A failing power grid and affordability strains are dividing the island into haves and have-nots.
A worker fixing power lines on a utility pole in the town of Limones. Photographer: Xavier Garcia/Bloomberg , Photographer: Xavier Garcia/Bloomberg
Puerto Rico’s aging and fragile power company was already bankrupt and in desperate need of repair when Hurricane Maria tore across the island in 2017. The storm caused more than $90 billion worth of damage and knocked out electricity in some areas for almost a year. Since then, the management of the Puerto Rico Electric Power Authority, or Prepa, has been put into private hands, but problems persist.
The commonwealth government hammered out its own bankruptcy deal in 2022, cutting about $22 billion in debt to about $7.4 billion. But slashing Prepa’s obligations — while the power grid is being put under private management and requires billions in repairs — has been more contentious. Ariel Torres Ramos, the president of the board of Selectos, a Puerto Rican supermarket chain with more than three dozen locations, said local businesses pay the price of government mismanagement. Commercial energy rates in Puerto Rico are already double the US average. Small businesses can’t absorb any additional hikes, and it’s increasingly difficult to pass along the costs to strapped consumers.
“That debt was illegal but investors bought it anyway, knowing the risks,” said Cruz, who recently returned to Puerto Rico after living on the US mainland for a decade. “That debt is not ours and there’s no reason that we should repay it.” One of the main motors of the economy now is $120 billion in federal funds, issued in the wake of the 2017 hurricane season, earthquakes and the pandemic. The money is the equivalent to New York state receiving $2 trillion, according to the board that manages the island’s finances.
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