Living with Risk Daily Briefing – April 6

Published on April 6, 2020 / Leer en español

Center for a New Economy

Edited by
Sergio M. Marxuach


Five things you should know today

1) How is COVID-19 impacting Puerto Rico’s energy transformation process?

Analysis by Malu Blázquez Arsuaga, Executive Director of ReImagina Puerto Rico, a CNE initiative that works to achieve a coordinated post-disaster reconstruction process.

Just before Puerto Rico started facing the COVID-19 pandemic, we were immersed in the middle of various processes related to the transformation of our energy system:

  • the evaluation by the Puerto Rico Energy Board (PREB) of a new Integrated Resource Plan (IRP) prepared by the Puerto Rico Electric Power Authority (PREPA);
  • the restructuring of PREPA’s debt as well as the updating of its Fiscal Plan by the Financial Oversight and Management Board (FOMB); and
  • privatization efforts led by the Public-Private Partnerships Authority (P3).

The PREB was expecting interveners to submit all final legal briefs by March 20, 2020 so they could complete their evaluation process and make a determination on the final IRP that must guide the investments needed to transform our energy infrastructure system. Due to the Governor’s Executive Order OE-2020-029, this deadline has been extended by the PREB to April 12, and it could be postponed further.

On the energy generation side, the early 2020 earthquakes caused significant structural damage to the Costa Sur power plant and decreased PREPA’s generation capacity by 820 MW.  In order to address this situation, PREPA initiated an RFP process, which so far has remained confidential, for Temporary Emergency Generation to supply 500 MW to cover capacity shortages expected during the summer months, when demand was estimated (prior to the pandemic) to peak at 2,418 MW.

The good news for consumers is that in March 2020 petroleum prices had decreased by more than 50% on a year-on-year basis.  Lower fuel costs should translate into lower power bills for consumers.  According to Mr. Jose Ortiz, these lower fuel costs are expected to be reflected in our PREPA invoices from July-September 2020 by reducing current rate of $0.22 KW/hour to $0.17 KW/hour.

Read Malu’s full analysis

2) Ten weeks to “crush”–not bend–the curve

Dr. Harvey Fineberg, an expert on emerging infectious diseases, published an editorial in the prestigious New England Journal of Medicine outlining a ten-week strategy to “crush, not bend” curve. Among the recommendations outlined by Dr. Fineberg are:

  • establishing a unified command;
  • testing millions of people;
  • supplying healthcare workers and hospitals with personal protective equipment and ventilators;
  • differentiating the population into five different groups and treating them accordingly; and
  • inspiring the public.

Unfortunately, federal and some state authorities are far behind in the implementation of such a comprehensive strategy.

3) COVID-19 reveals hidden social vulnerabilities

A recent editorial from the Financial Times caught our attention for its call to rethink the whole Thatcher/Reagan limited-government paradigm. According to the editors of the FT, not precisely a publication identified with the far left, the COVID-19 pandemic has revealed some deep fault lines in the social contract that need to be addressed in the near future. Among their suggestions we find the following:

“Radical reforms — reversing the prevailing policy direction of the last four decades — will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure. Redistribution will again be on the agenda; the privileges of the elderly and wealthy in question. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix.”

Food for thought from one of the world’s most prestigious business publications. And a view echoed by Justin Cassidy, who writes in The New Yorker that “just like in wartime, people are frightened, public attitudes are changing, and the circumstances are necessitating a big expansion of the government’s role.”

4) Pandemics have a way of changing history

A lot of good writing has been published recently about what happens the “day after” the pandemic—specifically, about how social, economic, and political interactions may change once the pandemic is over. Some analysts believe the current situation is analogous to a really bad snowstorm and most people will quickly return to their pre-pandemic lifestyle. Others, taking a longer-term historical approach, think otherwise: this is a transformative event that will leave deep scars in the body politic.

Yet understanding how the post-pandemic world may play out is a difficult task fraught with analytical traps. This is the position of Elizabeth Kolbert, who writes in The New Yorker, that: “Just as there are many ways for microbes to infect a body, there are many ways for epidemics to play out in the body politic.” Others, like Peter Baker, writing in The Guardian, are a little more certain in warning us that: “Times of upheaval are always times of radical change.” It is still too early to know how this will play out, but precisely because of that, now is the right time to start thinking about it.

5) Update on the development of serological testing from Johns Hopkins

Scientists at the Center for Health Security at the Bloomberg School of Public Health at Johns Hopkins University have published an update on the development of serology-based tests for COVID-19. While this information may be a little more technical than what we usually publish, we thought it important to share it with you. As the researchers at Johns Hopkins tell us:

“Serology testing for SARS-CoV-2 is at increased demand in order to better quantify the number of cases of COVID-19, including those that may be asymptomatic or have recovered. Serology tests are blood-based tests that can be used to identify whether people have been exposed to a particular pathogen by looking at their immune response. In contrast, the RT-PCR tests currently being used globally to diagnose cases of COVID-19 can only indicate the presence of viral material during infection and will not indicate if a person was infected and subsequently recovered.”

The availability of these tests will be particularly important to determine when we can safely lift the shelter-in-place restrictions and reactivate the economy. The ability to differentiate between people who have been exposed and developed antibodies and those that have not, will allow public health authorities to determine who can safely return to work and who may need additional protection. Also, these tests could play an important role in developing therapeutics for the treatment of COVID-19.

Quote of the Day

“The past is never dead. It’s not even past.”

—William Faulkner

Note from the editor

Recently I saw Eddie S. Glaude, professor at Princeton, give an interview about the social costs of the epidemic. To my surprise he highlighted the psychological toll of missing or postponing key life events: weddings, baptisms, commencement ceremonies, funerals, among others. These events, personal public rituals really, provide meaning and structure to our lives by marking important milestones in our social and personal development. The necessity to suspend or postpone them, or the inability to celebrate them with persons important to us, could leave deep psychological scars.

Maybe because I lost my parents during the past two years, it has been particularly heartbreaking to read stories of “virtual funerals,” with no family or friends present, other than through FaceTime. I cannot even begin to imagine the pain and sorrow, much less how people can start the mourning process with nothing else than a virtual funeral to hold on to. After all, as Roger Cohen wrote recently in the New York Times, the pandemic has made the past “more present” for all of us, as we realize we have little emotional support but for our connections “to one another and to generations past and future.”

This is the end of today’s briefing.
Stay safe and well informed!