Monday, September 24, 2018

Puerto Rico revitalization coordinator doesn’t rule out power utility’s privatization

By on October 26, 2017

Noel Zamot said the fiscal board will soon be filing a motion before federal Judge Laura Taylor Swain to formally authorize his appointment. (Jaime Rivera / CB)

SAN JUAN – The privatization of the Puerto Rico Electric Power Authority (Prepa) could be part of the utility’s “long-term future,” said Noel Zamot, who is expected to take over the reins of the public corporation’s “transformation.”

However, he assured that his immediate objective will be “to restore electricity to the people of Puerto Rico as soon as possible.” For this, he said he will bring “more external resources” to be part of the grid’s restoration work after the passage of Hurricane Maria.

“They need more resources,” Zamot said in a telephone interview with Caribbean Business hours after the commonwealth’s financial control board announced its intention to appoint him “chief transformation officer” of the public electric utility. “Outside help is needed,” he added.

Although Zamot, who is also the revitalization coordinator as defined in Title V of the Promesa law, recognizes there are immediate needs to address, the idea is to “integrate those short-term solutions” with the fiscal board’s “long-term plans” for Prepa, which include “reasonable rates” and a “resilient” system.

The announcement of his appointment comes about when the effectiveness of the grid-recovery efforts after Maria are being scrutinized, as well as the multimillion-dollar contracts granted by Prepa to firms such as Whitefish Energy and Cobra Energy to perform certain jobs. The recovery work also involves the Army Corps of Engineers, which in turn has contracted other companies.

A look into Whitefish Energy, hired to rebuild Puerto Rico’s power grid

Asked if he will continue with the same logistics, companies and efforts implemented so far to restore power service on the island, Zamot replied that “we will definitely continue with what was being done.” He insisted that the intention behind his appointment is to help Prepa.

The board’s decision did not sit well with La Fortaleza. Gov. Ricardo Rosselló Nevares was quick to react and warned that Promesa provides for the board to supervise, not manage, the government and its public corporations. He also assured that his administration will defend itself against any action taken “by whoever” goes against the elected government’s faculties.

Puerto Rico gov’t calls complaints about Whitefish ‘inferences’

The fiscal board, meanwhile, has already suggested that due to the bankruptcy-like process under which Prepa is in–Promesa’s Title III restructuring–the panel can appoint someone to take over the reins of the public corporation for the duration of the in-court process.

Zamot explained to Caribbean Business that the board will soon be filing a motion before federal Judge Laura Taylor Swain to formally authorize his appointment.

Regarding the outside aid needed by the government to speed up work to restore Prepa’s infrastructure, Zamot reiterated that additional resources that could be accessed have already been identified, including more federal funds through the Federal Emergency Management Agency (FEMA).

He also pointed out the possibility of getting “resources” from the U.S. Department of Energy, private institutions and professional associations. As an example, he recalled a recent conversation with a stateside power-company executive willing to mobilize resources to Puerto Rico.

More than a month after Maria, Prepa’s power generation stands at 26.2%, according to the commonwealth government, which says it will increase that percentage to 95% by Dec. 15.

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One Comment

  1. rtryon

    October 27, 2017 at 7:57 am

    Is it time to sense that PR can pay some of its debt by selling its restored utility assets as part of a plan that will resolve the status issue? With the report of population to drop below three million, an amicable divorce with alimony for several decades could lead to a free associated state and make the current name in Spanish be correct “Estado Libre y Asociado”. Who knows it might lead to dual citizenship and be a tax haven for retirees under law 20/22!

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