
The Puerto Rico Electric Power Authority (PREPA) is a public corporation of the Government of Puerto Rico created pursuant to Act No. 83 of May 2, 1941. PREPA owns and operates electric generation, transmission, and distribution facilities serving all of Puerto Rico. As the sole electric utility in Puerto Rico, PREPA provides electricity to approximately 1.5 million customers. In 2020, PREPA and the Puerto Rico Public-Private Partnership Authority (P3 Authority) selected LUMA Energy, LLC to operate, maintain and modernize the electricity transmission and distribution system of PREPA for fifteen years through a public-private partnership.
Characteristics | Values |
---|---|
Owner | Commonwealth of Puerto Rico |
Publicly owned | Yes |
Founded | 1920s |
Original name | Puerto Rico Water Resources Authority (PRWRA) |
Created by | Act 83 on May 2, 1941 |
Responsibilities | Island electrification |
Customers | 1.5 million |
Power provided | Less than half as much power as similar-sized U.S. mainland utilities |
Electricity generating capacity | 93% fossil fuel-fired power plants |
Accusation | Hoarding materials and delaying the restoration of power |
What You'll Learn
Government monopoly
The Puerto Rico Electric Power Authority (PREPA) is a public corporation of the Government of Puerto Rico created pursuant to Act No. 83 of May 2, 1941. PREPA owns and operates electric generation, transmission, and distribution facilities serving all of Puerto Rico. As the sole electric utility in Puerto Rico, PREPA provides electricity to approximately 1.5 million customers.
The authority was ruled by a board of directors appointed by the governor with the advice and consent of the Senate. Until January 22, 2018, PREPA was the only entity authorized to conduct such business in Puerto Rico, making it a government monopoly. Former governor of Puerto Rico, Ricardo Rossello, announced that all assets of the company will be sold in a general privatization of PREPA.
In 2022, fossil fuel-fired power plants provided 93% of Puerto Rico's electricity generating capacity. 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.
On January 6, 2018, representatives of FEMA, the U.S. Army Corps of Engineers, and their armed security details entered a Palo Seco warehouse owned by PREPA to obtain and distribute a massive store of spare parts needed to restore grid power. PREPA has been accused of hoarding the materials and hence delaying the restoration of power.
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Public corporation
The Puerto Rico Electric Power Authority (PREPA) is a public corporation of the Government of Puerto Rico. It was created by Act No. 83 of May 2, 1941, during the governorship of Rexford G. Tugwell. PREPA owns and operates electric generation, transmission, and distribution facilities serving all of Puerto Rico. It provides electricity to approximately 1.5 million customers and is the sole electric utility in Puerto Rico.
PREPA was originally named the Puerto Rico Water Resources Authority (PRWRA). It was created to unify diverse regional and local electric power companies into one unified electric grid. Over the years, the budget for maintenance has diminished, and PREPA has suffered several outages that have left regions or the entire island of Puerto Rico without power.
In 2018, former governor of Puerto Rico, Ricardo Rossello, announced that all assets of the company would be sold in a general privatization of PREPA. However, PREPA is still publicly owned and responsible for electricity generation, power distribution, and power transmission on the island.
In 2020, PREPA and the Puerto Rico Public-Private Partnership Authority (P3 Authority) selected LUMA Energy, LLC to operate, maintain, and modernize the electricity transmission and distribution system of PREPA for fifteen years through a public-private partnership.
PREPA has been accused of hoarding materials and delaying the restoration of power during outages. However, it has also been predicted that generation would reach 95% by the following month and 100% of customers would be restored by June 2018.
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Publicly owned power utility
The Puerto Rico Electric Power Authority (PREPA) is a public corporation of the Government of Puerto Rico. It was created in 1941 as a water resource agency and later grew to encompass island electrification. PREPA owns and operates electric generation, transmission, and distribution facilities serving all of Puerto Rico. It provides electricity to approximately 1.5 million customers and is the sole electric utility in Puerto Rico.
In 2022, fossil fuel-fired power plants provided 93% of Puerto Rico's electricity generating capacity. 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.
On January 22, 2018, former governor of Puerto Rico, Ricardo Rossello, announced that all assets of the company will be sold in a general privatization of PREPA. The authority was ruled by a board of directors appointed by the governor with the advice and consent of the Senate.
In 2020, PREPA and the Puerto Rico Public-Private Partnership Authority ("P3 Authority") selected LUMA Energy, LLC to operate, maintain and modernize the electricity transmission and distribution system of PREPA for fifteen years through a public-private partnership.
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Privatization of PREPA
The Puerto Rico Electric Power Authority (PREPA) is a publicly owned power utility in Puerto Rico. It was founded in the 1920s as a water resource agency and later expanded its responsibilities to include island electrification. PREPA is responsible for electricity generation, power distribution, and power transmission on the island.
In 2018, former governor of Puerto Rico, Ricardo Rossello, announced the privatization of PREPA. The decision was made to sell all assets of the company in a general privatization. The authority was ruled by a board of directors appointed by the governor with the advice and consent of the Senate.
The privatization initiative was carried out by PREPA and the Puerto Rico Public-Private Partnership Authority (P3 Authority). They selected LUMA Energy, LLC to operate, maintain and modernize the electricity transmission and distribution system of PREPA for fifteen years through a public-private partnership.
The privatization of PREPA has been a controversial decision and has faced criticism from various stakeholders. Some argue that the privatization will lead to a loss of control over the country's critical infrastructure and jeopardize the reliability and affordability of electricity for Puerto Ricans. Others believe that the privatization will bring in much-needed investment and expertise to improve the efficiency and reliability of the electricity system.
The impact of the privatization on the local workforce is also a concern. The decision to privatize PREPA has raised questions about the future of the company's employees and the potential for job losses or changes in the terms of employment.
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Public-private partnership
The Puerto Rico Electric Power Authority (PREPA) is a public corporation of the Government of Puerto Rico. It was created in 1941 and is responsible for electricity generation, power distribution, and power transmission on the island. PREPA owns and operates electric generation, transmission and distribution facilities serving all of Puerto Rico. As the sole electric utility in Puerto Rico, PREPA provides electricity to approximately 1.5 million customers.
In 2018, former governor of Puerto Rico, Ricardo Rossello, announced that all assets of the company will be sold in a general privatization of PREPA. On June 22, 2020, PREPA and the Puerto Rico Public-Private Partnership Authority (“P3 Authority”) selected LUMA Energy, LLC to operate, maintain and modernize the electricity transmission and distribution system of PREPA for fifteen years through a public-private partnership.
The P3 Authority is a government agency that facilitates and oversees PPPs in Puerto Rico. It was created to encourage and support the development of PPPs in the public sector. The P3 Authority works to identify and evaluate potential PPP projects, and to negotiate and manage the agreements between the government and private partners.
The selection of LUMA Energy, LLC to operate, maintain and modernize the electricity transmission and distribution system of PREPA for fifteen years through a public-private partnership is an example of a PPP. This arrangement allows the private company to bring in new technologies, expertise, and resources to improve the efficiency and reliability of the electricity system.
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Frequently asked questions
The Puerto Rico Electric Power Authority (PREPA) is a public corporation of the Government of Puerto Rico.
PREPA owns and operates electric generation, transmission and distribution facilities serving all of Puerto Rico.
PREPA was created by Act 83 on May 2, 1941, during the governorship of Rexford G. Tugwell.
PREPA was originally named the Puerto Rico Water Resources Authority (PRWRA). It was founded in the 1920s as a water resource agency and its responsibilities grew over the years to encompass island electrification.