Energy experts have long recommended that federal funds be used to create a more resilient grid that relies less on costly imported fossil fuels. That’s not just because of environmental concerns but also because of a simple mechanical problem: Electricity from fossil fuels needs to be generated at centralized power plants, a job that falls on PREPA as it still handles electricity generation. Most of the plants are in the south, meaning electrons need to be carried up via transmission lines over the mountainous center of the country to population centers in the north. Queremos Sol (We Want Sun), a platform for clean energy development and climate justice backed by a number of environmental and community groups and unions across the island, has pushed for a more decentralized and renewable grid that can be turned back on even when the grid endures massive damage. So far that hasn’t happened, even after the 2019 passage of a green energy law intended to bring more clean energy onto the grid.
Understanding why these expert-backed, popular reforms haven’t been enacted requires a longer view. Officially a territory, Puerto Rico is best understood as a colony of the United States, having been ceded to the U.S. by Spain as a result of the Spanish-American War in 1898. Like other colonies it has also long been a place for policymakers and business interests to test out new schemes. After a series of generous tax breaks for businesses expired in 2006, the island entered a prolonged depression that was compounded shortly thereafter by the global financial crisis. Successive governments borrowed money to stay afloat and fund basic services, eventually racking up more than $70 billion in debt. Exactly how that debt was acquired is still the subject of some controversy; critics have accused banks of engineering ways to exceed borrowing limits, charging steep underwriting fees. Among the biggest bondholders are distressed asset investors, or “vulture funds” that swoop in to buy up so-called trouble assets on the cheap in the hopes of extracting big payouts down the line through scorched-earth legal battles. Some of the same funds that have bought Puerto Rican debt have also bought up polluting fossil fuel assets across the globe that bigger companies have been eager to shed to appear more climate friendly.
Unlike companies or U.S. states that have trouble servicing their debts, Puerto Rico can’t formally declare bankruptcy. So the Fiscal Oversight and Management Board—known as “La Junta”—was imposed by Congress and the Obama administration in 2016 to oversee the debt restructuring process and the island’s finances, executing effective veto power over plans made by its democratically elected government. The legislation that created the board, known as PROMESA, doesn’t require most of its members to be from or living in Puerto Rico. Its chair is one of the intellectual architects of the board, law professor David Skeel Jr., who has consistently argued that indebted governments are better off having democracy taken away from them.