Last month, Hurricane Fiona struck Puerto Rico, dumping more than 30 inches of rain and causing catastrophic flooding. The energy grid failed and plunged the island into darkness. Tragically, the $12 billion invested in the electrical grid in the wake of Hurricane Maria, did not leave the island more resilient. The power grid collapsed five years later under Hurricane Fiona.
The continuing vulnerability of Puerto Rico’s power grid is a textbook example of declining state capacity. The Commonwealth’s government cannot do its job effectively: raise revenue, maintain order, and provide public goods. Most critically, keeping the lights on has become a monumental task whose failure threatens the government’s legitimacy. Reconstruction of the power grid has been plagued by mismanagement and graft.
Increased disaster funding or stricter federal oversight alone will not be the solution. Without attracting talent and eliminating corruption, additional investments in the infrastructure won’t fix the grid.
Like many of Puerto Rico’s challenges, decades of fiscal challenges left the energy grid underfunded. In 2017, the Puerto Rico Electric Power Authority (PREPA) filed for bankruptcy. PREPA’s botched response to Hurricane Maria resulted in the firm’s privatization, leading to the arrival of LUMA Energy, a U.S.-Canadian consortium, to upgrade the electrical grid.
This shared authority has complicated everyday service and emergency response. Rolling outages are common, making drinking water disruptions and generator ownership a fact of life.
“Territorial disputes” between LUMA and PREPA are further complicated by the regulations governing the deployment of FEMA funding. Typically, federal funds are restricted to rebuilding preexisting infrastructure. Given Puerto Rico’s outdated electrical grid, Congress authorized disaster aid to go towards upgrading the system.
However, rising energy costs complicate the discussion. Currently, Puerto Rico generates approximately 97% of its energy using imported fossil fuels. An ambitious 2019 law requires the Commonwealth secure 40% of its energy from renewable sources. Part of the challenge is deciding whether federal funds can be used to modernize the existing fossil fuel-reliant grid or upgrade to a new renewable grid.
By 2019, public discontent with the poorly managed recovery contributed to the ouster of Puerto Rico’s governor. In one of the highest-profile corruption cases involving disaster funds, FEMA officials were charged with fraud and bribery surrounding $1.8 billion to rebuild Puerto Rico’s power grid. As a result, the Trump administration delayed the disbursement over concerns the funding would be improperly used. Of the $74 billion allocated for disaster relief by various agencies, only 35% has been disbursed.
In the aftermath of Hurricane Fiona, it’s clear how little progress has been made. Frustrated by LUMA’s slow response, several mayors hired their own crews to clear and repair transmission lines. Unfortunately, power is still not fully restored nearly a month after the hurricane, contributing to LUMA’s poor performance once again dominating political discourse on the island.
Resolving labor shortages in the energy sector, eliminating corruption in disaster relief management, and implementing a clear plan to modernize the electrical grid would prove that local authorities can govern and restore institutional trust. In addition, Commonwealth and federal officials must work together to determine a clear path forward for rebuilding the electric grid in a timely, efficient manner.
Congress signaled an interest in addressing the power grid’s failures. The upcoming midterms could keep the issue front and center as the Puerto Rican diaspora becomes a more visible stateside voting bloc. Already, public pressure led to a Jones Act waiver for fuel transportation, while an upcoming congressional hearing will examine the power grid’s collapse. Above all, the ongoing question of statehood for Puerto Rico looms, which could streamline disaster aid administration.
After decades of neglect, Puerto Rico’s failing power grid is emblematic of declining state capacity. Corruption, mismanagement, and inadequate disaster response left the grid vulnerable to Hurricane Fiona. Rebuilding the grid is a key first step to restoring Puerto Rico’s state capacity. Solving workforce issues, rooting out corruption, and developing a focused restoration plan are critical to charting a way forward. Notably, the upcoming midterms create a political opportunity to fix this issue for good.
Until then, it’s only a matter of time before the next blackout.
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