Puerto Rico Utility Endures New Crisis in Leadership
After a management crisis in early July, operations at the Puerto Rico Electric Power Authority have settled down following the appointment of electrical engineer José F. Ortiz as the utility’s new executive director and chief operating officer. But as the utility works to complete restoration to the final 450 households without power from Hurricane Maria, there is skepticism about the ability of the government-run utility to rebuild the territory’s electrical grid.
On July 11, Walter Higgins, a utility veteran named in March to take over PREPA, resigned over problems with his $450,000 annual compensation. The PREPA board named former General Electric executive Rafael Diaz Granados to replace Higgins and granted him a salary of $750,000.
When Puerto Rico Gov. Ricardo Rosselló demanded that Diaz Granados take a lower salary, Diaz Granados and four of six board members resigned. Rosselló appointed two new board members and on July 18 appointed former PREPA board chairman Ortiz as CEO of the utility at a salary of $250,000.
The leadership crisis at the utility raised eyebrows in Washington, D.C. The House Natural Resources Committee scheduled a July 25 hearing on the problems. “There is … great concern over the historical mismanagement of [PREPA] and whether political influence over PREPA will continue to hinder the utility’s transformation into a privatized and resilient electrical system,” committee Chairman Rob Bishop (R-Utah), wrote to Rosselló, inviting him to appear before the committee.
While some questioned Ortiz’s appointment, pointing to his previous stint on the board, others, including members of the Puerto Rico chapter of the Associated General Contractors of America, said they fully supported the choice. “We know him well; he is an honest and educated professional,” says Steve Spears, president of the AGC Chapter.
Separately, however, Spears said the territory’s contractors were disappointed that they were bypassed for the task of rebuilding the island’s power grid in favor of stateside firms. A Puerto Rico-based, Fluor-led contingent with local contractors was disqualified from bidding.
Referencing the work it did to restore power for the Corps of Engineers, Fluor spokesman Brett Turner says, “Fluor believes the company provided the best value proposal to the People of Puerto Rico and PREPA that maximized the reinvestment of contract funds into the local economy and exceeded the procurement requirement.”
PREPA selected Foreman Electrical Services of Texas, Cobra Acquisitions of Oklahoma, and MasTec of Florida to complete the $2-billion rebuilding job.
Other efforts are moving forward in Puerto Rico, including a request for proposal from the Puerto Rico Industrial Development Corp. to build five industrial microgrids.
“The progress on all fronts continues to be painfully slow but it is progress nonetheless,” Spears says. “We will rebuild a better Puerto Rico, it is just going to take a lot longer than we would like.”