Beatrice Lang
The Puerto Rico Electric Power Authority (PREPA) is responsible for electricity generation, power distribution, and transmission on the island. In 2017, Hurricanes Irma and Maria caused a collapse of most of Puerto Rico's transmission and distribution system, resulting in one of the longest blackouts in US history. To improve the resilience of the island's grid, the Federal Emergency Management Agency (FEMA) has provided over $6 billion in funding through the Hurricane Maria Public Assistance Program. Additionally, the Biden-Harris administration has made significant investments in Puerto Rico's energy grid, including initiatives to support vulnerable communities and enhance renewable energy infrastructure. The island has also been impacted by other hurricanes and earthquakes, causing power outages and infrastructure damage.
| Characteristics | Values |
|---|---|
| Name | Puerto Rico Electric Power Authority (PREPA) |
| Other Names | AEE, Puerto Rico Water Resources Authority (PRWRA) |
| Owner | Commonwealth of Puerto Rico |
| Function | Electricity generation, power distribution, and power transmission on the island |
| Management | Managed by the Puerto Rico Energy Commission, a government agency whose board of directors is appointed by the governor |
| Privatisation | Luma Energy took over Puerto Rico's power transmission and distribution system in 2021. In 2023, Genera PR, a subsidiary of New Fortress Energy, took over operation of the island's power plants. |
| Funding | The Federal Emergency Management Agency (FEMA) has obligated over $6 billion out of $9.5 billion approved for PREPA through the Hurricane Maria Public Assistance Program. |
| Initiatives | Replacement of 1.5 million meters with smart technology, deployment of 430 megawatts (MW) of 4-hour battery storage systems, acquisition of 14 generators for temporary use with a capacity of 340 MW |
| Legislation | In 2019, the Puerto Rico legislature passed the Puerto Rico Energy Public Policy Act (Act 17), setting a goal of 100% renewable energy by 2050. |
| Customers | Close to 1.5 million (as of 2015) |
| Power Sources | Petroleum-fired power plants (62%), natural gas (24%), coal (8%), renewables (7%) |
| Renewable Energy Potential | Rooftop solar installations, hydropower, wind, biomass |
| Support Programs | Community Energy and Water Resilience Installations, Solar Incentive, Agro-Energy Stability Program, Electrical Power Reliability and Resilience Program |
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What You'll Learn
The Puerto Rico Electric Power Authority (PREPA)
PREPA is a public corporation of the Government of Puerto Rico and is the sole electric utility in Puerto Rico, providing electricity to approximately 1.5 million customers. PREPA owns and operates electric generation, transmission, and distribution facilities serving all of Puerto Rico. In 2020, PREPA and the Puerto Rico Public-Private Partnership Authority ("P3 Authority") selected LUMA Energy, LLC, a Canadian/American consortium, to operate, maintain, and modernize the electricity transmission and distribution system of PREPA for 15 years through a public-private partnership.
Throughout its history, PREPA has suffered several outages that have left regions or the entire island of Puerto Rico without power. In August 2012, 14,000 residents were left without power following Tropical Storm Isaac. One of these island-wide outages occurred on September 20, 2016, due to a fire at a PREPA facility known as Central Aguirre, leaving all of Puerto Rico without power for three days. In September 2017, Hurricane Maria destroyed PREPA's distribution network, resulting in a blackout across the entire island.
In 2017, PREPA declared bankruptcy and began a privatization process. PREPA has accumulated over $9 billion in debt, and its bankruptcy case has reportedly discouraged investment and hindered economic development. In 2025, PREPA announced a new debt restructuring plan that reduces its debt from $10 billion to approximately $2.6 billion. As part of the privatization process, Luma Energy took over Puerto Rico's power transmission and distribution system in 2021, and in 2023, Genera PR, a subsidiary of New Fortress Energy, took over the operation of the island's power plants.
Puerto Rico has significant potential for renewable energy sources such as rooftop solar panel systems, and PREPA has reported an increase in residential rooftop solar generation capacity in recent years. The Puerto Rico Department of Housing offers a solar incentive program to encourage the adoption of rooftop solar systems. However, policy disagreements and debates about the transition to renewable energy sources have caused delays in meeting renewable energy objectives.
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Hurricanes and blackouts
The Puerto Rico Electric Power Authority (PREPA) is responsible for electricity generation, distribution, and transmission on the island. PREPA has a history of outages, with several incidents leaving regions or the entire island without power. In 2012, Tropical Storm Isaac left 14,000 residents without electricity. In September 2016, a fire at a PREPA facility known as Central Aguirre caused a three-day island-wide blackout. When Hurricane Irma passed north of Puerto Rico in September 2017, strong winds left 1 million residents without power.
Hurricane Maria, which struck shortly after, caused a blackout across the entire island. It took months to fully restore power, and many residents purchased generators. The initial $300 million contract for power restoration was given to Whitefish Energy, a Montana company with only two employees at the time. The hurricanes highlighted the vulnerability of Puerto Rico's electricity infrastructure and the need for more resilient and renewable energy solutions.
In recent years, there have been efforts to improve Puerto Rico's grid resilience and modernize its energy infrastructure. The Federal Emergency Management Agency (FEMA) has provided over $6 billion through the Hurricane Maria Public Assistance Program to support nearly 200 projects aimed at enhancing the reliability and resilience of the island's grid. The Biden-Harris Administration has also made significant investments in Puerto Rico's energy grid, including establishing the Puerto Rico Energy Resilience Fund with $1 billion to drive investments in resilient and renewable energy infrastructure for vulnerable communities.
Additionally, programs like Community Energy and Water Resilience Installations, Solar Incentive, and Agro-Energy Stability Program provide financial support for solar systems and renewable energy projects for residents and farmers. The Electrical Power Reliability and Resilience Program funds strategic projects that incorporate renewable energy technologies to ensure the grid's reliability, such as a microgrid for the Centro Médico Hospital in San Juan to maintain critical medical services during power outages. These initiatives aim to reduce Puerto Rico's reliance on fossil fuels, improve energy efficiency, and enhance the resilience of the island's electricity infrastructure to better withstand future hurricanes and blackouts.
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Privatisation of PREPA
The Puerto Rico Electric Power Authority (PREPA) is an electric power company owned by the Commonwealth of Puerto Rico. It is responsible for electricity generation, power distribution, and power transmission on the island.
In 2017, Hurricane Maria destroyed PREPA's distribution network, causing a blackout across the island. The same year, PREPA declared bankruptcy and began a privatisation process. On January 22, 2018, Governor Ricardo Rosselló announced the sale of PREPA's assets through a three-phase process to be completed within approximately 18 months. The first phase involved defining the legal framework, the second receiving and evaluating offers from interested companies, and the third negotiating terms with selected companies.
The privatisation of PREPA has been criticised for overlooking unionised workers and their labour agreements. Labour expenses make up only 8% of PREPA's total expenses, covering salaries, benefits, and pensions. PREPA's workforce supports approximately 6,000 households, and the utility is a major source of jobs on the island. By contrast, about half of PREPA's $3.4 billion in annual expenses goes towards off-island payments for oil, gas, and coal, as well as to investors, most of whom do not live in Puerto Rico.
Political mismanagement has also been cited as an issue, with a Financial Oversight Board study revealing over 200 political employees on the Authority's payroll. Constant turnover in management has led to inefficiency and chaos. The Puerto Rico Energy Commission has also identified widespread mismanagement within PREPA.
In 2021, as part of the privatisation process, Luma Energy took over Puerto Rico's power transmission and distribution system. In 2023, Genera PR, a subsidiary of New Fortress Energy, took over the operation of the island's power plants.
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Government funding for PREPA
The Puerto Rico Electric Power Authority (PREPA) is an electric power company owned by the Commonwealth of Puerto Rico. It is responsible for electricity generation, power distribution, and transmission on the island.
PREPA was originally named the Puerto Rico Water Resources Authority (PRWRA), created in 1941 to unify diverse regional and local electric power companies into one electric grid. In 1979, under Law 71, PRWRA changed its name to PREPA, as hydropower was no longer the primary source of energy in Puerto Rico.
PREPA has a history of power outages, leaving regions or the entire island without power. In 2012, 14,000 residents lost power following Tropical Storm Isaac. In 2016, a fire at a PREPA facility left the entire island without power for three days. Hurricanes Irma and Maria in 2017 also caused extensive damage to Puerto Rico's electricity infrastructure, leaving many without power for months. In 2019, the Costa Sur Power Plant was knocked out by earthquakes, cutting power to 327,000 customers.
In recent years, there has been a push towards renewable energy in Puerto Rico. In 2019, legislation was passed to phase out coal-fired power plants by 2028 and achieve 100% renewable energy by 2050. PREPA has made progress in this area, with residential rooftop solar generation capacity doubling from 2022 to 2024. The Puerto Rico Department of Housing offers incentives for residents to install rooftop solar systems, covering up to $15,000 of the cost. FEMA has also provided support, allocating $238 million for backup units after the Costa Sur Power Plant outage.
In terms of government funding, FEMA has been working with PREPA, providing technical support and allocating federal funds to the Government of Puerto Rico, managed by the Central Office for Recovery, Reconstruction, and Resiliency (COR3). PREPA has submitted projects for generation, including repairs and improvements to various facilities, for FEMA evaluation and construction funds approval.
Additionally, the PREPA Grant Program, established in 2015, provides funding opportunities for municipalities, watershed groups, and organizations within the Piscataqua Region Watershed. Funding for this program currently comes from the Bipartisan Infrastructure Law, with a total of $100,000 available for projects in 2024-2025.
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Solar power initiatives
Puerto Rico has been hit by several hurricanes in recent years, including Irma and Maria in 2017, Fiona in 2022, and Ernesto and Oscar in 2024. These hurricanes have caused widespread destruction, including devastating much of the Commonwealth's electricity infrastructure and leaving many residents without power for months. In September 2017, Hurricanes Irma and Maria caused the collapse of most of the transmission and distribution system in Puerto Rico, resulting in one of the longest blackouts in US history.
To address these issues and improve the resilience of Puerto Rico's energy grid, the Federal Emergency Management Agency (FEMA) has provided significant funding through the Hurricane Maria Public Assistance Program. This program has supported nearly 200 projects aimed at enhancing the reliability and resilience of the island's grid. Initiatives include replacing 1.5 million meters with smart technology for faster detection of energy service interruptions and deploying 430 megawatts (MW) of 4-hour battery storage systems to reduce reliance on backup power. FEMA also financed the acquisition of temporary generators to address generation shortfalls.
In addition to FEMA's efforts, the Biden-Harris Administration has made historic investments in Puerto Rico's energy grid. With $1 billion from the 2023 Consolidated Appropriations Act, the Department of Energy (DOE) established the Puerto Rico Energy Resilience Fund to drive investments in renewable and resilient energy infrastructure for vulnerable communities. One key initiative is the $450 million Programa Acceso Solar, which provides solar and battery storage systems to low-income households, especially those with medical needs or frequent power outages. This program ensures zero upfront costs and provides education on system use and maintenance.
The Agro-Energy Stability Program is another initiative that provides grants to eligible farmers for the design, acquisition, and installation of renewable solar energy projects to cover up to 100% of their annual energy consumption. The Electrical Power Reliability and Resilience Program funds strategic projects that incorporate renewable energy technologies, such as a microgrid for the Centro Médico Hospital in San Juan, ensuring critical medical services during power outages.
Furthermore, Puerto Rico has seen a growth in rooftop solar installations due to a net metering program that offers bill credits. The Puerto Rico Department of Housing also offers a solar incentive program that covers up to 30% of the cost or up to $15,000 for residents installing rooftop solar systems. These initiatives contribute to Puerto Rico's goal of achieving 100% renewable energy by 2050, with interim targets of 40% by 2025 and 60% by 2040.
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Frequently asked questions
PREPA is Puerto Rico's sole power provider, responsible for electricity generation, power distribution, and transmission on the island.
Puerto Rico's electricity infrastructure has been devastated by recent hurricanes, including Irma and Maria in 2017, Fiona in 2022, and Ernesto and Oscar in 2024. These hurricanes caused island-wide blackouts and left many residents without power for months. The infrastructure is fragile and in need of modernization and resilience improvements.
Various initiatives and investments are being made to improve Puerto Rico's electricity infrastructure. The Federal Emergency Management Agency (FEMA) has provided funding through the Hurricane Maria Public Assistance Program to improve the reliability and resilience of the grid. The Biden administration has also redirected funding to support technologies that improve system flexibility and response. Additionally, programs like Community Energy and Water Resilience Installations, Solar Incentive, and the Agro-Energy Stability Program provide financial support for solar systems and renewable energy projects. The Bipartisan Infrastructure Law also provides additional funding for grid modernization and resilience.
