Off The Grid: The Rising Economic Effects Of Puerto Rico’s Electricity Outage

The effects of Hurricane Maria continue to be felt two months after the hurricane first made landfall in Puerto Rico, as thousands struggle to survive in an economy that cannot sustain without electricity and other basic services.

With 80 percent of Puerto Rico’s power lines knocked out in the hurricane, less than half of the island has power, and even those with power are experiencing continued blackouts, and this lack of electricity has had a profound effect on Puerto Rico’s economy, which already owed $USD70 billion before the hurricane hit. Manuel Laboy Rivera, secretary of Puerto Rico’s Department of Economic Development and Commerce, and other analysts and economists, estimated the island’s economy could lose between $20 to $40 billion due to the lack of power, tourism industry losses, and an estimated loss of 156,000 Puerto Ricans to the U.S. mainland since the storm. Government officials reportedly estimated that this out-flux could eventually hit 300,000.

While some larger businesses, like construction companies and chain restaurants, have either expensive generators or else are currently in demand as a result of the storm, other smaller and medium sized businesses have taken a hit – including smaller restaurants, hotels, law offices, retail stores, media companies, and manufacturing companies – and many have laid off employees and closed down, unable to run their businesses without electricity and fearing rising unsustainable costs and burglaries if they stay open. These smaller businesses account for up to 80% of jobs in the workforce, and Rivera estimated that 50,000 of these businesses remained closed, resulting in a rising unemployment rate and 22,000 emergency unemployment benefit applications in October alone, according to Puerto Rico’s Department of Labour.

This situation has not been helped by PREPA (Puerto Rico Electric Power Authority), Puerto Rico’s public utility company, whose executive director recently resigned amidst criticism of a botched deal with Whitefish Energy – a small start-up company in Montana that was not equipped to deal with the island’s damaged electrical grid, and ended up severely overcharging PREPA for the work.

Hurricane Maria’s impact on Puerto Rico was devastating and caused a wide range of problems for the island, many of which seem to have no clear solution in sight. In addition to the lack of power – from which many problems stem – closed schools and businesses, a lack of clean running water, damaged homes, overcrowded shelters, and fears of a mental health crisis, could also impact the rate of Puerto Rico’s recovery and economic rebound. Making the process that much more difficult, unlike in cases of U.S. mainland disasters, such as Hurricanes Katrina, Sandy, and Harvey – Puerto Rico has received marginally less, slower, and more reluctant federal government assistance and humanitarian aid compared to these other cities and towns, according to multiple news outlets.

These issues, coupled with Puerto Rico’s economic situation prior to the hurricane, have worsened the economy and recovery and rebuilding processes, and until these issues are addressed and resolved, and power returns to the majority of the island, Puerto Rico cannot repopulate, support families and small business, and revive their tourism industry in order to bring normalcy back to the lives of its inhabitants.

Ashika Manu