> From: Carmelo Ruiz <carmelo_ruiz at yahoo.com>
>
> PRIVATISATION NOT THE ANSWER TO ENERGY WOES, ACTIVISTS
> SAY
>
> Carmelo Ruiz-Marrero
>
> (Puerto Rico, January 2, 2000) The administration of
> governor Pedro Rosselló promised that privatisation
> would usher in a new era of efficiency and prosperity.
> However, his efforts to privatise the energy sector
> are having negative economic and environmental
> impacts, local activists claim.
>
> The Puerto Rico Electric Power Authority (PREPA) has
> signed contracts with the Allied Energy Systems (AES)
> and Ecoeléctrica corporations for the construction of
> two privately owned power plants.
>
> The U.S.-based AES began last month the construction
> of a coal-powered plant in the southern coast town of
> Guayama. The facility is expected to generate around
> 450 megawatts of electricity.
>
> Its construction was delayed for years by
> environmental groups that went to court to try to stop
> the project. They argued that the plant will have an
> adverse impact on public health, and that coal burning
> is a significant contributor to global warming. They
> also claimed that AES’s environmental impact statement
> for the project was deficient, inaccurate and
> dishonest.
>
> However, the P.R. Supreme Court decided last year to
> allow the plant’s construction to proceed.
>
> In 1995 the environmental lobby group, Greenpeace
> published a report on AES, which details numerous
> cases of environmental destruction and dishonest
> business conduct on the part of the company.
>
> The other private power plant, built by Ecoeléctrica,
> runs on natural gas. Ecoeléctrica is a joint venture
> of the Kennetech and Enron corporations. Its
> construction finished last month and is expected to
> start providing power to PREPA about 500 megawatts
> early this year.
>
> Enron also has a long history of scandals and alleged
> corruption. This Texas-based corporation has been
> accused of influence- peddling and other improprieties
> in business deals in countries like Argentina,
> Mozambique and Kuwait.
>
> In a much-contested multi billion dollar power plant
> deal in Dabhol, India, Enron was repeatedly accused of
> corruption and foul play.
>
> Last month, PREPA’s customers saw a sharp increase in
> their bills. Some suspect this increase is due to
> privatisation.
>
> According to a March 29 1999 report of the Standard &
> Poors financial consulting firm, PREPA’s operating
> costs and debt obligations will increase 42% in the
> next four years.
>
> PREPA’s annual report for the fiscal year (FY) 1997-98
> states that the cost of its purchases of energy will
> increase from $145.3 million in the current FY to
> $459.2 in the 2001-2002 FY. This increase of $314
> million in only two years amounts to a quadruplication
> of costs.
>
> The PREPA report for FY 1998-1999 has not been made
> public, despite the efforts of the P.R. Association of
> Electric Energy Consumers to obtain a copy of it.
>
> This group is currently suing PREPA, claiming that in
> its rate hike, utility company is not following due
> process or giving the public the opportunity to
> participate in the process, as the law requires.
>
> The Association, formed in 1999, advocates egalitarian
> electricity tariffs, as well as energy conservation
> measures and the development of renewable energy
> sources.
>
> “PREPA is an unaccountable monopoly with extreme
> powers”, said Association spokesman Héctor Arana.
>
> “When the Cogentrix corporation wanted to build a
> coal-powered power plant here in 1992, the PREPA
> people told us that if it wasn’t built there would be
> blackouts all over Puerto Rico.”
>
> “But back then, PREPA was operating at 58% of its
> capacity, when utility companies all over the world
> generally run at 85 to 90% of their capacity”, said
> Arana, who has been collecting and examining PREPA
> documents for 20 years.
>
> Arana does not believe that privatisation is the
> answer to Puerto Rico’s energy woes. “We don’t need
> new power plants. You can’t just add hundreds of
> megawatts all at once. The tariffs will keep on
> rising, and people will consume less electricity. Our
> utility company is committing financial suicide.”
>
> PREPA has become a government within the government,
> claims Juan Rosario, spokesman of Misión Industrial, a
> local environmental group. “PREPA representatives told
> us in 1992 that the smoke that comes out of their
> thermoelectric plants is water vapour, that they were
> obeying environmental laws, and that it was one of the
> best-run utilities.”
>
> However, years later the utility admitted that it was
> not water vapour, but sulfur oxide. When Misión
> Industrial and community grassroots groups persuaded
> the U.S. Environmental Protection Agency (EPA) to
> investigate PREPA, it found literally thousands of
> violations of environmental laws. The local EPA office
> also declared that PREPA is one of the most polluting
> and inefficient utilities within the EPA’s
> jurisdiction.
>
> “The people who really control PREPA are the
> bondholders”, declared Rosario. “The utility has
> signed contracts with bondholders, and these contracts
> prevent it from being run sustainably.”
>
> For Rosario, what is needed is not privatisation, but
> democratic accountability. “PREPA needs restructuring,
> and the bondholders’ control over it must end.”
>
>
> Ruiz-Marrero is a Puerto Rican journalist and a
> Research Associate at the Institute for Social Ecology
> in the United States.