El último apagón (del año): A Statement on the NYE Blackout in Puerto Rico

Puerto Rico woke up to darkness this morning as a result of a countrywide energy blackout. It is likely to remain in the dark for up to 72 hours. Beyond the mere inconvenience of losing power, in the case of Puerto Rico, a multi-day blackout represents a threat to life and livelihood. Not only are critical healthcare systems (e.g., hospitals, clinics, trauma centers) exposed to this systemic power grid failure, so are the thousands of Puerto Ricans who depend on respirators, medications that must remain temperature controlled, and other critical life-sustaining apparatuses in their homes. In an island that is 60% mountainous, a power blackout also represents a loss of water supply as water pumps rely on electricity to supply safe drinking water to the highlands. Moreover, economic activity will be jolted to a halt in the midst of the Christmas season (that extends until January 6), and the height of the tourist season.

Residents of Puerto Rico are living through these indignities and threats to their lives despite paying for some of the highest energy costs in any US jurisdiction. While the company responsible for energy distribution and transmission—LUMA—has pointed to the disastrous conditions of the energy grid after decades of infrastructure disinvestment and neglect and the aftermath catastrophic hurricane Maria in 2017, LUMA has been responsible for the provision of electricity since 2020, a period during which systemwide blackouts and brownouts have been common, while utility rates continue to increase. 

General popular discontent and protests have created enormous pressure on the Commonwealth government, which along the local political parties, has continued to politicize the situation. Popular pressure to terminate LUMA’s contract entered the electoral contest this past November, with the leading candidates proposing to do just that. However, the preferential terms offered LUMA and the lack of transparency in the entire procurement process have made it very difficult to renegotiate the terms or to even terminate the 15-year contract. Energy consumers in Puerto Rico have been told to expect a 9.5% increase in their LUMA electricity bill in 2025; this as the crisis for reliable and accessible electricity continues to escalate. 

Nevertheless, local commentary is pointing to the blackout serving multiple purposes: as a shot across the bow to the incoming Jennifer Gonzalez administration who bet her candidacy for governor on cancelling LUMA’s contract, and as a sign or warning to alternative providers of energy distribution and transmission of the great (political) challenges of providing services in Puerto Rico as a way to forestall and limit any competitors in the field.

The preferential terms of LUMA’s 15-year contract let by the government make it very difficult to terminate the contract unless very onerous terms are satisfied, representing an added hardship for utility customers. The lack of accountability of LUMA’s performance only fosters a climate of political theater by the incumbent political party and its opposition, which creates a lot of noise but little if any actual relief. The privatization of energy production and distribution does not appear to be working, often by contractual provisions allowed by the government that limit competition and foster monopoly control without any of the benefits that a government-held corporation might provide. Off-the-grid production and use of electricity, admittedly benefitting a privileged few, is hampered by restrictions on certificates of occupancy for homes not connected to the grid. Moreover, the option of bringing energy production and distribution back under government purview is likely out of reach since the federal Financial Oversight and Management Board for Puerto Rico (La Junta) is highly unlikely to approve any bond issue or any additional form of debt that would increase the exposure of the government of Puerto Rico to further indebtedness.

Puerto Rico is bound to LUMA for the next 9 years, any changes to the terms will be contained in the lack of performance on LUMA’s part and the willingness of the Commonwealth government to hold LUMA to account and to the terms of the contract. So far, this willingness is lacking.

For further reading, please visit: https://periodismoinvestigativo.com/series/la-encerrona-de-luma

Please see our documentary series PR Voices to learn more about the energy crisis in Puerto Rico: Season 5 episode 1, “Privatized Resilience”