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Power Player

Powering Puerto Rico back to life, with PRIDE

Rebuilding the island's hurricane-destroyed electricity grid is an unparalleled opportunity, if only we move past rebuilding-as-usual.

Not another one! When will they stop?

I could and should be talking about this year's four (and counting) devastating hurricanes: Harvey; Irma; Jose; and Maria. But, in fact, my exasperation is with the overabundance of articles in the trade press, and even the general business news, explaining how the destroyed electricity systems around the Caribbean, and Puerto Rico in particular, should be rebuilt on a more distributed, renewables-driven basis.

It is not that I don't agree with this point-of-view — of course, I do. I am one of many people in our industry who for years have looked covetously at Hawaii and Puerto Rico as the places where a comprehensive clean energy system will have its first break-out — its "day in the sun," so to speak.

If you are reading this article on GreenBiz, I am sure you agree with me as well, and that it is intuitive to you, as it is to me, that this is the only logical outcome for Puerto Rico now that its antiquated storm-vulnerable electric grid has been torn down.

Replacing the current wrecked grid with a more decentralized, solar-driven network of microgrids, we can all agree, would be cheaper and quicker to build, with significantly less opportunity for financial waste through corruption. Done right, the result would be a system with much lower operating cost and a more democratic and equitable outcome for Puerto Rico's hard-pressed end-use energy consumers.

A more decentralized, solar-driven network of microgrids would be cheaper and quicker to build, with significantly less opportunity for financial waste through corruption.
Lest I forget, it also will improve local air quality, provide sound and smell abatement against all the generators currently on the island and, to the extent we can forge this clean energy system into a new business paradigm, will represent a major step forward in the fight against global warming.

Not shabby.

Yet, notwithstanding all those positive qualities of the alternative outcome, it won't happen if we don't get outside the green echo chamber in which all of us exist to persuade someone who matters that we have a better plan.

Even as we speak, the forces of the energy status quo in the Caribbean are ordering up as many utility poles as they can scoop up stateside, as they hurtle down the path to rebuilding the exact same storm-exposed, imported-fuel-dependent grid systems that existed before the storms. Grids that Thomas Edison would have recognized as "state-of-the-art" — in 1917.

Being heard with our alternative energy plan in this case, as in most cases, begins with money or, more precisely, committed capital. That leads us to PREPA — the Puerto Rico Electric Power Authority.

Because American citizens are suffering on Puerto Rico, and will be suffering for as long as they lack ready access to reliable electricity, let's be blunt with each other: As long as PREPA is in charge of electricity delivery on Puerto Rico, there will be no alternative energy plan. PREPA simply will seek to rebuild its 20th-century system.

Puerto Ricans, on average, earn less than half the median American income and spend more than twice as much on energy.
But is PREPA in a position even to do that? It is saddled with something like $10 billion in debt already, and the Puerto Rican government, with massive debt issues of its own, is in no position to underwrite PREPA. PREPA's debt represents about $7,000 for each PREPA customer and there is no possibility, in its existing dire economic situation, that the energy consumers of Puerto Rico can bear that debt burden.

No, PREPA, and its debts, need to be set aside and replaced by a privately capitalized power company charged with creating an alternative type of power system for Puerto Rico — much like New York State a few years back responded to the overwhelming debt burden of Long Island Lighting Company (LILCO) by replacing it with LIPA. Except, in Puerto Rico's case, the idea would be to shift the mandate to supply power on Puerto Rico from a public authority to a freshly capitalized private company rather than vice versa, as it was in New York.

This "Newco" would, in my mind, be green but not "purely" green. Surely, in the towns and rural areas of Puerto Rico, it would fulfill the distributed solar-driven microgrid vision we all share. But in the densely populated San Juan area, the focus would be on a hardened urban grid-based system fueled by small-scale liquid natural gas or compressed natural gas. Let's face it, we all want to be pure green. But even before you get to the issue of the diurnal intermittency of solar energy, you have the issue that solar requires horizontal space, perhaps to an extent not accessible in San Juan itself.

Even with natural gas energizing the capital, this alternative, hybrid system would be a heck of a lot cleaner than the fuel oil and coal-fired plants that historically has dominated the Puerto Rican generation mix. This new hybrid system would be much cheaper to build and vastly cheaper to operate, but the fundamental question remains — which Yann Brandt has asked repeatedly in his Solar Wake-Up commentary — who pays? Our alternative energy system may be diametrically opposite to the traditional PREPA system in many ways but they share one key trait in common: They both rely on a paying customer base to stay solvent.

It won't happen if we don't get outside the green echo chamber in which all of us exist to persuade someone who matters that we have a better plan.
There is a simple truism in the poverty NGO world: "It's expensive being poor." Puerto Rico bears that out: Puerto Ricans, on average, earn less than half the median American income and spend more than twice as much on energy. At more than $400 a month, energy spending represents about 25 percent of average household income. Given that America writ large has tripped into economic recession every time total energy costs approach 7 percent of total disposable income, it is not hard to see the contribution onerous energy costs have made to Puerto Rico's continued economic distress.

So "ability to pay" is most important and it provides the most compelling reason for my last major tweak to our alternative energy plan. As American consumers, in general, spend roughly two-thirds of their entire energy spend on transportation fuel, we need to access the vast potential operating savings available to Puerto Ricans by shifting their transportation reliance from gasoline-powered vehicles to electric while also capturing the attendant environmental benefits, locally and globally, of no tailpipe emissions. On a macro debt-servicing level, gaining access to a healthy portion of the $3 billion-a-year Puerto Rico currently spends on importing fossil fuels should give Puerto Rico's creditors ample incentive to support a new alternative energy plan.

Newco, accordingly, must be given the mandate to create an island-wide smart EV charging network as part of the adjacent electric system serving homes and businesses. The suboptimal dual energy delivery systems that exist pretty much everywhere — gasoline into cars, electricity into buildings — need to be integrated by that one smart extension cord that will enable vehicle-to-grid as well as grid-to-vehicle charging.

Puerto Rico can become the first to achieve one mutually reinforcing, fossil fuel-light, fully integrated energy system.

Perhaps the Newco, which attempts to achieve all of this, should be called the Puerto Rico Integrated Dual Energy Company — PRIDE, for short.

So who amongst us wants to step up and capitalize PRIDE?

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