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Corporations are Privatizing Power in Puerto Rico as Trump Administration Relief Aid Continues to Stumble

A toxic combination of incompetency, greed and vulnerability after Hurricane Maria make the island ripe for a dangerous move toward privatization of major utilities.

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Feb 12 2018, 4:00pm

Defense.gov

More than four months since Hurricane María made landfall on Puerto Rico, power and water are yet to be fully restored across the island. And so — to the despair of many— corporations seeing a lucrative business opportunity have been called to step in.

On January 22, Puerto Rico Governor Ricardo Rosselló announced that he planned to "privatize” the Puerto Rico Electric Power Authority. "The Puerto Rico Electric Power Authority (PREPA) does not work and cannot continue to operate like this," Rosselló said in a televised address. "With that PREPA, we cannot face the risks of living in an area of high vulnerability to catastrophic events.”

The decision to privatize Puerto Rico’s state-owned power company is ringing alarm bells. Because Puerto Rico is no stranger to the failures of privatization, and for years has been dealing with economic turmoil and corruption

In the 1990s, as water services struggled with quality and finance issue, then-governor Pedro Rosselló (Ricardo Rosselló’s father) declared a state of emergency and reached out to the private water operator. French multinational Veolia and then Ondeo, a subsidiary of French multinational Suez, then took it in turn to cash in but the water system, both its infrastructure and its finances, were left, decades later, in an even worse shape than during the crisis that had encouraged Rosselló's privatization efforts.

"We must finally begin to put people before profit in response to this crisis, and rebuild Puerto Rico’s food, water and energy systems in a sustainable way to better withstand future disasters."

Today, electrical workers’ union are arguing that PREPA is being set up to fail — purposely— so that it could be privatized again.

In fact, the electric utility was pushed into the spotlight in October 2017 over its response to Hurricane María, and its decision to give a $300 million contract to Whitefish Energy, a small company based in Whitefish, Montana that is a hometown of the Trump administration’s Interior Secretary Ryan Zinke. Whitefish Energy charged Puerto Rico more than double the regular wages for utility crew line workers and higher-than-normal daily meal rates. Whitefish also found it difficult to get equipment to the island, which led the Puerto Rican government to hire costly charter flights, according to investigations led by the Washington Post. The executive director of PREPA, Ricardo Ramos Rodriguez, ended up resigning in the wake of the controversy.


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The decision also alarmingly follows the same path mapped out in the Trump administration’s draft infrastructure plan in which no funding is allocated to the State Revolving Fund programs, the main source of federal support for our local water and sewer systems.

VICE Impact spoke to Jackie Filson from the Food and Water Watch, a grassroots corporate accountability organization, about their concerns for how Puerto Rico’s move towards privatization of water and power is not ideal for sustainable long term recovery -- not to mention bad news for the Puerto Rican people.

VICE Impact: Why is water and power at risk of being privatized in Puerto Rico?

Jackie Filson: Right now, the Trump administration has still failed to provide the support needed to restore water to 7 percent of Puerto Rican residents and power to the nearly one in three residents going without. The decision to privatize Puerto Rico’s state-owned power company follows the same dangerous path mapped out in the Trump administration’s draft infrastructure plan that ends in unaffordable water.

"We have a moral obligation as a nation to protect all of our people in disasters, and in Puerto Rico, we’re failing."

What does the plan to privatize Puerto Rico’s water and power potentially mean for vulnerable communities?

By privatizing Puerto Rico’s water, the Trump administration is subjecting Puerto Ricans to the whims of private utilities which, according to a Food & Water Watch study, have historically charged households in the United States more than local governments charge for drinking water. Food & Water Watch did a survey of 500 municipal water systems – the largest survey of its kind – and found that public utilities charge an average of $315.56 per year for a typical household. Private water utilities averaged $500.96 – an increase of 59 percent. That’s an extra $185 each year for the same amount of water. Whether it’s water or energy, privatization helps Wall Street at the expense of the wellbeing and health of communities, particularly low-income families and people of color.

What is a better solution?

We must finally begin to put people before profit in response to this crisis, and rebuild Puerto Rico’s food, water and energy systems in a sustainable way to better withstand future disasters. Each time funding for public water systems is slashed, cities are forced to make decisions about how to get the funding they need. The federal government should continue to provide funding for water infrastructure so that everyone can have access to locally managed, safe and clean drinking water.

How can we help make this happen?

Sign this petition to ask your lawmakers to support access to safe and locally managed drinking water for all!

We must also help Puerto Rico rebuild its electricity system so that it takes advantage of its abundant renewable resources, and no longer relies on imported oil. This is the future, and this is the only way we will build resilience into our energy system and avert the worst climate chaos ahead by moving off of fossil fuels. Legislation introduced by Rep. Tulsi Gabbard, the Off Fossil Fuels for a Better Future Act, requires that 80 percent of our electricity be powered by renewable energy in the next 10 years, and 100 percent by 2035, which would help us accomplish this goal of a just and swift transition nationwide.

We have a moral obligation as a nation to protect all of our people in disasters, and in Puerto Rico, we’re failing. But it’s not too late to change course. We the people must stand up and demand an equitable and just humanitarian response, and the federal funding to help Puerto Rico rebuild sustainably.

This interview has been edited for clarity and brevity.