SAN JUAN – Puerto Rico Gov. Ricardo Rossello announced on Monday the sale of shares of the state-run Electric Power Authority (AEE), the company that is mired in billions of dollars in debt and has been much criticized by consumers for its high prices and deficient service.
Rossello addressed the country to say that the move will benefit all sectors of society and will be a point of departure for the island’s economic development.
He emphasized that the privatization of AEE will put an end to “the obsolete electric system” that currently exists and be a decisive step toward modernizing the island’s infrastructure.
The governor also said that the move is designed to transform the electric grid throughout the US Commonwealth, meaning that AEE will cease to exist as it has to date.
The plan had been previously announced and means that in the coming days the process will commence for selling shares in AEE to companies that will transform the power generation system into a “modern and efficient” one, and also one that is less costly.
The process, which is slated to take about 18 months, will be divided into three phases, an initial one to define the legal framework and open bidding to companies interested in participating in AEE’s transformation.
The second phase will consist of receiving bids from the companies and evaluating them technically, economically and financially.
The final phase will be reserved for negotiating the terms of the transformation and hiring the companies selected to assist in that task, provided that they comply with the established requirements.
Rossello said that the plan will be a model for the privatization of energy generation and will provide a fixed-term concession for the distribution and transmission of electricity on the island.
He said that one of the big obstacles to Puerto Rico’s development opportunities has been the island’s deficient and “obsolete” system of power generation, noting that the island has a system that is 28 years older than the US average and is dependent on oil, which is becoming more and more costly, more polluting and less efficient.
Rossello also said that maintaining the electricity infrastructure was practically abandoned over the past decade, although electricity demand fell by 18 percent in Puerto Rico and dropped off by 48 percent in the industrial sector during that period.
He said that revamping the power system will enable Puerto Rico to attract new industries and businesses to the island, and that will create jobs.