prasa is Prepa’s largest customer.

“Which is why water rates would rise,” Figueroa added.

He further posited that, although the government wants to increase the use of renewable energy, a private company would be hesitant to support those competing efforts.

U.S. Congress Raises Concerns Over Prepa Privatization

The Alliance also stressed that Prepa’s transformation should be about improving energy distribution. Most of the island’s electric power is generated in the southern region. Instead of building powerplants in the northern region, the Alliance argued, existing plants could be improved, as were Units 5 and 6 of the Central San Juan power complex.

The labor spokespeople reminded those present that in the event of a future natural disaster that affects the grid as was Hurricane Maria’s case, the financially strapped island would not qualify for federal aid again to repair infrastructure.

“The discussion should be: What do we want to change about our electrical system; where do we want to take it and how do we do it. Those questions aren’t answered in the proposal announced by the governor, who is motivated to push privatization to please groups of investors who have spent years trying to acquire the island’s jewel of the crown, which is its power generation system,” added Héctor F. Reyes, president of the Insular Union of Industrial and Electrical Construction Workers (Uitice by its Spanish acronym).

Prepa’s union criticized the government for pushing privatization as “a demagogic tactic that seeks to take advantage of the angst of large sectors on the island with people who live in the dark” since Hurricane Maria.

“The intentional acts of slowing down the restoration of the electrical system that all Puerto Ricans have suffered has been a mechanism of Prepa’s top management to exacerbate the discontent in the citizenry and propel their privatization plans, presuming it is the great salvation to address the problems the Authority faces. Our current priority is that our people have electric power service,” Figueroa said.

Javier Rodríguez, the vice president of the Management Employees Association, also expressed opposition to the utility’s privatization and the sale of its assets.

Johnny Rodríguez Ortiz, president of Prepa’s Retiree Association, said the public corporation’s privatization also represents a blow to retired employees, who live under the threat of losing their healthcare plan and having their pensions cuts.

“Us retirees are employees who dedicated an entire life to Prepa and public service on our island. We contributed to our retirement plan to ensure a future with dignity in our retirement years. All of this can come down crashing with privatization, causing greater impoverishment for our people, who to survive can only depend on their pension as income,” he said.

The Alliance leaders warned that in the coming days they will start offering educational events, coordinate with other groups and mobilize to denounce and raise awareness of the impact Prepa’s privatization would have on island residents.

The Alliance comprises the organizations that represent the power utility’s workers: Management Employees Association, Utier, Uitice, the Professional Employees Union (UEPI by its Spanish acronym), and the Retired Employees Association.

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