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.”
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.
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
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.
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.
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]
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.
@ur momisugly 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).
RICO huh?
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.
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.
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.
“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.