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Energy crisis

By Carlos Romero Barcelo of Caribbean Business

August 11, 2005
Copyright © 2005 CARIBBEAN BUSINESS. All Rights Reserved.

Shortly after I was sworn in as governor in January 1977, I sat down with my cabinet and newly appointed advisors to discuss our priorities. During that meeting, I told everyone that electricity and the use thereof was, to any modern society, the equivalent of the circulatory system in the human body. If the supply and distribution of electricity in our society weren’t working properly, every activity would be affected, just like a person’s health is affected if blood doesn’t circulate properly.

Therefore, one of the top priorities of my administration became the rebuilding of our energy production and distribution system. Our power-supply system had deteriorated to the point that, during 1974, 1975, and 1976, the number of power outages had increased to an intolerable level. There were so many blackouts and power interruptions, that it became a big political issue in the 1976 campaign. The Hernández Colón administration seemed to be incapable of doing anything about it. The system was so inefficient and fragile that the people of Puerto Rico were held hostage to the electrical employees union, whose threats to strike instilled such fear in the governor and the people, that their most outrageous demands were usually met.

To begin taking control of the system away from the union, I decided we had to do several things. First, we needed a complete study and evaluation of what is today known as Puerto Rico Electric Power Authority (Prepa). We had to know in what conditions the plants were, what needed to be done, and what it would cost to have the plants in top working condition. We needed information as to the peak demand, at any moment, and what needed to be done to make sure there was always enough electricity available to meet the demand. We needed to know how many megawatts of electricity we needed to have available at all times, in order to not have a power failure, even if a large plant or two went out.

We not only needed the facts as to our needs, but also if our facilities were capable of meeting those needs. We needed a plan of action with a schedule to rebuild Prepa in order to have an electrical-distribution system with sufficient capacity to put an end to power outages and provide for our growing demand–especially to attract new industrial and commercial investors.

An in-house study wasn’t advisable, since some of the problems were of a political nature. If the wrong people were chosen for the study, they would protect themselves and blame others. We decided to contract a well-known and reputable power company to do the study. Among the companies we considered were Con Edison, Westingware, and Georgia Power Co. We chose Georgia Power Co. and contracted them to analyze our system, tell us what we were doing wrong, what we needed to do, and how to go about doing it in order to have our power supply and distribution system capable of not only providing our requirements then, but also to be able to meet our growing demand.

In the meantime, I gave instructions to Prepa’s executive director that I wanted a report on my desk every Monday morning, which would list every plant, the plant’s optimum capacity in megawatts, and the plant’s peak production in megawatts, during the previous week. The report also provided me with Prepa’s optimum capacity, if all plants were in perfect condition; Prepa’s total available capacity during the previous week; and the system’s peak daily demand.

While we waited for the report, I organized an Energy Office attached to the governor’s office to help me formulate an energy policy, help me monitor and supervise Prepa, and keep track of oil prices and monitor our oil purchases. We were lucky to recruit a very capable and knowledgeable director. His name was Frank Castellón who, together with Pedro Vázquez and Wilfredo Marcial, helped bring order to our energy policy and public trust in our energy-distribution system.

The report and recommendations made by Georgia Power Co. finally were delivered. Some of the significant findings and the facts disclosed in the report were: (1) The peak daily demand for electricity at that time was around 2,100 megawatts; (2) The maximum available supply at any given moment was approximately between 2,200 to 2,300 megawatts; and (3) The optimum capacity (that is, if all plants were in good-working condition) was approximately 4,400 megawatts. In other words, if all of our plants were in good-working condition, we had an excess capacity of almost 100%. The excess capacity of most states fluctuated between 25% and 33%. Very few places in the world, if any, had an excess capacity of 100%.

What then, was the problem? The report told us the preventive-maintenance program was practically nonexistent. During the previous administration, the allocation for preventive maintenance had been reduced and very little attention had been paid to it. The result was that the plants were in constant disrepair and out of service for repairs, not for maintenance. The available capacity was severely reduced to a maximum available capacity of 2,300 megawatts. If a plant of 250 or 300 megawatts were to go out of service, then we had power outages.

A complete overhaul and rebuilding of plants, additional appropriations for a solid preventive-maintenance program, and organization of maintenance brigades led by specially trained engineers were recommended. Last, but not least, the preventive-maintenance program which, until then, had been handled by the union (Utier) employees, was to be controlled by Prepa, not by the union. Why? Because at collective-bargaining time, if the plants were in disrepair, the union had Prepa on its knees; and if they were threatening with a strike or went on a strike, union members could easily sabotage the system and cause power failures. The president of the union denied he or union members sabotaged the system. But eventually, when he left the union and decided to become a Christian preacher, he confessed publicly to having been involved in and to have ordered acts of sabotage in the plants and the power-distribution system.

Eventually, we carried out the recommendations of Georgia Power Co., and the system was rebuilt. All plants were producing the megawatts they were supposed to produce. Those that weren’t working were under preventive maintenance, not in repairs. The immediate production capacity was increased to approximately 3,300 to 3,400 megawatts and, by 1983, the peak demand had increased to approximately 2,400 megawatts. We had an excess capacity over peak demand of approximately 1,000 megawatts. By 1983 and 1984, there were no more "blackouts." Power failures became a thing of the past.

In 1984, however, the people of Puerto Rico had forgotten about the disaster of the 1972-76 Hernández Colón administration and voted for him again. He appointed Carlos Alvarado as executive director of Prepa, and he immediately re-employed many former Utier members who had been dismissed for sabotage during the two very long strikes during my first term. Not only did he re-employ many of those who had committed sabotage, but he also gave the preventive-maintenance program back to the union. The preventive-maintenance brigades were disbanded. The result: a complete deterioration of the whole system from 1985-1992. By the end of the ‘80s, we began having power outages as in 1975 and 1976.

Then came Gov. Pedro Rosselló, and he appointed Miguel Cordero as executive director of Prepa. Cordero did an outstanding job, rebuilding the system from 1993 to 2000. People started having faith in the system again. Yet, in 2000, the people voted for Sila Calderón and the power system again deteriorated. Once more, we started having power outages. This year, we have experienced an accelerated deterioration of the system and a politicized Prepa as we have never before seen. To abandon and mismanage our power supply and distribution system is to threaten the economic health and development of Puerto Rico. But, neither the governor, nor anyone else in the administration seems to know what to do.

Carlos Romero Barceló is a two-term former governor of Puerto Rico (1977-84), a two-term former resident commissioner (1993-2000), and a two-term former mayor of San Juan (1969-78). He was president of the New Progressive Party for 11 years.

This Caribbean Business article appears courtesy of Casiano Communications.
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