The Electric Power Authority presented a ten-year radical transformation plan focused on improving customer service and moving towards a resilient and sustainable power grid.
The GridModPlan, developed in coordination with federal and state government representatives and with the private sector, would involve a $ 20.3 billion investment, mostly federally funded.
This is good news for Puerto Rico at a time when the flow of federal post-hurricane reconstruction funds has been delayed. The news also brings hope just after the Oversight Board recently warned that the island could receive less federal recovery funds than expected.
According to the local government at least $ 14 billion are guaranteed through funds from FEMA Public Assistance Program and Hazard Mitigation Section 404 as well as through the Community Development Block Grant for Disaster Recovery Program of the U.S. Department of Housing. The remaining $ 6 billion would come from other federal, state funding sources or public-private partnerships.
Puerto Rico has no time to lose to make that commitment a reality. Puerto Rico must move forward to rebuild the power grid as soon as possible and thus boost economic activity. It is now up to the public utility to demonstrate its capacity to diligently, efficiently and transparently execute the plan proposed.
The GridModPlan proposes to divide the island into eight microgrids that would operate independently and would be complemented by peaking units and businesses and industries that generate their own energy. It would also allow cooperatives and consortiums to generate their energy and offer alternatives to customers. According to the announcement, with this plan, customers will be able to produce energy and track their consumption and bill projection, an important factor for customer empowerment.
The implementation of the plan should also provide the circumstances for an electricity rate that contributes to the sustainability of debt restructuring and the transformation of the grid, without curbing investment and economic activity on the island.
Strengthening the power grid with the best practices and the most modern construction standards, as proposed in the new plan, should enable the economy to regain the momentum Puerto Rico hopes for.
The ten-year plan must also be a component of PREPA’s twenty-year Integrated Resource Plan (IRP), currently under the consideration of the Puerto Rico Energy Bureau. Its implementation should lay the foundations for the development of the power grid to last beyond eventual changes of government.
It must also drive a public energy policy that provides for a transition to energy sources that are cheaper and cleaner than fossil fuel. The plan contemplates the need to liquefied gas conversion, a fossil fuel with less volatile and lower prices than oil. Meanwhile, they must lay the groundwork for renewable sources such as sun and wind.
The Energy Reform is one in the series of structural transformations that Puerto Rico must successfully undertake to ensure its growth. And along with this, a deep tax reform is still pending, as well as a radical transformation of regulations and permits that delay the creation of businesses and discourage investment.
Two years after Hurricane María, Puerto Rico still has to get the economy moving. Funds for the power grid transformation must be honored with good planning and better execution until the island reaches the conditions to become sustainable