Puerto Rico to slash energy reserves amid cash shortfall
SAN JUAN, Puerto Rico (AP) — Puerto Rico's power company said Sunday that it will reduce its operating reserve to save money amid a cash shortfall as officials warned the move could destabilize the U.S. territory's fragile electrical grid.
William Rios, director of generation at Puerto Rico's Electric Power Authority, said a plan to reduce its reserve by 450 megawatts will not affect customers and will help save $9 million a month.
Public Affairs Secretary Ramon Rosario said that while the measure is needed, it could affect a grid still experiencing frequent blackouts as nearly 250,000 customers remain without power more than five months after Hurricane Maria. The Category 4 storm destroyed two-thirds of the power distribution system and caused the longest blackout in U.S. history.
The measure to reduce the operating reserve comes just days after a federal judge rejected a $1 billion loan request for Puerto Rico's power company, saying there was not sufficient evidence to prove the power company needed the money. Government officials and a federal control overseeing Puerto Rico's finances on Friday lowered their request to $300 million per the judge's instruction but warned that would only allow the company to operate until late March.
"The power company's fiscal situation is real and we have to deal with it now," Rosario said.
Both he and Gov. Ricardo Rossello have called on the U.S. Treasury Department to release a billion-dollar loan that Congress approved in October for disaster recovery, saying it would help ease the power company's financial situation.
Last month, Rossello announced plans to privatize the company, which is $9 billion in debt and operating with infrastructure nearly three times older than the industry average. The U.S. territory experienced frequent blackouts even before the hurricane, including an island-wide outage in September 2016.