Wednesday, August 31, 2011

A Rude Awakening

Our electricity bill arrived the other day, and my eyes nearly popped out of its sockets when I saw how much we owed. Adding insult to injury, we had received the bill just after having lost power for three days due to Irene. Those of us who live in Puerto Rico have always had to spend much more on our electric bills than our counterparts on the mainland. According to the U.S Energy Information Administration, the average retail price of electricity per kilowatt in the U.S is $0.11 cents back in February of this year. On the island, the average cost per kilowatt for households this past June was $0.28. If Puerto Rico was a state, it would have the second most expensive electric costs. The most expensive is Hawaii, at $0.31.

As a blog reader once pointed out to me, those of us who pay our electric bills (at unsubsidized prices) are subsidizing those who aren't. In fact, some churches, hotels, public housing projects (aka caserios) and municipalities can keep their lights on 24 hours a day, as they practically get electricity for free (and some in fact do). Another reason why electricity is so expensive in Puerto Rico is because many people steal electricity (not to mention water as well). This has led to an estimated $700 million loss between 2009 and 2010. The fact that 70% of the island's energy comes from petroleum exacerbates the problem. The situation has gotten so dire that some restaurants are directly passing the high energy prices on to its customers, listed as the "AEE Adjustment" on their bills.

During the past few weeks, la Autoridad de Energía Eléctrica (the Puerto Rico Power Authority), a government corporation, has come under fire in its billing tactics. The AEE uses a formula which weighs heavily current oil market prices. Jeniffer González, President of the island's House of Representatives, has promised to implement significant changes as to how the AEE charges its customers. High energy costs is a serious impediment to the island's economy, as consumers have less money to spend on other household goods. In addition, for businesses, it increases operating costs to a much more dramatic level. Meanwhile, the Fortuño administration is placing its bets on the Via Verde gas pipeline to help alleviate the island's skyrocketing energy prices.

Sunday, August 21, 2011

Waiting for Irene

In the eve of tropical storm Irene's impending arrival, parking lots at most supermarkets on the island have been jam-packed with cars and shopping carts that have been left behind as soon as stores opened today. In fact, people were able to shop earlier than 11AM (the time when most stores on the island are legally allowed to open on Sundays) since Secretary of State Kenneth McClintock had suspended the Closing Law and ordered a price freeze on items of utmost necessity. The National Hurricane Center initially billed Irene as a tropical storm advisory but has since issued a hurricane warning for Puerto Rico. This evening, the entire island of Vieques is already said to have lost electricity. As the island's power grid and water pipelines are quite antiquated, it doesn't take much rain or wind to provoke a disruption of such basic services.

The lack of confidence on the government's part to confront any sort of natural disaster is precisely the reason why people clear out supermarket shelves, even when Puerto Rico isn't in the storm or hurricane's direct path. This afternoon, at a press conference, Gov. Fortuño announced that 13,000 homes are already without electricity. In addition, 400 homes are without water. Keep in mind that this occurred hours before Irene's arrival. The governor has also announced that all local government agencies and public schools will be closed tomorrow. He also took the same measures several weeks ago, when Emily passed by the island and most of the island emerged unscathed. In fact, some people in the metro San Juan area enjoyed the time off at the beach. Unlike Emily though, which (thankfully) did not wreak much havoc, Puerto Rico is in Irene's direct path.

(Photo credit: The image above was obtained from