Wall Street Investors Advocate Higher Electricity Charges for Puerto Ricans

Nearly six years after Hurricane María devastated Puerto Rico’s electrical grid and caused a prolonged blackout, Raquel Maria Gonzalez Sparks continues to experience frequent power outages. Many residents believe that the outages have worsened since a private company took control of the power system. These outages have severely impacted Gonzalez’s life, making it difficult for her to work as a contractor and causing a 25% decline in her income. The power surges have also resulted in the destruction of her electronics and appliances. Additionally, the lack of streetlights and security cameras during blackouts has led to an increase in theft. The constant outages have negatively affected the entire neighborhood, leading to traffic jams and increased air pollution from diesel generators. As a result, Gonzalez’s health and the health of her elderly mother are at risk. Despite these challenges, Puerto Ricans pay significantly higher electricity rates compared to the national average, with businesses paying even higher rates. The new utility LUMA has repeatedly raised prices to cover the costs of grid reconstruction. Now, a federal court must decide whether Puerto Ricans should be burdened with additional costs to pay off the debt owed by the state-owned power authority. Many organizations across various sectors have united against this debt-restructuring proposal, fearing that it will weaken the already struggling economy and result in further closures, job losses, and migration. The debt crisis began in the late 1990s when a federal tax break for manufacturers in Puerto Rico was revoked, leading to factory closures and increased borrowing by the government. The Puerto Rico Electric Power Authority, in particular, accumulated significant debt to cover fuel costs for its outdated power plants. Bondholders sold their debt to high-risk investors, who now seek full repayment through lawsuits. Puerto Rico’s debt, combined with unfunded pension obligations, reached $120 billion. In 2016, Congress established the fiscal control board under the PROMESA Act to address the territory’s economic situation. Hurricane María further worsened the crisis, and the board became a focal point of political activism, with critics viewing it as a symbol of U.S. colonialism. The opposition to the rate hike transcends political affiliations, as people from various ideological backgrounds unite against the proposed increase.

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