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Oil addiction fueling Puerto Rico power crisis

Friday, August 15, 2014 - 02:34

Reuters correspondent Luciana Lopez explains how the Puerto Rico Electric Power Authority's reliance on crude oil is contributing to its debt crisis, and how some businesses are turning to renewable energy to control costs.

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Permit us economy has struggled for a number of years and there are a number of factors that come into play there. High energy prices -- player rule. I want to -- Rico because the island's electric utility. Is potentially on the verge of restructuring it's debt which would be an historical occasion for Puerto Rico. This could literally happened within days in right now the investment community as far more questions than answers about what can happen. That's what is the Puerto Rico electric power authority they're essentially monopoly. And really where -- are you gonna go Puerto Rica is an island aspect. They transmit -- they'll -- -- all the bill -- so they are really the energy utility. -- debt load is unsustainable. They've actually been borrowing to pay for operating -- it's not just capital expenditures but the single biggest problem is the -- dependency on the hill. In 2012 about 65%. Of -- as electricity came from oil that's compared to about 1% from the mainland United States. Who knows where oil prices -- Annika. It's very hard to run a corporation and you don't know what your expenses are going to be month month if there is -- restructuring some people I talked reporter good side. That could actually be increasing these -- and that would further squeezing residents and businesses. That told me they're already stretching it paid there electric bills month to month -- that is. Manufacturing for example is very energy intensive and you have to pay these high -- every month. Think it's a little bit harder to turn a profit. You know alternatively there's some other businesses out there and history taking matters into their hands so for example McCarty in Puerto -- Actually uses a considerable amount of alternative energy at their site. They used biogas and they use Windmills to provide more than half of their energy needs so biscuit and have a certain measure of independence. More and more businesses are looking at doing these kinds of things just to safeguard their own operations. And make sure that they can control their own costs. A lot of people have talked about the possibility of using natural -- course. You know Alan G has been a big thing on the namely the United States and it's helped contribute to manufacturing Renaissance here. There is one place in the south have gone back to -- That uses natural gas they need to look to sources that are as volatile aren't as costly as well. They've got to look to the long term otherwise they're just gonna be stuck on a treadmill -- this sort of problem happens every few years.

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Oil addiction fueling Puerto Rico power crisis

Friday, August 15, 2014 - 02:34