The Opportunity of a Generation for Puerto Rico
If Puerto Rico truly wishes to straighten the course of its economy, it is imperative to design a modern industrial policy that puts us at the forefront of global economic activity.
CNE – Centro Para Una Nueva Economía – Center for a New Economy
Non-profit, economic research and policy development organization
If Puerto Rico truly wishes to straighten the course of its economy, it is imperative to design a modern industrial policy that puts us at the forefront of global economic activity.
The performance of Puerto Ricoā€™s electric power system has been deficient for many years now. During the last seven years the government of Puerto Rico has undertaken massive efforts to transform the system. Yet during the summer of 2024, most of these efforts appear to have been derailed.
To better understand how Puerto Rican households are faring financially, a topic last comprehensively studied in the 2007ā€“08 Puerto Rico Survey of Consumer Finances, the 2021 National Financial Capability Study surveyed 1,001 adults in Puerto Rico. The findings show that while debt levels are relatively low, many in Puerto Rico struggle to make ends meet.
We reviewed a summary of the main findings of the PR100 Study in a prior policy brief. This time around we want to focus on a handful of issues that we believe merit further public discussion and analysis in Puerto Rico.
On February 7, representatives of the U.S. Department of Energy presented a summary of the findings of the PR100 Study. While the PR100 Final Report will not be released until late March, in this policy brief we highlight some of the findings of the PR100 Summary due to their importance and their potential policy implications for Puerto Ricoā€™s electricity sector.
In this Policy Brief, we will present an analysis of the principal components of the Generation Operation and Maintenance Agreement, including the basic structure of the transaction; the compensation of the Operator; the estimated savings to be generated as a result of hiring a private operator to operate and maintain the Legacy Generation Assets; the planned decommission of most of the existing facilities that currently use fossil fuels to generate electricity in Puerto Rico; and the resulting structure of Puerto Ricoā€™s electricity market.
This Policy Brief focuses on the lack of effective coordination among the relevant stakeholders in the recovery process, set forth principles to guide the process, present policy priorities for both the emergency response to Fiona and the ongoing reconstruction related to MarĆa, and suggest a mechanism for effective coordination among and between all the relevant parties.
CNE already published an extensive analysis of the operation and maintenance agreement, back on August 2020. Our objective with this new analysis is to provide a succinct evaluation of the situation today, analyze the options available to the government of Puerto Rico, and hopefully clarify some of the confusion surrounding the operation of this public-private partnership agreement.