Puerto Rico Update: Roads, Power, Water, and Money

By Lambert Strether of Corrente.

In this post I’ll review what I can of the situation in Puerto Rico on the ground, and sketch the first outlines of the role of the Financial Oversight and Management Board (FOMB) set up under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) (“never let a crisis go to waste”). I’ll go into the financial aspects of Puerto Rico’s post-Maria situation in a follow-up post later this week. Today, I’ll look at roads, power, water, and depopulation. Then I’ll take a quick look at money, which affects the power situation, in both senses of that word. But first, I’ll note that that military involvement is winding down. NPR:

There are about 11 thousand troops on the island now—down from more than 15 thousand shortly after the hurricane. Over the next few weeks, the number will drop by about half as federal troops hand over responsibilities to National Guardsmen.

And the general in charge of those efforts is leaving. CBS:

Lt. Gen. Jeffrey Buchanan, the Pentagon’s liaison to the Federal Emergency Management Agency (FEMA), announced on Friday that troops would begin winding down operations… He is set to leave the island next week.

“On the military side, we’re really here just for the emergency response,” Buchanan told CBS News correspondent David Begnaud in a wide-ranging interview Saturday. “We’ve been transitioning out of the emergency response for the last several weeks. Some areas still need help, but it’s more of a sustained effort, and moving, transitioning into a longer recovery and rebuilding effort.”

So let’s look at those “some areas” that still need help. (Here’s a vivid and excellent description of a typical day in the life of a USGS hydrologic technician. “Every aspect of living and working there has been thrown into turmoil.”) First, the roads.

Roads

Wnen we looked at the road situation back in October, the only road in full operation was the ring road around the island; nothing in the interior. Since then, the roads seem to have been cleared:

Buchanan said the initial response involved search and rescue operations, opening ports around Puerto Rico and clearing roads. Until the roads were cleared, helicopters were required to transport supplies. He said all roads have now been cleared, so FEMA and local officials are able to deliver supplies much more easily without the assistance of the military.

I don’t have a map of the cleared roads, but I do have this map from National Nurses United, who sent down some of their members to aid in the recovery:

Most of the aid was delivered to the interior, so that suggests Buchanan is correct, and that the roads are indeed cleared, and many are passable (assuming that the nurses weren’t flown in by helicopter). But cleared roads aren’t the same as repaired roads; as this audio report on National Guard efforts shows, and passable roads aren’t necessarily suited for the delivery of food, fuel, and supplies of all kinds, including telephone poles and electrical equipment. Reuters describes a mammoth sinkhole:

The hole is only one of 3,500 reported incidents of hurricane damage to Puerto Rico-owned roadways, with repair costs estimated at $250 million.

Cars backed up for miles along Puerto Rico Highway 2 on either side of the colossal construction site, which swallowed four of five lanes. The 20-foot crater was among thousands of sites damaged by a storm that exposed an already fragile infrastructure in Puerto Rico, decimating water, power and roadways all at once.

(Given that whoover is counting the incidents faces a task much like that of the USGS hydrologic technicians above, it’s likely that 3,500 is a low estimate.)

Electrical Power

To begin with, we’ve decided to stop counting people who don’t have power. Bloomberg:

The U.S. Energy Department, which has been issuing regular reports on the efforts to restore power in Puerto Rico, just stopped releasing estimates on the number of customers who’ve gone without electricity since Hurricane Maria devastated the island more than a month ago.

In explaining the change to its biweekly report Thursday, the agency said Puerto Rico’s utility hasn’t been able to give estimates on actual customers without power. It is instead estimating the amount of electricity restored as a percent of the island’s peak load. That figure isn’t ‘a direct proxy for the number of customers restored’ because many of the critical facilities that were initially restored such as hospitals ‘draw a higher load than residential customers,’ the department went on to say.

In other words, the percentage of load restored could be higher than the number of homes that actually have their lights back on.

(I’d speculate that the total generation figure is the one the bondholders, who we will get to, care about.) Fortunately, CNN did some really good reporting (!) on the condition of the Puerto Rican power grid. First, on the numbers:

The island’s leadership is touting restoration figures [see the dashboard –lambert] that show nearly 40% of electricity generation has resumed — but it doesn’t say how much of that power is actually reaching homes, schools and hospitals.

And now comes the reporting part:

With no reliable government information, CNN tried to contact each of the 78 municipalities in Puerto Rico, which are coordinating their own recoveries. Most calls simply did not go through. Along with so much here, communication is intermittent at best. Some 42 of the municipalities could not be contacted…. Just four regions reported that they were more than half back on line — Ponce and Guayanilla with 60% of residents with power.

Here is a map of CNN’s results:

Perhaps more eloquent than the map, however, is the picture of San Juan’s still-unlit skyline, a month after Hurricane Maria struck. Meanwhile, institutional factors seem to be getting in the way of power restoration. From an excellent post mortem in Electrical Engineering News:

New ‘day one’ for Puerto Rico grid repair, 7 weeks after storm

Speaking with reporters yesterday, House Natural Resources Chairman Rob Bishop (R-Utah), whose committee has jurisdiction over U.S. territorial issues, said restoring energy to the island would require coordination among four players.

“We have to get away from the idea that somebody is in power, and in control, and realize that you’ve got four separate entities that have to work together and not in an adversarial way,” Bishop said, naming the Federal Emergency Management Agency (FEMA), the Army Corps of Engineers, the government of Puerto Rico and the Financial Oversight and Management Board for Puerto Rico, established by Congress to watch over the commonwealth’s bankruptcy.

Let me know how that works out, Rob (and more on the FOMB below)[1].

Water

The water situation seems to have improved, but by how much is not clear. USA Today:

Gov. Ricardo Rosselló’s office said 82% of the island’s water meters are now active, but many residents say they still have no running water or the water they have is unsafe.

I suppose that’s an improvement on the power situation, where we’re not even bothering to count the meters. And of course, we in this country — well, except for the Flint, Michiganders among us — assume that a functioning water meter is a proxy for potable water, but it isn’t:

“We’re worried that in places even that have running water whether that water is safe,” said Erik Olson, health program director at the Natural Resources Defense Council.

His group reported in May that Puerto Rico’s water system had the worst record under the Safe Water Act, with 70% of the people living with water that violated standards set by the U.S. law.

And now the situation is worse, Olson said.

“The drinking water system in Puerto Rico was already very fragile,” Olson said. “When you lose water pressure, what can happen is if there’s groundwater contamination with sewage or flooding, that water can get into those pipes.”

Of course, the power situation impacts the potability of water. Miami Herald:

Even those with tap water have been advised to boil it or use purification tablets. With electricity still unreliable in the places where it has been restored and generators prone to breakdowns, water treatment plants can go down without warning.

But it’s not just the water treatment plants. USA Today:

“While boiling is an easy way to decontaminate water, most people I spoke to either didn’t (have) electricity or cooking gas to get that done,” he said.

(Bottles of cooking gas are delivered by road….). The upshot is that there are continuing reports of waterborne illness:

Medical workers who volunteered across the island report similar patterns of symptoms almost everywhere.

“Over the past two weeks, we’ve seen a continuous stream of adult and pediatric patients with gastrointestinal illness, most often involving fever, vomiting and diarrhea,” said Christopher Tedeschi, an emergency medicine physician at New York-Presbyterian/Columbia University Medical Center, who returned last Thursday from Puerto Rico. “It’s hard to say the source — or more likely sources — of the illness, although contaminated food and water are very likely

And please don’t say “Use bottled water!” USA Today once more:

In the meantime, finding bottled water can be a challenge even in San Juan. Prices have also increased since the hurricane, making it hard for low-income families to pay for filtered water.

With roads still out, power unreliable, and no water, it’s no wonder people are leaving.

Depopulation

From CBS Miami:

FEMA is working on arrangements to help transport survivors of Hurricane Maria from storm-ravaged Puerto Rico to the U.S. mainland.

The operation, which officials call an “air bridge,” could take some time to set up because FEMA hasn’t flown such a large number of people out of a disaster zone before.”We have about 4,000, 5,000 people coming from Puerto Rico to Florida a day,” said Gov. Rick Scott (R-FL).

And from the Tampa Bay Observer, one of the more dispiriting reactions:

The arrival of more than than 130,000 Puerto Ricans in Florida since Hurricane Maria…

And then right in the same [family-blogging] sentence, without missing a beat:

…has some officials anticipating a political shakeup in a battleground state dominated by the Republican party.

Both parties are actively courting new arrivals to Florida, which President Donald Trump won last year by 112,000 votes out of 9.6 million cast.

And the Washington Post:

Experts at the Center for Puerto Rican Studies at Hunter College in New York estimate that more than 300,000 Puerto Ricans could leave the island in the next two years, and Florida would likely attract many of those.

“Florida is a big swing state and Central Florida is the epicenter of that,” Dennis Freytes, a political activist in the Orlando area, told the Tampa Bay Times in September, just after the storm. “This could be a very big deal. There are going to be voter registration drives and both parties are going to be after them. They already are.”

“A very big deal.” It’s as if Irish immigrants who dominated the Tammany Hall machine had expressed ecstasy over the Irish potato famine, because of all the voters it brought them.[2] At this point, we would do well to remember — as I’m sure many Puerto Ricans do — that the only plan the Democrats have passed for Puerto Rico is PROMESA, where they acted on behalf of the bondholders. A comprehensive plan for Puerto Rican recovery, including debt relief? Lol no.

Money

First, Puerto Rico is going to need rather a lot of it. Bloomberg:

Puerto Rico Needs as Much as $21 Billion in Aid, Oversight Official Says

The “Oversight official” is Natalie Jaresko, the FOMB’s (Ukrainian, Chicago-born) executive director.) Back to Bloomberg:

Puerto Rico needs $13 billion to $21 billion over the next two years to meet payroll and keep the government running, Natalie Jaresko, the executive director of the island’s federal oversight board, said Tuesday during a Congressional hearing about Puerto Rico’s recovery after Hurricane Maria.

$21 Billion is real money, even today, so it’s unsurprising that Jaresko is also moving to take control of the money spigot. Caribbean Business:

During last Tuesday’s hearing, Jaresko also emphasized the importance of clarifying what role the board will play in the oversight and management of federal funds that reach the island for the recovery and reconstruction of infrastructure after Hurricane María.

The executive director said Puerto Rico will need $13 billion to $21 billion in additional liquidity until the summer of 2019. Given this scenario, the board has already proposed “legislative language” that would grant it the power to control any disbursement of federal funds made available for the government’s liquidity. The board assured that would be the way to guarantee that federal funds are used for María-related matters.

In a congressional oversight hearing Tuesday, the executive director of the fiscal board, Natalie Jaresko, told the U.S. House Natural Resources Committee that her panel would welcome any legislative action that reaffirms and clarifies its powers under the Promesa federal law. She added that it would help avoid costly litigation against the Government of Puerto Rico whenever there are differences of opinion and interpretation about what the board can or cannot do.

Meanwhile, the FOMB is muscling the Puerto Rican government from another angle:

The federal board overseeing Puerto Rico’s finances on Tuesday asked the bankrupt U.S. territory to submit a new fiscal turnaround plan by Dec. 22, taking into account damage caused by Hurricane Maria.

Speaking at the board’s public meeting in San Juan, Executive Director Natalie Jaresko said the board would approve or reject the revised draft by Jan. 12.

The meeting, the first since Maria made landfall on Sept. 20, is a shift back to focusing on Puerto Rico’s troubled finances, which have taken a back seat in recent weeks as the island has tried to recover from the hurricane.

The new plan must be for five years instead of 10, and like the original blueprint it should focus on promoting new investment, including through pension reform and corporate tax reform, Jaresko said.

She added that Puerto Rico should submit audited financial statements for fiscal year 2015 by Dec. 31.

Piece of cake. I mean, as long as there’s water and power in the ministries.[3] And I’m sure that readers can imagine what “promoting new investment, including through pension reform and corporate tax reform” means, in practice.

Conclusion

I suppose it’s a good sign that Puerto Rico has recovered enough for the powers-that-be to start arguing over what’s really important to them: How much money there will be and who gets their cut. So, optimism!

NOTES

[1] I’m not going into detail on the clownish crudity of the Whitefish contract debacle, because, given Puerto Rico’s colonial status, I’m sure there are compradors involved, with their own motives, as well as administration officials and donors, and that’s more than I have time to untangle.

[2] From the Times:

Tammany figures, many of them descended from survivors of the potato famine in the mid-19th century, made no attempt to investigate the claims of those who sought their help. One of the machine’s legendary scoundrels, “Big Tim” Sullivan, explained how he approached those who sought a free meal in his clubhouse: “I never ask a hungry man about his past. I feed him not because he is good, but because he needs food.”

Universal concrete material benefits, especially for the working class….

NOTE

Via People: “Lin-Manuel Miranda Will Bring Broadway Hit Hamilton to Puerto Rico and Play Title Character.” Darkly ironic, given that Hamilton is an ode to finance capital, i.e., to those bondholders.