Instability Mounts in Puerto Rico Amid Privatization Efforts and Power Authority's Cash Shortfall

As nearly 250,000 Puerto Ricans remain without power five months after Hurricane Maria struck the island territory--the longest blackout in U.S. history--the Puerto Rico Electric Power Authority (PREPA) said Sunday it will reduce its operating reserve to save money, as the island's government moves toward privatizing the authority.

A federal judge denied PREPA a $1 billion loan over the weekend, saying the authority could not prove it needed the additional cash injection. The company will now reduce its reserve by 450 megawatts, saving $9 million per month but likely resulting in more power outages.

The additional instability comes as many residents are waiting for service to be restored, only to be told, according to San Juan Mayor Carmen Yulin Cruz, that repair work has been subcontracted out to companies that have yet to arrive.

Yulin Cruz pushed back against the privatization plan when it was announced last month, saying, "The privatization of PREPA puts the economic development of the country in private hands. The authority will serve interests."

Mayors including Jose Santiago of Comerio, Yulin Cruz toldDemocracy Now! on Monday, have been told by those working to restore the electric grid, that work can't be completed until subcontractors arrive.

"They have been told, 'You cannot open this road for us to go and do what we need to do because the Army Corps of Engineers has subcontracted that, and the Army Corps of Engineers is waiting for the company they've subcontracted it to, to bring their equipment and get the job done,'" said the mayor, who has been sharply critical of the response of the Trump administration to Hurricane Maria.

Yulin Cruz has also disagreed with Gov. Ricardo Rossello, who has praised the federal government's response and who announced the plans last month to privatize PREPA. Privatization, she said, is delaying the restoration of the power grid, which was originally promised by December and is now expected to be complete by mid-April.

Rossello, she told Democracy Now!, is promoting the privatization of PREPA by playing into classic "disaster capitalism," promising potential buyers huge profits because Puerto Ricans will agree to pay high prices.

"The governor of Puerto Rico made a terrible statement yesterday," Yulin Cruz said. "When asked in New York, 'Why would anyone buy PREPA?' he said, 'Well, there's a lot of space for making profits because the Puerto Rican people are used to paying high prices for energy...You may lower the cost of production of energy, leave the price very high and the gap will be yours.' If this is not disaster economics and this is not setting the stage for commercialization of services that are there to promote equality, I don't know what is."