As the trustees of the Long Island Power Authority consider who will run Long Island’s electrical grid for the next decade, another island I know quite well has a lesson for those decision makers, for it will determine the system’s resiliency, public confidence, and regulatory compliance far into the future.
Puerto Rico has become the poster child of a failed power grid. Sadly, one of its biggest growth sectors has become personal backup generators. Hundreds of thousands of residents have been installing them next to businesses or homes in anticipation of the next blackout, similar to the one that turned out the lights across Puerto Rico on New Year’s Eve.
The situation has become so dire and power failures so systematic that Puerto Rico’s Public-Private Partnerships Authority is pursuing the legal course of action of pulling the contract from the company that originally won the competition to run the grid. The company is LUMA, a 50% owned subsidiary of a Texas-based firm called Quanta.
What makes this a compelling issue for Long Island is that Quanta is also the company currently competing to be the candidate to run the region’s grid on behalf of the Long Island Power Authority.
In Puerto Rico’s news outlet, NotiCel, their investigative reporters have revealed that officials seeking to revoke the operating contract from Quanta’s LUMA is based on issues that include “blackouts, lack of maintenance, failure to maintain the balance between energy supply and demand within the system, and lack of cooperation with the government to oversee its performance.”
The Center for a New Economy, a Puerto Rican think tank, is more damning. In one of their reports they observed, “Rate increases, widespread outages, and generally unreliable service have combined to generate street protests as well as calls by politicians, artists, and other stakeholders for the government of Puerto Rico to cancel or terminate the public-private partnership agreement with LUMA Energy for the operation of the island’s electric grid.
“As of the date of this Policy Brief, it is clear that LUMA has not performed up to expectations. A recent analysis by the Puerto Rico Energy Bureau (the “PREB”) found that both the duration and frequency of outages had increased during the six months between January and June of the current calendar year. This is a particularly disappointing finding because while we understand that bringing the performance of the system up to world-class standards will take years, so far, we have not seen even nominal progress towards achieving that objective. Indeed, according to the PREB’s analysis, the needle is moving in the opposite direction. Instead of seeing modest and continuous progress, say a 3 or 4 percent reduction in the duration of outages, we are, in a sense, in negative territory,” their report continued.
https://grupocne.org/2022/09/13/another-look-at-the-prepa-luma-agreement/
PSEG Long Island currently runs LIPA’s electrical grid. They have been criticized and fined for specific failures over the years, such as learning tough lessons from severe weather events such as Superstorm Sandy in a region. They were also fined following Tropical Storm Isaias in 2020, when the company experienced significant issues with its call center, leading to widespread customer frustration and criticism.
LIPA trustees will need to carefully weigh PSEG Long Island’s record of success and failure while conducting a due diligence audit of the company that seeks to replace them. LIPA’s judgment call needs to look at accountability, competence, innovation, and performance before they pass judgment. For those of us with relatives in Puerto Rico, the answer can be heard over the sound of backup generators.
By Hon. Francisco Diaz Jr. is a former State Assemblyman, many of whose constituents have families residing in Puerto Rico.
