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disaster capitalism
Fury at Private Power Giants as Puerto Rico Suffers New Year's Eve Blackout
"People have been angry for a while now," said one San Juan resident. "This is just what we needed to end the year."
Dec 31, 2024
The latest failure of Puerto Rico's privatized power grid on Tuesday plunged much of the island into darkness on New Year's Eve, sparking fresh anger toward the system's for-profit operators and political leaders who sold off the U.S. territory's public utility company.
Tuesday's outage left over a million people without power, according to local officials. LUMA Energy, the Canadian American firm in charge of power transmission and distribution on the island, said in an update posted to social media on Tuesday afternoon that it is "working closely with Genera PR and other generators to restore power as quickly and safely as possible."
Genera PR, a subsidiary of the New York-based gas company New Fortress, received a multimillion-dollar, decade-long contract last year to operate Puerto Rico's power generators. In 2021, Puerto Rico's government—under the leadership of Gov. Pedro Pierluisi—chose LUMA to take over the island's power transmission and distribution operations in the wake of Hurricane Maria. The 15-year contract agreement, when it was announced, was loudly decried by advocacy groups as "terrible."
"In its singular pursuit of American investors, the local government has ignored political protests and demonstrations, disregarded the concerns raised by opposition political parties, and ignored studies that caution against privatizing the public power utility," Pedro Cabán, a professor in the Latin American, Caribbean, and U.S. Latino Studies Department at the University at Albany, wrote for The American Prospect last year. "For many Puerto Ricans, the Pierluisi government seems intent on converting the archipelago into a dystopia for its people."
"LUMA has Puerto Rico in an energy stranglehold, and Puerto Ricans shouldn't have to put up with continued subpar service."
The Associated Pressquoted Puerto Ricans expressing their frustration over the New Year's Eve blackout, which came months after an outage left 350,000 people without power.
"It had to be on the 31st of December!" exclaimed a man identified as Manuel, who said Tuesday was his birthday. "There is no happiness."
AP noted that the latest blackout "fanned simmering anger against Luma and Genera PR... as a growing number of people call for their ouster."
Camille Rivera, founder of La Brega Y Fuerza—a New York-based advocacy group that works to organize Puerto Ricans on the U.S. mainland—said in a statement Tuesday that "LUMA needs to fix the grid or get the hell out of Puerto Rico."
“Almost 25 years into the 21st century, it is ridiculous that Puerto Rico's power grid has failed its people again," said Rivera. "Puerto Ricans deserve answers and accountability from LUMA for this latest fiasco."
"LUMA has Puerto Rico in an energy stranglehold, and Puerto Ricans shouldn't have to put up with continued subpar service," Rivera added. "In 2025, it should be out with the old and in with the new—we have to fundamentally address the energy crisis facing Puerto Rico, reevaluate Luma's role as an energy provider, and build more sustainable solutions."
Conservative Gov.-elect Jenniffer González Colón, who is set to take office on Thursday, wrote on social media that "we can't keep relying on an energy system that fails our people."
AP reported that the incoming governor has "called for the creation of an 'energy czar' to review potential Luma contractual breaches while another operator is found."
Jeanette Ortiz, a resident of San Juan, toldThe Guardian on Tuesday that "the blackouts have been worse" since the privatization of the island's power grid.
"People have been angry for a while now," said Ortiz. "This is just what we needed to end the year."
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Progressives Demand Federal Action Against Companies 'Exploiting' Hurricanes for Profit
"This egregious price-gouging hampers evacuations and undermines recovery efforts, while putting vulnerable residents in serious jeopardy."
Oct 09, 2024
The head of the Congressional Progressive Caucus and a group of Florida representatives said late Tuesday that the federal government must do more to crack down on airlines, hotels, and other companies taking advantage of emergency conditions brought by Hurricanes Helene and Milton to jack up prices and pad their bottom lines.
"Instead of making it easier for people to evacuate, airlines and hotels are exploiting a horrific situation to charge astronomical fares only the rich can afford—from over $600 for a single night in a Hampton Inn to over $1,000 for flights that usually cost around $100," Rep. Pramila Jayapal (D-Wash.), the chair of the CPC, said in a joint statement with Reps. Maxwell Frost (D-Fla.), Sheila Cherfilus-McCormick (D-Fla.), Darren Soto (D-Fla.), and Frederica Wilson (D-Fla.).
"Exploiting vulnerable people fleeing a deadly storm for higher profits is a new low," said the CPC members as Hurricane Milton barreled toward Florida as a monstrous Category 5 storm, fueled by record-high ocean temperatures made far more likely by the climate crisis. The hurricane is expected to make landfall in the Tampa area on Wednesday night.
The federal lawmakers' statement came amid a flood of price-gouging reports from Florida residents seeking to escape Milton's path. A spokesperson for Florida's attorney general said earlier this week that the office had received hundreds of complaints about price gouging, particularly for fuel and water.
"There were also scattered instances involving overnight accommodations, including one Airbnb listing of a 'room in Tallahassee' for nearly $6,000 a night," The Tallahassee Democratreported Tuesday. The outlet noted that "during a storm-related state of emergency, state law prohibits price gouging for equipment, food, gasoline, hotel rooms, ice, lumber, and water needed as a direct result of the event."
The Biden Transportation Department, meanwhile, said it has "been in touch with airlines to get more information about the capacity and affordability of flights in the affected areas" amid reports of sky-high ticket prices. President Joe Biden said Tuesday that he is "calling on the airlines and other companies to provide as much service as possible to accommodate evacuations and not to engage in price gouging, to just do it on the level."
The Associated Pressreported that "by midafternoon Tuesday on the East Coast, airlines had canceled more than 700 U.S. flights, compared with fewer than 200 cancellations on Monday and fewer than 100 each of the two previous days, according to the FlightAware tracking service."
Major airlines, including Delta and United, said they capped fares under the emergency circumstances, but people seeking last-minute tickets reported dramatically elevated prices. One woman trying to buy a one-way ticket to New York said prices more than tripled "in a matter of seconds" as she examined her options.
"There were prices even as high as $1,000 for one leg. So wrong! So wrong!" the woman toldThe Associated Press.
In their statement Tuesday, Jayapal and the Florida lawmakers noted that "in North Carolina and Georgia, while families try to recover and rebuild from the devastating impacts of Helene, there have been hundreds of similar incidents of bad actors price gouging residents on everything from groceries to gas to hotel rooms."
"This egregious price gouging hampers evacuations and undermines recovery efforts, while putting vulnerable residents in serious jeopardy," they said.
While welcoming the Transportation Department's efforts to monitor and prevent airline price gouging, the progressive lawmakers said that "we will need a whole-of-government focus" in the coming days and weeks "on protecting the people impacted by these disasters from predatory price gouging."
"Further action is still needed from the federal government to stop the corporate exploitation that impacts all areas of American life, whether at the grocery store or gas station," the lawmakers said. "We need a federal ban on price gouging, more stringent antitrust laws and enforcement, and for Congress to reassert its role and governing power in this space—something CPC is deeply committed to and actively engaged in."
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Private Equity Exposed for Profiting From Fossil Fuels and Disasters They Cause
"Firms like Blackstone should be ashamed of this sinister investment strategy that contributes to catastrophe and rebuilds after it strikes," a report author said.
Sep 07, 2023
In yet another instance of disaster capitalism, private equity companies like Blackstone have found two ways to profit from the climate emergency: first by investing in fossil fuel infrastructure and then by buying up restoration companies that clean up after increasingly extreme weather events.
That's one of the main takeaways from a report released Thursday by the Private Equity Stakeholder Project (PESP) and Resilience Force titled Private Equity Profits From Disaster at the Expense of Workers, Communities, and Climate.
"Firms like Blackstone should be ashamed of this sinister investment strategy that contributes to catastrophe and rebuilds after it strikes," report co-author and PESP research coordinator Azani Creeks told Common Dreams.
"The investments Blackstone has made in both ServPro and its fossil fuel companies have long-term consequences that are borne primarily by already marginalized communities in the United States."
The report documents a shift that took place in the disaster recovery industry following Hurricane Katrina in 2005. Before that historic storm, cleanup work in a given area was usually done by smaller local companies.
"After the massive efforts required post-Hurricane Katrina and the increasing frequency and magnitude of climate disasters, private equity firms saw an opportunity to consolidate the market by buying up smaller companies," Creeks wrote in the report.
And the trend continues. Private equity firms bought 72 restoration companies between January 2020 and June 2023, with the number of purchases rising each year. They acquired 13 in 2020, 20 in 2021, 25 in 2022, and 14 during just the first six months of 2023. If that pace continues through the end of the year, the 2023 total will rise to 28, more than double the yearly purchases three years ago.
The report includes a list of 14 major disaster relief companies owned by private equity firms, five of which also invest in fossil fuels. For example, Blackstone, which owns ServPro, also bought Ohio's General James Gavin Power Plant—one of the leading single sources of coal pollution in the U.S.— in 2017.In another example, Louisiana-based disaster relief company the Lemoine Company also manages Lemoine Pipeline Services. The company is owned by the private equity firm Bernhard Capital Partners.
This profit-making strategy has major environmental justice implications.
"The investments Blackstone has made in both ServPro and its fossil fuel companies have long-term consequences that are borne primarily by already marginalized communities in the United States," Creeks told Common Dreams, adding that ServPro often hires immigrants and people of color who are vulnerable to unfair and unsafe labor practices like wage theft.
"Furthermore," Creek added, "Blackstone's financing of fossil fuel assets also inflicts direct harm on these same communities, who bear the brunt of toxic emissions and climate disasters."
Even if private equity firms aren't funding fossil fuels, their acquisition of restoration companies still means they have a responsibility to workers and communities, the report argues.
As disaster restoration companies have consolidated and gone national, they have organized themselves in a series of franchises and subcontractors. Of the 72 companies acquired in the last three years, more than 80% of them were instances of larger companies buying up smaller ones. These often-opaque corporate structures can make it difficult for workers to challenge their employers over issues like wage theft or unsafe working conditions. Undocumented workers are especially vulnerable, because any complaint may be met with a threat to contact immigration authorities.
"Though issues with wage theft and worker health and safety have long existed in the construction and disaster restoration industries, with an investment from the world's largest asset manager, you would expect to see these issues less frequently as more resources can be implemented to protect workers," Creek said. "Instead, the problems at ServPro and other private equity-owned disaster restoration companies persist, with even less mechanisms for accountability and public scrutiny than before."
One worker named Joél Salazar, who is also an organizer with Resilience Force, shared his experience ServPro subcontractor Royal Services. He said the company offered to pay his way from Florida to Colorado in early 2022 to help with wildfire recovery there, and promised him 40-hour workweeks and weekly paychecks when he arrived. But the travel costs never materialized, weeks started out closer to 20 hours, and the pay ended up being every other week instead.
"The company is stealing from me."
What's more, the payment was made via a Visa card. When Salazar said he had to return to Florida, the company canceled his card despite the fact that a significant amount of his earnings were still on it.
"The company is stealing from me," he said in the report.
Salazar said he wanted private equity firms and investors to be aware of what their companies were doing.
"Investors, I'm calling to ask you to consider worker safety at the companies you invest in, especially the private equity firms you rely on for profits," he said.
Another problem is unsafe working conditions. Companies owned by private equity firms racked up a total of 194 federal Occupational Safety and Health Administration violations between January 2015 and January 2022. The most common violations were exposing workers to asbestos and failing to provide them with respiratory protection, followed by failing to communicate dangers and protect workers from falls.
Recovery workers are organizing to protect themselves through the group Resilience Force, which says it is "building a strong, stable, inclusive, million-strong workforce that will be able to perform year-round climate preparation and adaptation work, as well as rebuild after disasters."
The group's founder and director Saket Soni said in the new report, "We must ensure that these companies, and their private equity backers who profit from disaster, pay and protect the resilience workers who are essential to helping communities adapt and recover."
What's better for workers will be better for the communities they help, as well. The report found that the private equity-owned firms engage in price gouging. For example, a ServPro franchise settled with the state of North Carolina for overcharging residents following Hurricane Florence.
The report highlights the legislative efforts of U.S. Rep. Pramilla Jayapal (D-Wash.), whose Climate Resilience Workforce Act would fund jobs and training through grants and make workers less vulnerable by providing a pathway to citizenship for immigrant workers and banning employers from asking about criminal history.
"The innovative Climate Resilience Workforce Act responds to the worsening climate crisis at the scale necessary by investing in a skilled workforce that is capable of not only responding to but preparing for the destructive impacts of climate change," Jayapal said when the bill was introduced in 2022. "As we create millions of good-paying, union jobs and center the very communities who are disproportionately impacted, we are finally building back better, greener, and stronger."
The report also issues recommendations to private equity firms to better protect the workers at the companies they own, such as setting up complaint lines, minimizing the use of subcontractors, funding programs to monitor their companies, and allowing their workers to unionize.
Finally, Creeks noted that firms like Blackstone manage public pensions, and have a responsibility to these workers as well.
"Public employees, such as teachers, nurses, and firefighters, have a right to know that their pension dollars are being used to purchase fossil fuel plants that are contributing to climate disasters all over the country," Creeks told Common Dreams. "In turn, their retirement capital is also being used to buy companies that profit off of these very disasters."
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