Green Puerto Rico "Not a Bailout" Rescue Package

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Hato Rey Milla de Oro. By Thief12/Carlo Giovannetti (talk) – I created this work entirely by myself. (Transferred from en.wikipedia to Commons by Thief12.), CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=17819845

Guest essay by Eric Worrall

Legislation is before the House of Representatives to rescue Green Energy Enthusiast Puerto Rico from a debt crisis, but the White House and the Speaker of the House of Representatives insist that the rescue package is in no sense a “bailout”.

The Obama administration is siding with Speaker Rep. Paul Ryan (R-WI)56% on how to properly identify the Puerto Rico rescue legislation currently under consideration by the House of Representatives.

Conservative House members drew Ryan’s ire after describing the legislation as a “bailout bill” for Puerto Rico, something that the Speaker’s office has worked to tamp down.

White House Press Secretary Josh Earnest called for Congress to pass bipartisan legislation to assist Puerto Rico, allowing them to restructure their debt. He also joined Ryan’s effort to denounce any attempt to brand the bill as a bailout.

“Just to be clear, because there does appear to be some misinformation that’s being spread about this, this is not a bailout,” he said during the White House press briefing. “I’ve said many times the administration doesn’t support a bailout of Puerto Rico. We don’t. We have never and we don’t now.”

Read more: http://www.breitbart.com/big-government/2016/04/15/white-house-sides-paul-ryan-puerto-rico-bill-not-bailout/

What went wrong? Part of the blame may lay with Puerto Rico Governor Luis Fortuño, who in 2010 embarked on a massive gamble, to reduce Puerto Rico’s dependence on fossil fuels, by embracing renewables.

From 2010;

Today, Puerto Rico’s Governor, Luis G. Fortuno, signed into law several measures that clearly define Puerto Rico’s public policy regarding renewable energy. The newly enacted Act for a Public Policy for Energy Diversification Through Sustainable and Alternative Renewable Energy (“Energy Diversification Act”) and Green Energy Incentives Act (“Incentives Act”) set specific renewable energy production goals and create economic incentives to facilitate the investments required to meet those goals.

“We need to aggressively encourage the development of renewable energy sources for the benefit of all that reside and work in Puerto Rico. Establishing the right public policy will be the anchor to make it happen,” said Governor Fortuno.

Firstly, the new law establishes public policy rules to increase and diversify energy generation by requiring the purchase and sale of sustainable and alternative renewable energy. Specifically, it gives way to a Renewable Portfolio Standard (“RPS”), which will require retail energy providers in the Island to produce or purchase a specified percentage of their electricity from renewable energy sources. These portfolio standards set a hard target of 15 percent renewable energy production by 2020 and require retail energy providers to prepare a plan to reach 20 percent renewable energy production by 2028.

Read more: http://www.prnewswire.com/news-releases/puerto-rico-aggressively-pursuing-renewable-energy-98932864.html

More information here: http://energy.gov/savings/puerto-rico-green-energy-fund

The renewables push attracted interest from American alternative energy businesses. But roll forward to 2015, and things in Puerto Rico, which derives a surprising amount of income from manufacturing, aren’t working out so well. Puerto Rico is still enthusiastic about green energy, but public debt is now described as a “crisis”.

Puerto Rico debt crisis: Is the island energy subsidiary to blame?

Puerto Rico is facing a financial crisis, and their energy situation may have a lot to do with it. Puerto Rico has had debt problems with the island’s energy subsidiary PREPA, from which it obtains imported petroleum for electricity.

Electricity rates on the island are around twice as high as those on the U.S. mainland, according to Bloomberg. This comes out to $0.24 to $0.25 cents per kilowatt-hour (kWh), while the average on the mainland is around $0.12 per kWh. According to the Energy Information Association (EIA), in 2013, 55 percent of Puerto Rico’s electricity came from petroleum, 28 percent from natural gas, 16 percent from coal, and 1 percent from renewable energy.

A year ago, Puerto Rico Governor Alejandro Garcia Padilla made a pledge to decrease the cost of energy in Puerto Rico. However, the fact that Puerto Rico is an island doesn’t mean renewable energy is harder to produce — in fact, it may be the opposite.

“Islands often face high energy costs due to their generally small size and remoteness, making renewable energy an attractive option,” according to the American Wind Energy Association (AWEA). “Several other Caribbean islands have committed to start replacing diesel generators with renewable sources. A small Spanish island, the most remote of the Canary Islands off the coast of Morocco, has neared its goal of 100 percent renewable electricity.”

Read more: http://www.smartgridnews.com/story/puerto-rico-debt-crisis-island-energy-subsidiary-blame/2015-07-06

My question – why are President Obama, and Republican House Speaker Paul Ryan, so keen to push through this measure (don’t say bailout) to rescue what may be developing into yet another green financial disaster?

If you think I am wrong, and are keen to invest in Puerto Rico’s glowing green energy future, this website is a good place to start.

http://businessinpuertorico.com/en/invest/industry-snapshots/renewable-energy

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I wonder how much Puerto Rico spent on renewables, if the actual yield from renewables is about one percent?

Santa Baby

“Affordable energy in ample quantities is the lifeblood of the industrial societies and a prerequisite for the economic development of the others.” — John P. Holdren, Science Adviser to President Obama. Published in Science 9 February 2001″
The problem here is that energy is no longer affordable.
It’s not possible to help people that don’t want to help themself?

Santa Baby

“Electricity rates on the island are around twice as high as those on the U.S. mainland, according to Bloomberg. This comes out to $0.24 to $0.25 cents per kilowatt-hour (kWh), while the average on the mainland is around $0.12 per kWh. According to the Energy Information Association (EIA), in 2013, 55 percent of Puerto Rico’s electricity came from petroleum, 28 percent from natural gas, 16 percent from coal, and 1 percent from renewable energy.”

Greg

“….and 1 percent from renewable energy.”
It is pretty obvious that if only 1% of their energy is from renewables it can not be the cause ( even a minor one ) of the current situation.
Doubtless that will not prevent this thread from being the usual anti-“windmill” rant session.

Tom Judd

That was in 2013.

Don K

> It is pretty obvious that if only 1% of their energy is from renewables it can not be the cause ( even a minor one ) of the current situation.
I’m not sure that logic is flawless. A massive investment that misfired completely COULD probably result in no money and no power.
But, I’m pretty sure that your conclusion is correct. A dubious energy policy doesn’t help things in PR, but it isn’t the cause of the Commonwealth’s problems

The story also does not tell us of demand vs these deliveries and what opportunities were rejected or not availed of due to this mischief. What a waste of petroleum is all I can say.

Also, if the renewables are set up as part of a mandate, it actually costs no money to the local government. It’s the ratepayers that take the hit, not the government. This is why mandates are so popular recently. Governments can take the credit for the renewables, without spending a dime on them, passing the bill directly to the consumers. Strange that leftist governments support them so much, given how regressive they are.

dickon66

“In 2015, 51% of Puerto Rico’s electricity came from petroleum, 31% from natural gas, 16% from coal, and 2% from renewable energy” – US EIA. Looks like the figures didn’t change a great deal over the years between 2013 and 2015, so what exactly is the problem? http://www.nytimes.com/2016/02/02/business/dealbook/puerto-rico-power-authoritys-debt-is-rooted-in-free-electricity.html?_r=0

Greg, I think the Puerto Rico plan is to replace reliable (but expensive) petroleum power with intermittent expensive wind power in a location that isn’t windy.
http://nawindpower.com/online/issues/NAW1402/FEAT_04_Pattern-Primes-Puerto-Rico-For-Utility-Scale-Wind.html

Michael Jankowski

So fraud, gov’t waste, and a low ROI in failed renewable/green energy couldn’t be “the cause (even a minor one)” just because renewable/green energy hasn’t successfully become a significant part of the energy use in PR? Interesting logic there.

Javert Chip

Greg
Kinda depends on how much that 1% actually costs…
If I have 99 $20,000 Hondas, the average cost of a car is $20,000.
If I add 1 $2,000,000 Ferrari (red please), the average cost jumps to $39,800.

Greg: Puerto Rico has committed $290, 000,000 for your windmills while raising the cost of electricity for manufacturers. Spending money you must borrow while destroying jobs and reducing taxable profits. Few care HOW they did such stupid things but many can see such decisions contributed to the $73billion debt.
The Government’s energy monopoly owed $400,000,000 for ONE debt service payment. Rate-payer money raised from the poor for more costly “renewable” energy. Destroying peoples’ dignity and dreams is immoral. Stop building windmills and installing photovoltaics with forced sell-back deals to the grid at multiples on the cost of coal fired boiler electricity.
Only real jobs allow hopes and dreams to be realized.

Chris Riley

IF the price of electricity were set by a market, the price would be equal to the marginal, not the average cost. The marginal cost is the cost of the most expensive source of supply. (which is without doubt the windmills) My guess is that if the government got out of the way, the supply of coal oil and gas produced power would increase, the price would fall and the windmills would wear out and eventually go away. The lower fuel price would cause an expansion of manufacturing.
Playing idiotic games with the price and supply of energy is an excellent way of preserving poverty, while pretending to protect the planet.

dickon66

Puerto Rico’s debt is around $72 Bn. and about $9 Bn. of that is estimated to be due to the energy sector. It is difficult to see how it could be solely due to Green energy policies. From what I’ve read, the government has promised more than it can deliver on its own – keeping costs and taxes at a low rate and promising to repay the debt simply to keep its voters happy in the short term.

Greg, if only 1% of their energy is coming from renewables, that tells you nothing about what percent of their infrastructure and maintenance costs are going into the renewables. If they have invested heavily into windmills or solar cells, taking out loans to purchase them, then a fair amount of money has to be dumped in, in the form of loan repayments. This is what is usually seen, where a political entity decides to get involved in something that should be driven by capitalism. Hence, that is why their energy costs are so high, because they are forcing the citizens to fund an overly costly form of energy creation.

I wonder how many diesel/ coal/ nat gas generators were shut down to force “renewable” onto the people in the first place after this edict in the first place?

Cain someone summarize – how much of a sellout was Ryan?

One possibility (no evidence whatsoever): Someone on the left, or at the WH, has relatively recently obtained “the goods” on Speaker Ryan and is now holding the evidence in escrow to make him toe the line. If he steps out of line, the scandal will hit the press. Cheatin’ on the ‘missus? Takin’ illegal donations for re-election campaigns? It’s hard to imagine a more abrupt change in political ideology without something behind the scenes going on.

RockyRoad

Ryan is just another Progressive–they don’t need “dirt” to persuade them; they think they know better than the average US Citizen what’s best for the country. In most cases, however, this means lining their own pockets with ill-gotten gain.
I’m glad Romney didn’t win or else we’d have just another evil politician as our vice president. Right now there’s no difference between a Marxist White House and a Republican House.

RR,
Your response is certainly in the realm of possibility as well. And there are others.
It is possible there is no one left in US politics who actually understands that pretty much everything this country has achieved in world economic dominance, enriching and uplifting of the entire spectrum of our populace, and in our present quality of life (where candidate Sanders followers can demand all the free stuff they want), is directly related to our origins and first 150 years of adherence to limited government, strong property rights and (relatively) free trade.

Boulder Skeptic,
Yes, and it was almost hilarious watching Sanders and Hillary try to out-compete each other in their bidding to confiscate the earned assets of the working class, and hand the money to the non-working in return for votes.
Each of them kept bidding up how much hard-bitten American taxpayers should pay to increase the dole. Pretty funny, coming on Tax Day.
Does anyone believe they’d be offering their own money for votes?
As if.

bit chilly

been a long time since america acquired a new state. looks like obama is getting jealous at the speed of eu expansion .
worth looking at which private individuals stand to lose out when puerto rico runs out of (other peoples) money.

Not a sellout. These are his principles. If you don’t like them, he has others.

Don K

As far as I can tell, no sellout and no bailout in this bill. What the bill seems to do is impose a financial control board to sort out Puerto Rico’s massive financial problems. It probably costs a few million bucks to staff a FCB, provide office space, etc. But nothing serious by Washington standards.
Why a financial control board? Because without one, the default(s) will be sorted out in the courts. It’ll take years — maybe decades — and enrich a lot of lawyers. The Commonwealth and most bond holders will both lose relative to an FCB.
What’s the issue? There are some bondholders (folks who own general obligation bonds for example) who may do better in the courts than with an FCB. And it’s not clear that an FCB can actually work. And some democrats are worried that an FCB will impose the sort of demented “solution” that the EU has imposed on Greece (unemployment has been around 25% for years thanks to EU “help”). Frankly, a lot of our politicians in both parties are dumber than dirt and probably have not the slightest idea what is going on. Others are crazed. And not a few are terminally corrupt. And it’s a really complex issue.

Ryan was about a 110% sellout.

TG

The bone heads strike again, let them flounder in their stupidity otherwise the lesson is somebody else will foot the bill!

Robert

They must think voters are stupid for not knowing the difference between a rescue payment and a bailout ,if it quacks like a duck !

“Bail Out” is another of those “irregular verbs” in English…
I “rescue”, you “help”, he / she /it “bails out”…

Louis

If you don’t bail out a sinking ship in some way or another, it will continue to sink. If the restructuring of debt does not result in lower payments, it will all be for naught. If it does lower the payments, it is a bail out. I do believe the Speaker is playing a game of semantics. It is the career politician’s favorite game.

Bert Walker

If the White House and Congress do this they should start setting aside money for Gov Brown’s California as well. Any economy based on sustainable and renewable energy will fail.

There is no evidence presented that alleged greenery is a major factor in PR’s troubles. PR has a $70 billion debt crisis. The Green Energy fund that you write about was capped at $20M per year in the early years. As you emphasise, only 1% is currently from renewables, and there isn’t any evidence that PR is actually burdened by a lot of construction there. Instead, the article you quote making that point is actually saying that PR could save money by investing more in renewables, because of the high cost there of alternatives.

Kaiser Derden

ah BS … coal is plenty cheap even in PR …

“ah BS … coal is plenty cheap even in PR “
Well, as quoted above:
“2013, 55 percent of Puerto Rico’s electricity came from petroleum, 28 percent from natural gas, 16 percent from coal, and 1 percent from renewable energy.”
Looks like using coal costs more than petroleum.

Looks like using coal costs more than petroleum.
Well Nick, since you claimed, and I use your words here, NO EXPERTISE in the matter in your comment below, how can you draw such a conclusion? You certainly can’t draw it from the statement itself since it provides no information whatsoever in regard to relative costs. Do you in fact have the expertise you just claimed you didn’t?

Just arithmetic. If they use 55% petroleum and 16% coal, there is presumably some reason for preferring petroleum. If not cost, what else?

Nick Stokes;
If not cost, what else?
Seriously? Are you being deliberately obtuse or just playing silly goose?
1. Unless the laws of physics have been suspended just in PR, petroleum is much higher cost than coal. So, have the laws of physics been suspended in PR, Nick? No? So perhaps we should go with “something else”?
2. This is a jurisdiction deeply in debt due to decades of bad decision making. Could that be the something else?
3. Petroleum is the easy short term decision. Faster to implement and low on capex. Coal plants take more time, and are higher on capex. All over the world, governments and corporations make short term decisions in favour of better long term decisions. All over the world “temporary” short term decisions become long term decisions because the better long term decision keeps getting put off for “one more year”. That’s frequently what defines the difference between a well run organization and a poorly run one over time. Could that be the something else?
etc?
You’re a pretty bright guy Nick. I think you were playing silly goose.

Don K

> Just arithmetic. If they use 55% petroleum and 16% coal, there is presumably some reason for preferring petroleum. If not cost, what else?
I’m not sure I’d buy that logic. Could be lots of reasons — financial inertia for example — for a given energy mix. California’s energy mix for example is distorted by their air pollution situation and the state’s 17 gazillion earthquake faults than make siting nuclear power plants REALLY difficult. But I think the basically, your conclusion is correct. unfortunately, the EIA sites I’d like to check are down for maintenance this morning. But here’s a 2014 Slate article that sort of discusses the issue. http://www.slate.com/articles/business/the_juice/2014/05/puerto_rico_is_burning_oil_to_generate_electricity_it_s_completely_insane.html
Quick take-away. PR (like Hawaii or Japan) has few or no hydrocarbon resources of its own. The existing infrastructure largely uses petroleum to generate power. LNG might be preferable, but handling LNG is a bit tricky and new ports, plants and transport facilities would be needed. And coal isn’t especially cheap when you need to cart it to a seaport, ship it 2500km by sea, unload it, and build new plants to burn it.

Small Island with a mix of power supplies, coal indeed is cheap but building the big efficient coal power plants costs mega. Thinking ahead spending all the mullah on green crap gives no return, spending on large scale coal plant would give this nation cheap power for the future. About time they also became either independent or a real state of yankee land.

Nick:
Cost is more than just raw fuel cost or capex. It is also cost to run a coal plant as a load follower vs Diesels that shift speed in seconds.
P.R. has no big grid. The island wakes up and goes to work, then at the end of the day goes home has dinner and turns out the lights. Coal tends to like hours and days to ramp up / down, not minutes… BUT, if you have a large grid, you can play one area change against another and avoid some of the load follow issues. With a dinky island sized grid, load following dominates the “issues”.
Now one can make coal gassification facilities and use that in a Gas Turbine, but that does take a chunk of money and while the turbine part load follows well, the gassifier not so much… and it costs a LOT of $$ that P.R. doesn’t have at the moment. The best Diesels run about 50% efficiency, the best gas turbines about 60%, so it isn’t a huge difference in efficiency in either case. (Standard coal is about 40% but the fuel is very cheap… capex not so much…) Using industrial sized Diesel Generators is a very reasonable choice for large industrial sites or small local economic zones, especially if natural gas is hard to get / ship or expensive.
I suspect that their small size of coal is just about their midnight to 6 A.M. load base…
So to decide fuel mix:
Step 1: Find the amount of load following needed.
Step 2: Build Coal or Nuke facilities for the residual base load.
Assure at least 10% AND one plant of redundancy.
Step 3: Use the cheapest load following plant and fuel for your local specifics. Gas or Diesel.
That can be CCGT IFF you have decent gas supplies fairly cheaply, or it can be Diesel for small operations. Note: Most individual backup generators for things like hospitals and malls are Diesel for a reason, and it isn’t just fuel cost. Reliable. Rapid start and stop. Good load following. Easy fuel delivery and storage. Those same issues apply to small islands…
Step 4: Do NOT, under any circumstances, build more non-dispatchable non-load follow capacity than you can absorb into the load following set of generation. Attempting to do will either result in excess energy being dumped for zero income, grid instability and crashing, or horrid performance and economics from your base load facilities up to and including physical damage. For most grids, that will top out at under 20%. Any more than that of combined wind and solar will crash things and break systems while having horrid economic effects causing “necessarily skyrocket” prices.
Remember that for islands, shipping and port costs can be dramatically higher than for anything on a continent and that fuel shipping over time will add a lot to the prices of hard to ship things, like gas, and favor things that can be shipped at room temperature in unpressurized holds like Diesel oil and Coal.
Oh, and remember that in P.R. they get hurricanes… your 20 year to 30 year payback needs to allow for being “Gone With The Wind!” on a regular basis…

I’m with Nick on this one. (yes, I am davidmhoffer, the real me is not lying in a dumpster somewhere). I find it difficult to believe that the amount of money spent subsidizing renewables is more than a drop in the bucket compared to their over all debt. I think this sort of blaming green policies for every financial crisis is akin to the alarmists blaming CO2 for.., well, everything else. Just counterproductive.
On the other hand… Nick’s point that given the high cost of alternatives, renewables might make sense for a small remote island. Well, apparently it doesn’t. If it made sense Nick, there would be no need for subsidy programs at all. Even in a market with twice the base price of the mainland, renewables can’t compete on their own.

“Nick’s point”
Not mine. It’s what the cited article says. I claim no expertise here.

Not mine. It’s what the cited article says. I claim no expertise here.
You made no reference to the article, you did not say you were quoting it in any way. The manner in which you presented it makes it yours, no reasonable reader would conclude otherwise.

I stand corrected. Upon reading your comment again, you did in fact cite the article.
You were still making a point though, regardless of how you got there.

Reality Observer

My body isn’t in a dumpster either… Have to agree with Nick here, too.
The real point though, is that wherever you see the Great Green Con Job going on – there is a huge amount of other corruption.
Look at it – the few billion that have been skimmed off by Gore, Mann, and Company are chump change compared to the trillion plus that this Administration has managed to steal with the other activities of its criminal syndicate.

The malinvestment has consequences and one should not make such easy assumptions about facts. There is no reason to excuse the green monster. He may not have solely contributed, but very likely he was a major contributor to this failure of governance. Higher usages in no way prove lower or lowest costs especially in a backwater such as PR. It has a state owned electric utility for goodness’s sake. Did they learn nothing from the Spanish? Even its former sibling the Philippines? Lame.
Look for the unseen though. Lack of reliable energy at low production costs results in higher prices. Higher prices strangle the customers’ production and settlement of invoices for costly power steers funds away from other purchases. Everyone is less well off. Lower tax receipts and state default follow. Plays out again and again. Nothing novel here at all, except for the Clintonesque word smithing by the Wisconsonite.

The gist of the article seems to be that Puerto Rico is developing renewables, therefore they are bad, therefore they do not deserve assistance. Some will eagerly embrace this view without a shred of skepticism and without asking about the consequences of not providing assistance.

Reality Observer

A small repeat – wherever you see the Great Green Con Job going on – there is a huge amount of other corruption.

JPL,
Read the rest of the thread below. This is not about “renewables”. This is about confiscating and transferring the wealth of those who earned it, to those who didn’t.

empiresentry

Doesn’t matter either way.
EPA and Obama ordered that Puerto Rico can no longer import coal or oil to burn for power or else face a $37,500 per day fine. (I know farmers who got daily EPA fines much higher than that because they did not put a sign on a small Anhydrous nurse tank.)
Puerto Rico got a one year extension so they could build the Aguirre terminal for LNG.
Apparently, EPA and Obama did not approve of LNG being shipped to the existing terminal in Fonseca
The Aguirre Terminal was supposed to open in 2017 but EPA internal arguments about coral reef locations required numerous design revisions…meanwhile the clock is ticking
Oh SNAP….suddenly EPA and Obama are concerned about sea turtles (I am sure they were there before) and stopped the Aguirre terminal.
Speaking from experience, a solar panel is not enough to run a refrigerator with vaccines…much less an operating room.
Solar panels or wind turbines also will not run a safe drinking water plan or sewer system.
And what will be used to run the hospitals and communications?
Blackouts are dangerous to your health.

joelobryan

EM Smith,
Venezuelan crude oil is heavy with sulfur. Venezuela is xports its crude around the Caribbean and Gulf to refineries that can handle this sludge.
PR would be better bringing in the new kerosene needed from US gulf coast refiners even with the Jones Act, than using Venny sludge that has to be heavily refined.

Depends on the cost to run the refinery vs cost of crude stocks. Much of the present US and Canadian “crude” is in fact made out of “heavier than sludge” tar sands and shales, and is only ‘light sweet” post upgrading. Venezuela has the same issues… For many years (decades?) Valero was a great money making stock as they had upgraded refineries to handle the (then) much cheaper Venzuelan heavy sour. Cheaper product cost, high product price, a nice win for them… Then others upgraded their crackers and the comparative advantage faded…
It is more about the cost of the feed stock than the refinery, once you have a refinery, and there are now lots of heavy sour capable refineries, even outside the USA…
But if Venezula bothers you, make it Brazil and PBR refined oil. Or Mexico and Pemex. Or…
Were I P.R., I’d be very tempted to lay a pipe to a neighbor island and buy oil from “them”, and let them handle all the sourcing and importing and all… Then they could chose oil from anywhere in the world shipped in any bottoms and simply say that P.R. was only importing from the neighbor and via pipeline…

Oddly, I find myself in agreement with Nick Stokes. I guess being tied inexorably to truth will do that to you sometime when someone else stumbles on truth too…
Puerto Rico has many financial problems. The tendency for expensive and politically driven energy systems is only one of them. IMHO, the major issues are:
1) Jones Act. ANYTHING coming in from the USA via ship MUST be shipped in US flagged vessels at high costs (i.e. US Union rates). This does not apply to other islands who can, for example, get oil from Texas shipped in non-US flag tankers..
2) US Federal Minimum Wage Law: Other islands are not so afflicted. IIRC, something like 1/2 of all jobs on the island are subject to Federal Minimum Wage. When you can be in the 50th Percentile of wealth via flipping burgers, there isn’t a lot of incentive to work hard to advance. When the island next door costs 1/2 as much per hour, it’s hard to attract businesses.
3) Government Featherbedding: Like most Latin nations, a “good job with the Government” pays a lot and you don’t need to do much (or even show up all that often). Frankly, this tends to accumulate in most any “progressive” Socialist oriented society (see Brazil lately, Venezuela anytime in decades, Bolivia, etc. etc. for way too many examples). Consequentially WAY too much of the Puerto Rican economy is “Government” and government jobs, and not so much of it is actually producing anything of value. The %Govt is way high. Don’t remember exactly what it was, but something between 1/3 and 1/2 IIRC.
Bottom line is the place is just crammed full of rules, regulations, and “make work not product” jobs; productivity not so much…
Then there was a change of tax treatment for investments in Puerto Rico that caused the influx of mainland money to fade…
End game is financial stagnation headed into collapse.
Does a “bail out” (er, pardon, “rescue…) help any of that?
Jone’s Act? No. US Minium Wage? Nope. Govt Feather bedding? No Way! Investment rules? Nada…
Can, meet foot. Kick! Way down road…
But while the electric grid is run by Government know nothings and doesn’t run well or cheaply, it is the least of the island’s worries…
FWIW, if using Diesel, a nice “rule of thumb” is that price in US ¢ / kW-hr is about the same as 1/10 of the price of Diesel/gallon in $. So with Diesel at about $2.00, electricity would be about 20 ¢ / kW-hr. To get electricity competitive with mainland rates ( dime or so) would need Diesel at $1/gallon. Not going to happen. To get costs down they would need to build a coal plant (preferably with coal shipped via non-Jone’s Act ships…) or a nuke plant. Natural gas is going to be expensive to liquify and ship (though might be worth it in a CCGT plant as they are approaching 60% efficiency… ) and with natural gas at about $1.60 per Gallon Of Gas equivalent that would be a big deal… but for the cost of Jone’s Act LNG tankers…
So personally, I’d go for a kerosene fueled gas turbine and order my oil from Venezuela via Latin tankers…
But that doesn’t fix stupid government leaning to Central Authority fixes over markets and it doesn’t fix apply US Mainland requirements on a Caribbean Context island.. AND it has little do do with “Green Energy” in any case…

benofhouston

I have to agree with Nick here. There’s nothing here but wild accusation .
The total appears to have been $20 million per year. A significant amount of funds, but not a major cause of this financial crisis.
http://energy.gov/savings/puerto-rico-green-energy-fund

Robert Westfall

The real problem is that Costa Rica is not allowed by law to file bankruptcy. They got very good terms on bonds because of the restriction. Now that Costa Rica has defaulted on some of its bond payments, the holders are lobbying congress for a bailout. This really is not about energy. It is all about social spending run wild with easy money. There have been a number a stories in the Wall Street Journal about the coming melt down of Costa Rica do to its free spending liberal government.
I say change the law. Let them go through a normal write down. The people that provided the easy money should have known better.

Gamecock

Sir, the topic is Puerto Rico.

Costa Rica? Amend or extend here?

Don

Paul Ryan is as useless as Obama.

Robert Westfall

Sorry it should be Puerto Rico.

StephanF

LOL, and I thought I was the only one confusing the two names ‘Costa Rica’ and ‘Puerto Rico’!

One is not rico. The other is not rica. Due to similar themes of mismanagement.

markl

This is not really a bailout. Say that enough times and it becomes true? Evidently so, just as with most AGW claims.

3¢worth

Rescue Package or a Bailout. Ryan makes it sound like it’s a Horse of a Different Colour when it is in fact a Horse of the Same Colour. Puerto Rico’s government, like many in the West, continues to foolishly rack up massive amounts of per capita debt using taxpayers’ money – this generations and the next.

Don’t worry. Paul Ryan has a plan to slow the US government’s reckless spending, starting in 2037.

commieBob

Puerto Rico‘s … attractive tax incentives make it a popular destination for visitors from around the world.

I read the taxation article trying to figure out why this was one of Puerto Rico’s attractive features. My brain threatened to explode but I still could not figure that out.

GTL

Resident individuals in PR are generally exempt from federal income tax.

commieBob

I wondered about that but they do have a local income tax.

… more Puerto Rico residents pay income taxes to the local taxation authority than if the IRS code were applied …

The local tax kicks in at a lower income.

commieBob

jamesbbkk says: April 16, 2016 at 4:21 am
Example

Act 22 – Individual Investors
* 100% tax exemption on all dividends and interest income
* 100% tax exemption on all capital gains
* 4% corporate tax rate

Okay … Tax havens are not likely to be a growth industry since the Panama Papers. POTUS and some congress critters are beginning to think tax avoidance might be a problem.

Capital should not be taxed. Ever. That is the problem worldwide. Great effort and technology work despite the skim and drain of ever increasing taxation based on the lefty OECD’s tax positions and stupid wars. You must explain Singapore and Hong Kong to claim PR is anything but gross state mismanagement causing wealth dissipation and finally flight. There is nothing wrong with people keeping their own stuff earned honestly secretly.

These incentives were offered after the government created inescapable debt dynamics.

Joe Crawford

commieBob,

POTUS and some congress critters are beginning to think tax avoidance might be a problem.

Tax avoidance isn’t ‘beginning to be’ a problem, it is already a problem here in the U.S. Ever since dear ol’ Lois Lerner, director of the Exempt Organizations Unit at the IRS started targeting conservative groups the underground (cash) economy has grown by leaps and bounds. They use to be able count on most people being nice and paying the taxes owed without trying to fudge the numbers, but after the scandal no one I know has any respect for the IRS and, like the über rich, will screw them any way they can.

Frederick Michael

Many folks think PR’s main problem is their high minimum wage, which is set equal to the US national minimum wage. Unfortunately, that’s much higher than all of PR’s neighbors. This make PR uncompetitive for tourism.
http://www.nationalreview.com/article/434003/minimum-wage-california-new-york-puerto-rico-future
Some have proposed a fix.
https://waragainstallpuertoricans.com/2016/04/15/minimum-wage-in-puerto-rico-will-be-lowered-to-4-25-per-hour/

jorgekafkazar

Let me get out my old Cryptocrat Translator and see what “not a bailout means.”
“Not a crook…not a war…not a bailout.” There it is. Meaning: bailout.
Nice try, Abou Ben Ryan.

joelobryan

This PR thing is a Janus. It has two faces.
One one face is a Commonwealth, with its own constitution, its own ability to promise generous pensions, encumber their taxpayers and future taxpayers with underfunded promises, and to ask the bond market to finance it all with tax receipts as the collateral.
One the other face is PR operating subordinate to the federal system under the US constitution, the Congress, the federal judiciary. But they have no Congressional voting reps, so no taxation without representation applies. But that doesn’t mean their hands aren’t out looking for free stuff from the feds. They get it in wheelbarrow loads.
Now the federal bankruptcy code is pretty clear. States and Commonwealths have their own constitutions and are thus sovereign entities. A federal bankruptcy judge cannot impose a judgement on a state to say, cut its budget by X amount here, or appropriate only this amount there.
The problem comes if you write a new chapter in the federal bankruptcy code for PR, it may be unconstitutional if it empowers a bankruptcy judge to impose mandates of spending cuts. On the other side, if the Commonwealt bankruptcy chapter only allows the judge to offer solutions, then if the solution doesn’t suit the Commonwealth politicians, they ignore it.
Because what PR desparately wants right now is to give the bondholders they promised full repayment to, BIG HAIRCUTS on the bonds, while preserving the pension promises made to their workforce.
This situation is very much like Greece. Where the greeks were able to spend, borrow, and promise far more than they could ever actually afford. They could do it because they were in the Euro system. They knew the northern European rich countries would bail them out.
PR is banking on a federal bankruptcy chapter that pretty much ensures a federal bankruptcy judge will only be able to impose Principle writedowns (hair cuts) on the bond holder, while being unable to force pension reforms and/or cuts to existing pensions.
This probably the bill that Ryan and the WH are working on.
The real issue is then down the road when PR wants to go back to the bond market for money. Will the jilted bond market just tell them to get lost. In that event, the Federal Reserve may be tasked under this bill to be the lender of last resort. If that is the case, the the Federal Reserve being ordered to buy PR bonds in a scenario of last resort lending would indeed put the US taxpayer on the hook for what is a bailout.

BINGO! You got it in one!!
Takers in Puerto Rico looking for someone else to pick up the tab for their promises…
Makers in the USA expected to pay for the Government Retirement Packages (either via haircuts on bond holders or via ‘bailout’ via lender of last resort).
(Sidebar: For anyone wondering if I am anti-hispanic or anti-Puerto Rican: Er, no. I grew up eating tacos and speaking Spanish about 1/3 the time and my grand child is part Puerto Rican… I love the Hispanic culture and people; and hope to retire to somewhere speaking Spanish as much as English.
https://chiefio.wordpress.com/2012/09/22/im-hispanic-who-knew/ It is only Government corruption I don’t like)

Mike Smith,
I hate it that anyone should feel the need to explain why they’re not “racist”.
I would honestly be hard pressed to find any officials in the U.S. to be more racist that the President and his Administration.
I’m tired of it. I prefer game theory: I will treat you like you treat me.
Or:
Treat me good, I’ll treat you better. Treat me bad, I’ll treat you worse.
If shoveling hard-earned money into the pockets of the takers, I’d be glad to have a discussion of how that’s “racist”.

E.M.Smith
On one of my trips long ago as sailor (engine room) visited Puerto Rico. In my impression it was one of the many Caribbean islands and only the point that it was using dollars and some US military in the fortress at the harbor was an indication that it was connected to the US.
Seems to me more a historical mistake to have it made part of the US than a real gain…

@DBStealy:
I’m not keen on it either, but since it has become SOP as a tactic by “The Left” to call anyone not supporting their Crony Socialism Du Jour or their Power Grab Now to shout at the top of their voice “Racist!!” or “Homophobe!!” or “Sexist!!” or whatever other slander they like at the moment: It is worth it to me to occasionally point that out via directly confronting the stupidity in it.
Wanting a sound and controlled border, for example, is NOT anti-Mexican. I want my Mexican friends to come in via the front door, not sneaking in the back door feeling like criminals. As long as they are illegal aliens, they are second class citizens (or not citizens at all…). Come in through the front door in the border and you are guests… Mi casa es su casa… rather than:: Mira! La Trucke Verde de INS!!
But I digress…
@Ferdinand:
Several times the people of P.R. have been asked “Do you want to stay or do you want to go?”. They have chosen stay. I’m not going to kick them out if they like it here. I do wish they would just go ahead and become a State. Since, at present, over 1/2 of California is Spanish / Hispanic of some sort and you are as likely to find speaking Spanish works as English in just about any retail operation, it isn’t like they would be alone in the Spanish State land… (or New Mexico, or Arizona, or Texas, or…)
Oh Well… they accept Federal Mandates that a State would avoid, but they dodge the Federal Income tax. Their choice, I’m out of it…
BTW, to see somewhere that doesn’t feel all that connected to the USA, just visit East L.A. in southern California or even East San Jose near Silicon Valley. To feel really in a foreign land, go to the Central Valley farm towns… Had the interesting experience ( I think it was in Gonzales? some little farm nowhere south of Salinas) of going into a hardware store to buy a light bulb. Asking the counter clerk a question got a halting English answer, so I swapped to Spanish and carried on… Her large brown eyes got even larger as she looked into my freckled white face and blue eyes and expressed a bit of surprise at my use of Spanish… I’ve been using it to some degree since about age 7? Maybe earlier… I grew up in a Central Valley farm town… Oh, and some border towns in Texas and / or New Mexico and / or Arizona are mostly Spanish speaking (and have been forever). One such town conducts all their official business in English, but the whole town speaks Spanish… They had a vote to cut over to Spanish for government operations, but I don’t know how it ended… Would be easier for everyone, though…
BTW, don’t forget about the various China Towns all over the USA (not just San Francisco…) and the Japan Towns (San Jose has one, but it is fading a bit) and the Danish town of Solvang and… There are lots of places in the USA that are not so homogenized as Iowa… (Heck, even Hill Country Texas has Texas-German as a distinct dialect…) and don’t get me started on Cajun… I can barely follow their flavor of French… but love the food and music 😉

@ E. M. Smith, 110: 03 am, “BTW, don’t forget about the various China Towns all over the USA (not just San Francisco…) and the Japan Towns ”
E.M. it is like that all over the world not just the US, I grew up up in Holland in the 50’s- 60’s and there were ” enclaves” in every town, especially harbor towns like Amsterdam/ Rotterdam and so on, I am sure that it is the same everywhere! Since moving to Canada even in small towns there were the “China Towns” and ” the “Italian/German” neighborhood and so on. We even had a dutch guy coming around selling dutch “goodies” as soon as he found out you were an immigrant!

The bond market always come back. If only it would do its job for once and not do that.

Javert Chip

Capital generally will be attracted by a higher (Puerto Rican) yield…especially if it’s subsidized by the USA. When the subsidy tide goes out, you experience the Warren Buffet moment of finding out who’s swimming naked.

Well, a bond buyer is supposed to assess whether he will be repaid by the issuer, not uncle sugar or the IMF or other mischief maker. It is the same phenomenon the serially defaulting Greek state discovered as a Euro participant selling higher yield to German and French banks who disregarded risk. The bankers are a menace.

Mike the Morlock

Okay so “who” are the bond holders? Who is Puerto Rico in hock to. So who gets the hair cut? The islanders? The investors?Anyone know how many Puerto Rico’s citizens live in the lower 48 and sent money home? The place is a mess. It is suppose to have some industry and tourism But if you are going to the Caribbean on vacation .. Puerto Rico? Why not just settle on Haiti? Defaulting may have consequences that are worst the carting them along provided fiscal reforms are made. “Yeah I know and then I wake up”
michael

Steve from Rockwood

The bond holders are:
1. United States mutual bond funds (20%)
2. US Hedge funds (15%)
3. Ma & Pa USA (65%)
Puerto Rico is a greater financial threat to America than Greece.

This is an idiotic article. Nick nails it.

From the end of the article:
A small Spanish island, the most remote of the Canary Islands off the coast of Morocco, has neared its goal of 100 percent renewable electricity
It is even economical: the investments (largely supplied by the EU) at El Hierro are paid back in less than 15 years only by less oil imports for power generation. They have the ideal geological formation to do that: an old volcano with the crater 700 above sea level which is used as pumped storage with surplus wind power and as hydro power when there is not enough wind. The combined wind / energy storage is enough to have a continuous supply for all power use, including desalination plants for drinking water. Wind force in general is quite high and rather constant (trade winds).
They are planning to extend the facilities to accommodate for 100% electric cars. so that they need zero oil imports in the future.
See Wiki: https://en.wikipedia.org/wiki/El_Hierro
For such remote islands renewables may be an outcome, if they have the ideal power storage: water.

The pumped storage in the old crater is 700 meter above sea level, which gives a lot of pressure and thus potential energy of the storage. They also have only 11,000 inhabitants + tourists, which makes the energy needs quite modest, compared to the near 4 million inhabitants of Puerto Rico…
Don’t know if Puerto Rico has such a possibility for pumped storage, as far as I remember, they have mountains in the middle of the island, but you need a very large basin / dams both at height and down with a rather steep gradient between the two to have sufficient power storage and pumping capacity.

martinbrumby

Unfortunately, recently El Hierro has needed to grab hold of some more diesel generators and a bail out.
Who’d have thought?

Don’t know of recent problems at El Hierro, as they still seems to be starting up with the new plant, it seems at around 50% of electricity use.
If it is economical? Only if you have the diesels already paid for I suppose. If you have to build the whole system from scratch, it is much too expensive, as you need 3-4 times the average demand in wind plate capacity + 100% of maximum demand in hydro if there is no wind + 100% of maximum demand in diesel backup if there is no wind for a prolonged time and the water reservoir gets empty…
I suppose that operating costs are lowest for hydro, higher for diesel and highest for wind.
Roger Andrews / Euan Mearns has a nice article about the real time production at El Hierro, up to August 1995:
http://euanmearns.com/el-hierro-revisited/

See:
http://dailycaller.com/2016/03/18/islands-trying-to-use-100-green-energy-failed-went-back-to-diesel/

Daily Caller News Foundation
Islands Trying To Use 100% Green Energy Failed, Went Back To Diesel
Andrew Follett
Energy and Environmental Reporter
6:50 PM 03/18/2016
The islands of Tasmania and El Hierro tried to power their economies with 100 percent green energy, but both islands eventually went back to diesel generators after suffering reliability problems and soaring energy costs.
These islands may be on opposite sides of the Earth, but they became poster children for environmentalists campaigning for countries to ditch fossil fuels. The fact remains that Tasmania and El Hierro saw their energy sectors become costly failures after going green, according to the free market Institute for Energy Research (IER) published Thursday.
“One of the biggest reasons that natural gas, oil, and coal are the world’s most-used energy resources is because they are incredibly reliable,” Daniel Simmons, vice president for policy at IER, told The Daily Caller News Foundation. “By the same token, wind struggles to compete with conventional fuels because it is inherently unreliable.”

So they can learn… after spending all the money and failing… But I’d not hold either Tasmania or The Canaries (El Hierro) up as good examples…

“The fact remains that Tasmania and El Hierro saw their energy sectors become costly failures after going green”,/i>
The mention of Tasmania is way off. They are referring to the hydro scheme, which is currently struggling for lack of rain. But it certainly wasn’t a green scheme. You can read about its history here. The main scheme was pretty much completed by the 1970’s. It was pushed through by pro-development politicians, and vigorously opposed by conservationists. You can read here the epic struggle about the Franklin dam.

Tasmania’s current problem is due to the failure of a single circuit undersea transmission line. It depleted storage selling marked up “green” power in anticipation of importing lower priced power during the dry season. Nice game if it works, but it did not. Drought is a ruse. It’s system was and remains unnecessarily fragile. Even excusing this gross failure due to drought is lame. These smart people are supposed to understand reality and plan for easily predictable conditions.

Ideal, except for the villagers from time to time washed away when there are releases during late season storms to prevent overtopping.

Don K

Apparently they may need another volcano or two in order to have enough pumped storage to meet their pumped storage needs at El Hierro. I believe producing those to be beyond the capabilities of current technology.
There’s an extensive analysis of the first few months of operation at El Hierro at http://euanmearns.com/el-hierro-renewable-energy-project-september-2015-performance-review/ Apparently the arrangement works, but is currently far from 100% renewable and also far from problem free (The wind failed to blow sufficiently strongly in Sept 2015). Unfortunately, that link doesn’t address costs.
My take: Oversold and probably expensive. But not stupid. And it’ll probably get cheaper over time as wind generation and pumped storage costs decrease a bit due to technology improvements. At some point — maybe decades from now — it really may be better costwise for remote, resource poor, islands to use renewables than imported hydrocarbons.
Note: They also desalinate water there. Offhand it seems like a desalination facility designed from the ground up to work with intermittent power might be a good load for wind and solar. (or not.)

Don K,
Thanks for the link to the update. If the Greens here refer again to El Hierro as 100% sustainable, I have a lot of ammunition to counter that claim…

Mark

Uugh Puerto Rico’s debt problems are the cause.
The country is insolvent. Their own governor called for Bankruptcy.
As such they do not have the money to sustain the Green nonsense.
Puerto Rico is being bailed out, not renewable. Smoke and mirrors.
Much of their debt is from importing fossil fuels, because Renewable was never gonna do it for them.
They were saved from complete insolvency in 2015 I think and have been stripping cash from anywhere they can (especially renewable funding) and any other cash they can get their hands on.
This is bailing out the country 100%

Steve from Rockwood

Puerto Rico has a greater problem than fossil fuels. It has the same problem as Detroit, a declining population, eroding tax base, greater reliance on government, too much borrowing and now it can’t pay its bills while the economy keeps shrinking.

Steve from Rockwood

Puerto Rico’s economy has been shrinking since 2006 (a 10 year recession), people are leaving in droves to mainland USA (shrinking tax base) and the government has been issuing tricky bonds to help pay for a heavily bloated government bureaucracy (by getting around compliance issues). Interest payments on the debt were 27% of government revenue in 2014. Due to the designation of Puerto Rico as a federal territory it cannot seek Chapter 9 bankruptcy protection like municipalities (think Detroit) can.
Puerto Rico can’t pay its bills, it can’t borrow any more money and it can’t go bankrupt.
Get used to these stories because a lot of US jurisdictions (municipal and otherwise) are heading in this direction. This is not considered a bailout because the debt will be restructured in a way that hurts current debt holders and allows the government to continue borrowing. Not sure where they will continue to find the suckers to lend them money – probably the US tax payer. And it’s not a bailout.

Marcus

..The most probable reason they are having financial difficulties is the fact that they have liberals in control !!
http://dailysignal.com/2016/04/15/puerto-ricos-liberal-mismanagement-should-not-be-rewarded-by-congress/

Mark

This individual thing is not a bailout, it’s part of the bailout that has been going on.
When all these bonds are issued for cash, the bond holders must stop the bonds becoming worthless by giving more $$, this is exactly why Greece was not allowed to default by EU banks, even though their democratic process voted to not accept their deal

They should just cancel the debt on the current bonds without payment and issue new bonds.
While we’re at it we should give PR their independence not statehood…Cut the cord.
They could form a Socialist triad with Cuba and Venezuela then elect The Bern as their prez.

Resourceguy

Detroitonomics with palm trees

Chris

Out of $73B in debt, $9B is for the electric utility, or 12%. Most of that debt is due to corruption and fraud relating to oil purchases, supposed upgrades of the power plants to meet clean air standards.
http://www.nytimes.com/2016/02/16/business/dealbook/at-puerto-ricos-power-company-a-recipe-for-toxic-air-and-debt.html?_r=0
The money spent on renewable is a small fraction of that. So saying “part of this” is due to green policies is only true if by part of this you mean less than 2%.

This is focusing only on what is seen and not what is unseen. You may defend or excuse these coerced wind and solar programs all you wish, but there will be catastropic failures. The search for the guilty will surely follow, and I for one am looking forward to those that precipitated the failures telling us that they saved us from some effects of them.

Chris

No, that is incorrect. The title of this article attempts to link PR’s financial calamities to their green policies. That link is weak at best. That’s it, end of story. Mixing in other future possible failures of RE projects has nothing to do with PR’s current financial state.

Or, the calamity is unfolding and those with blinders will focus narrowly or obfuscate to direct attention elsewhere.

Every dollar spent on high cost intermittent or stopgap generation is a dollar not spent on lowest cost reliable generation. The impacts of doing this can be major and far reaching. The premise that this was not a proximate and direct cause of Puerto Rico’s downward slide has not been established.

Kevin Daugherty

Another “Green” bailout.  California public employee unions have been losing money by divesting from firearm, tobacco, and fossil fuel companies and investing in “Green” companies.  They call it “a Noble way to lose money”.  I disagree with the divestments, but would respect their decision if it was actually their money.  I believe California is contractually obligated to pay the promised pensions even if the money is not in the pension funds.  That means they will be raising everyones taxes for their bad investments made for sociopolitical instead of financial reasons.

Bruce Cobb

Say that a family is poor, and struggling financially. The parents decide to go all-in on lotteries, hoping to strike it rich. When that doesn’t happen, they are worse off than before, in fact, now they are homeless. They made a bad decision, pushing them over the edge financially. And that is exactly what PR did. Furthermore, they knew that their favorite uncle, Uncle Sam would be there to pick up the pieces if they failed. Switching to “green” or “renewable” energy is economy-killing in more than one way.

John F. Hultquist

From the material presented:
A small Spanish island, the most remote of the Canary Islands off the coast of Morocco, has neared its goal of 100 percent renewable electricity.
That would be the Island of Hierro where wind turbines and pumped storage are used. The larger storage unit is at
(Google Earth, Lat/Long): 27.795121, -17.923227
Those are for the upper reservoir.
Reports can be found on Euan Mearns blog (Energy Matters), here:
http://euanmearns.com/?s=Hierro
Published results show the scheme is significantly under performing.” [April 2]
His conclusion is that the upper reservoir has fallen out of use, … [March 24]

David

I just visited Puerto Rico. The locals say the problem is that New York City has one mayor for 9 million and PR has 78 mayors for 3 million. The Mayors get to hire an assistant Mayor and has a city council. Everybody get over 80k in salary plus kickbacks from corrupt contracting.
The Control Board that Paul Ryan is proposing worked in Washington DC and can work in PR. The Democrats are trying to weaken the powers of the Board. If they succeed there will be a bailout. There recently was a four hour shutdown of a local hospital because it hadn’t paid its electricity bill in months.

@ David, 12:10 PM, You hit the nail on the head, pure and simple. But as far as I can tell it doesn’t seem much different anywhere in any government in any country. The bureaucracy (un-elected and eternal) runs the show and reap the un-checked benefits ( Lois Lerner and Kolinen are the prime examples, arrogant and protected by rules they themselves put into place).

Gary Pearse

RICO huh?

Steve in SC

Yes it is a bailout.
They would be in the same trouble if green energy scams were not in vogue.
The corrupt liberals have been in charge of Puerto Rico for 75 + years.
Since we have vacated Roosevelt Roads and quit attacking Vieques there revenue stream has diminished.

Kalifornia Kook

If it were a bailout, I would think PR would be all for it. Instead, this bill sets up a control board that works through PR’s debts and liabilities. PR doesn’t want to lose that control, and is calling the bill an example of colonialist power.
I hate bailouts, and I hope Wisconsin wises up and dumps Ryan, but this bill isn’t the worst thing I’ve seen. Ignore the press – look at the contents of the bill, and you’ll see why PR doesn’t want it. Doesn’t mean that the new board, hand-picked by our leftist President, won’t screw them and us with their decisions. But PR is too dumb to understand they can’t support all the local government they’ve bought. They don’t know how – and don’t seem to want – to reduce it. They also don’t seem to understand what the results of bankruptcy will be to their future ability to borrow money. If we don’t try to help them with adult guidance, they’re liable to become a New Haiti – still under our flag.
They need to have this power taken away until they learn to act responsibly. Else, do us all a favor, and cut ’em loose, keeping as payment those islands our navy uses as targets.
As someone said above, I wouldn’t mind if the Fed set up a similar board to reign in Moonbeam. I’ve got to move out of this state. He and his band of idiots in the state congress are destroying us.

Dave Kelly

Curiously no one mentions that a major problem with P.R. utility sector is electricity theft… a side-effect of P.R.’s early adoption of “smart meters”. The meters were easily hacked resulting in a substantial drop in revenue. According to the FBI, the average bill of a hacked P.R. meter dropped by 50 percent to 75 percent. By 2010 the losses were estimated to be $400 million. There’s no telling what the current losses are.
So rather reducing electricity prices by catching the thieves and enforcing the law, the P.R.’s commonwealth
government is forcing the utilities to buy back solar power? What are the odds the meters monitoring the “purchased” solar power are going to be hack in the other direction? The level of corruption in P.R. on this issue alone is likely to drive up P.R.’s cost of electricity.

getitright

“White House Press Secretary Josh Earnest ”
How can one determine if he is Josh[ing] or issuing “ernest” comments?

That is the official government narrative, isn’t it? Believable? Not really. Tim Geithner as head of the NY Fed and “regulator” blocked a private AIG discounted workout, instead requiring 100 cents on the dollar to counterparties. Worse, assets stayed in weak hands. All bank losses would have been a couple quarters’ net income. All decent price signals have been destroyed by state created central banking cartels and the state and non-state debt binges they have enabled. Central banks continue to engage in unhinged experimental monetary activites. Savers have been brutalized for almost ten years.
Automaking was under no threat of discontnuing in the US. Insolvency is a signal that what you doing is not desired. Suppressing that signal does not eliminate the underlying condition. GM made no fundamental changes. GM will fail again, soon.