Union leader denounces ‘conspiracy’ to privatize public industries
SAN JUAN – The president of the Irrigation & Electrical Workers Union (Utier by its Spanish acronym), Ángel Figueroa Jaramillo, alleges there is a conspiracy to deprive the island of its most profitable industry, the Electric Power Authority (Prepa), through the creation of a “fictitious crisis” aimed at delivering the major public corporation to private hands.
Figueroa Jaramillo made his expressions after announcing that the Puerto Rico Energy Commission (PREC) isn’t allowing the construction of the Aguirre Offshore Gas Port (AOGP).
“The Commission has just overruled the continuation of the Aguirre Gas Port. But even worse, it told Prepa to invest $15 million, of the people of Puerto Rico’s money, to continue with the permit process to see what can be done later. We cannot ignore this is part of the privatization process because one of the proposals the Commission amended last Friday, coincidentally two days after the blackout, was to put a private plant in Aguirre. So if we were to install the gas port right now, which at most would take a year of construction, we have clear evidence that energy costs will drop dramatically and would comply with the Clean Air Act. There is no justification to have a private plant there,” the labor leader said.
“We cannot overlook the fact that a new plant takes five to six years to build, then they put a stop to the most important infrastructure project for the people of Puerto Rico so the private industry can get a lead start and continue justifying the privatization process. On Friday, the Commission amended Prepa’s proposal, and today stopped the gas port, ordered the building of a new plant in Aguirre and another in Palo Seco. This is so you see how these people act in total coordination to rob us of the island’s top industry. Whoever controls the water, energy and communications, controls the country,” he stressed.
Figueroa Jaramillo assured that the Puerto Rico Oversight, Management and Economic Stability Act (Promesa) includes language specifically designed to safeguard “great corporate interests and against service for the people.”
“Promesa clearly states that the country’s power generation needs to be in private hands, and that goes against the interests and development of the people. Also, the gubernatorial candidates of the two major parties have said they support the policy of privatization that does so much damage to the people of Puerto Rico.
“At Utier, we have insisted that the big difference between the public and the private models to manage such a large company is that the public model can constantly lower the [electric] rate because it is the model that doesn’t seek a profit. However, if you insist on the private model through privatization, the electric bill will rise more and more because private enterprise’s main objective is profit,” the union leader said.
However, Figueroa Jaramillo accepted that currently there is no local capital to make an investment of such magnitude to address Prepa’s infrastructure problems. Still, he called attention to the fact that under private administration, the public entity and consumers would be under the obligation to pay the interest on that profit.
“Once the private plant is set up, that plant, which is a business, is it going to generate profit? Yes. And who is going to pay the interest and the profit? We, the people, through the electric bill,” he said. “On the other hand, with the public model, we don’t have the capital because they have driven us into debt. Can we acquire it? Yes. How? By self-financing? How do you self-finance? Just like cooperatives do, like the people who live in a condominium. When an apartment building needs to be painted, they don’t have to take out a loan, the residents themselves contribute and by doing so avoid the loan’s interest and have more savings. We can do the same. Both models represent a cost for the people, we aren’t hiding anything. But which one of the two will cost less?”
The union leader also said that it is Prepa and the consumers who would guarantee the production of that plant once it is built by a private company, at 75% for some 30 years. In other words, despite searching for energy alternatives through renewable energy, the consumer will always have to pay private enterprise for the generation of energy such as solar.
“If we are left bound by that model, of having five or six private plants, and tomorrow the country moves more aggressively toward renewable energy and we have energy under contract left over, would that energy under contract have to be paid? Yes, of course, even if you don’t use it because it is under contract,” he pointed out, just as the Energy Committee of the Puerto Rico Manufacturers Association did back in June.
“We in Aguirre are producing at 8 cents, and Ecoeléctrica sells it at 9 cents. Has someone taken it upon themselves the task of turning off Ecoeléctirca because it costs more than us? No, because it is under contract at 75%. Whether you need it or not it has to be paid and that is the model that they are not explaining clearly to the country. We socialize the pernicious part of the energy generation industry so the country can improve the lines, improve the transmission, while the private sector benefits selling their product and that is what has to be clearly said to the public,” he added.
Figueroa Jaramillo signaled out Senate President Eduardo Bhatia as the architect of the alleged conspiracy to privatize the public corporation and that to say there is no private investment in the Prepa is a wrong assertion.
“The $9 billion of the bondholders, where do they come from? Well, from the private sector. Thus, it is a fallacy to say that the private sector does not invest in the country. They are there and they are being paid quite high interests. That is why we insist in defending a public model, that while it represents a greater effort, in the long run is better for the people. Under the private model we can only expect more debts at Prepa and constant increases in the power bill to satisfy the search, increasingly greater, of profit by private enterprise. In this case, involving an essential service such as electric power,” he said.
“It is important for the country to share ideas about this, it is a public debate, and we must take it to Bhatia, who has been driving this process, because the country deserves to be presented all alternatives. In this private model, has the cost of energy been addressed? Now, suddenly, that isn’t an ‘issue’. First, it was that electric power was expensive, when the rate was lowered no one said anything, but meanwhile they keep abandoning the system. Now they create the collapse, bring in private enterprise. But has someone talked about if it is cheaper or not, or is it that cost is not important now,” he asked.
On Tuesday, Prepa announced it would accept the modification to PREC’s integrated resources plan, but that some of its conclusions should be cleared up.