$17B Modernization Plan for Puerto Rico's Grid | Hacker News Reader

$17B Modernization Plan for Puerto Rico's Grid

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102 pointssohkamyung70 comments

This all sounds very optimistic. The reality is that there isn't a certain way for the current electrical power authority to obtain this kind of capital and/or assets to execute this kind of plan.

Puerto Rico's government debt was in crisis before the hurricane hit: outstanding bond debt of $70 billion ($12,000 per capita); very high poverty rate; and 10+% unemployment.

Maybe they could try to become a new Hong Kong in the Caribbean Sea. Rule of law, deregulation, free markets even for power production and distribution. Tourism is a small part of their economy, and never a solid, prosperous plan.

Don't know why you're being downvoted. This has worked well in Singapore as well. PR already moving in that direction too: if you claim full-time residency or incorporate there (183 days/yr), US citizens can avoid paying lots of different types of taxes [1]

https://www.the2022actsociety.org/index.php/tax-incentives

Yes, whenever someone suggests prosperity via free markets and free minds here their comments are downvoted.

If PR could become a new Singapore or Hong Kong we would all benefit.

Right, so if there is substantially less tax burden why don't we see rapid development and prosperity?

Read up on the Jones Act for example: https://www.vox.com/policy-and-politics/2017/9/27/16373484/j...

All shipping to PR has to happen via US companies on ships built in the US crewed with US citizens, increasing the price of any good shipped there (basically everything)

Unsuprisingly, not having to pay taxes only offsets that to a certain point for people with somewhat normal incomes. And having rich people move there is of limited value if you basically waive all or most direct taxes.

All shipping between US destinations - not all shipping.

Yes, true, the effect is the same. A ship from overseas passes by PR with goods for the island. It harbors there. It continues to the mainland, now it’s in violation of the jones act since it’s transporting goods between US ports. What are the huge cargo freighters going to do? Unload everything at PR? No. They’ll pass and unload at the mainland.

Minor nitpick: they are not technically in violation of the act unless they actually onload cargo in PR, i.e. they could just offload at PR and continue on to mainland. The end result is the same though as merely offloading is not efficient so the ships always go to the mainland instead.

When i visited there last year, and talked to residents, it appears there is a lot of corruption that goes on, which seems to do more harm than good to their economy.

Crime

Nobody wants to get started there because theyll get kidnapped and murdered

Thats the perception anyway

That's not really the culture of Puerto Rico.

Say it like it really is

They have almost no say in what laws and regulations apply there - the US federal govt decides. It's part of the reason why they're in this mess.

It's not at all accurate, that they have almost no say in their own laws and regulations.

They set the majority of their own tax laws for one example (including sales and income taxes), and don't pay federal income taxes. They do pay into Social Security and Medicare, the benefits of which they can claim back later.

They set the majority of all criminal laws for themselves.

They have their own constitution.

They're free to set all sorts of laws how they see fit, so far as it doesn't contradict, for example, the US Bill of Rights. Their ability to set laws is greater than that of the 50 states, meaning they have a wide field to work with.

Considering their sovereign debt situation I can't imagine the debt markets will be receptive either.

PR won’t be able to finance the majority of repairs, it’s just not realistic. The US Govt, including FEMA, will have to help Americans rebuild. Otherwise, PR will be de facto depopulated by migration to the US and elsewhere.

Isn't is possible to raise money for Infrastructure-specific projects, which would be paid back by with revenues raised from selling power? I don't understand why its not a good investment: all people need power, they need to buy it somewhere right? If they had a clause which said revenues from the customers would be first used to pay back the specific debt... is that possible?

It is a good investment until due to mismanagement they don't make enough revenue to pay up. PREPA is already in default on their bonds so I don't see how they can convince anyone to lend them even more money. The previous bondholders probably have dibs on the income stream already.

I think you are describing a Public Private Partnership.

http://ppp.worldbank.org/public-private-partnership/overview...

It's $17bn over the 10 year projected lifetime of the implementation. So "only" $1.7bn a year (roughly, the projected yearly costs ramp up until 2025, then drop a bit). That's easily do-able through federal assistance funding. Nutrition Assistance For Puerto Rico already gives $1.5bn of federal money every year, for example: https://en.wikipedia.org/wiki/Nutrition_Assistance_for_Puert...

Given PREPA’s history and turmoil, it’s questionable how efficiently they would use any amount of money. It’s not an argument for a for-profit monopoly, but for well-managed, capital-efficient, accountable service provider that doesn’t extort customers.

Tesla? No different then PPA rooftop offerings. Also sidesteps bondholder claims if you go straight to customers.

Tesla doesn’t have relevant expertise or local knowledge to deploy a complete energy grid suitable for PR. Plus, they would create a profit-centric monopoly that would end up squeezing poor people. Instead, a non-profit or state-run monopoly that is run well, unlike PREPA is a required precondition. PR can’t sustain competitors due to its tiny size, so they need an “Amtrak” for most services.

It would be nice to deploy solar, wind and distributed battery storage along with cleaner power generation, but it doesn’t have to be Tesla. Costa Rica’s generation-side has some good clean energy deployments that might make useful templates.

I don't know where you're from, but the overwhelming majority of the USA gets its power from regulated private companies which have a monopoly on distribution. Your first paragraph makes it seem like you're unaware of this.

Can’t be state sponsored, due to bondholder claims on territory revenue streams.

Decades of poor governance decisions by the people of PR coming home to roost.

Seems expensive, especially since they are impressively already using flexbox which works nicely enough! http://www2.pr.gov/prgoven/pages/default.aspx

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