Veteran utility executive tells senators of his plans for Puerto Rico grid
Nearly 23,000 customers remain without electric service on Puerto Rico as crews continue to navigate mountainous jungle terrain more than seven months after hurricanes devastated the island, officials told a U.S. Senate committee on Tuesday.
Walter Higgins, the new chief executive officer for the Puerto Rico Electric Power Authority (PREPA), assured senators that, as the restoration continues, the utility is preparing for the start of the next hurricane season just three weeks away.
PREPA will conduct a hurricane drill in a few weeks, he said, followed by an island-wide emergency drill. “And then, whatever lessons we learn from that, we will hold another drill in June so that we will have practiced and practiced and practiced to be as ready as possible for the next season.”
Appointed in March, Higgins was among several officials who spoke to the U.S. Senate Committee on Energy and Natural Resources Tuesday about the status of the restoration and plans for the future.
Responding to the committee chairman, Sen. Lisa Murkowski (R-AK), Higgins said crews are at the hardest part of the process. “We’re down now to where we’re getting less than, or sometimes only, one-tenth of a percent of additional customers restored on any given day. That’s not very many,” he said.
“We’re making progress, not nearly as fast as our customers would like, not nearly as fast as we would like, but we’re doing about as good as you can do in these very narrow, very tight, areas where you almost can’t even drive two trucks past each other,” he said.
“It will never be satisfactory to the person whose power has been out for seven or seven-and-a-half months,” he added. “There’s nothing we can do to make that better except continue to work really hard to try to do it.”
The hurricanes hit in September. Then last month Puerto Rico suffered another island-wide power outage because the electric system is operating outside of its normal configuration. With limited transmission capacity, workers accidentally caused a fault that triggered a cascade of lines to trip off and resulted in a blackout. “The grid is very weak right now because a number of lines are still out,” Higgins said.
As of Monday, crews had restored service to 98.44 percent of customers, said Charles R. Alexander Jr., director, contingency operations and homeland security for the U.S. Army Corps of Engineers.
The Corps, which has been assigned to Puerto Rico by the Federal Emergency Management Agency, is scheduled to end its mission May 18, which is likely before the restoration will be complete. Alexander said FEMA decided to end the assignment, a statement that stirred criticism from Sen. Martin Heinrich (D-NM).
“Mr. Alexander, if there are over 20,000 Puerto Rican-American citizens still without power, is your mission really accomplished?” Heinrich asked.
“Our mission, as assigned by FEMA, is,” Alexander replied.
“I don’t think that’s acceptable,” Heinrich said. “I cannot imagine a scenario where twenty-plus-thousand Texans or twenty-plus-thousand Floridians, were without power and FEMA would make that decision. I think that’s reprehensible.”
Later in the hearing, responding to Sen. Mazie Hirono (D-HI), Alexander elaborated.
“We run out of money on the 18th and we run out of authority,” he said. “I would be remiss if I didn’t say … it’s not in our culture to walk away from a mission when it hasn’t been fully accomplished. But we follow orders.”
The Corps of Engineers will return management of the restoration to PREPA, which was in bankruptcy when the storms hit and which was severely criticized for its response.
The former chief executive, Ricardo Ramos, resigned in November after awarding a high-priced contract – later scrapped – with a small Montana company for restoration work.
Higgins told Murkowski he expects “growing pains” as the authority assumes management of incoming supplies but that the agency is prepared.
“We sure want to know that you really are ready and that you’re not still kind of working through things,” Murkowski said.
“We are ready to take the task,” Higgins said.
A 1966 graduate of the U.S. Naval Academy with a bachelor’s degree in nuclear science, Higgins has lengthy experience in utilities. He is listed as chairman of South Jersey Industries, parent of South Jersey Gas. He previously served as president and CEO of Ascendant Group Ltd. and subsidiary Bermuda Electric Light Co. Ltd. Higgins’ LinkedIn page says he also has served as chairman and CEO of Sierra Pacific Resources, a predecessor of today’s investor-owned NV Energy in Nevada.
Higgins commented on Alexander’s point that 98.44 percent of customers have had power restored.
“That’s good, but it’s not nearly good enough because there are still 23,000 people that do not have power available to their premise,” he said, noting that there are about 1,900 workers in the field.
“We also know that there are some places that may be just too hard to get to in any reasonable time,” Higgins added. “We have activities underway currently to find alternate solutions for those people. Perhaps there might be microgrids; at a minimum a solar generator, a solar battery and an emergency generator.”
Higgins is the first PREPA chief executive appointed through a non-politically-influenced process, said Christian Sobrino-Vega, president of the Government Development Bank and chairman of the board of the Fiscal Agency & Financial Advisory Authority for the Government of Puerto Rico.
“That is something that we are very proud of, that we have this first non-politically-appointed CEO for PREPA,” he said.
Higgins said he will have independence. “I was asked to come to Puerto Rico with the full knowledge that I could replace anybody in management that I felt I should replace. I’ve received no interference on that. The governor has made clear to me that I am an independent CEO, (and) have the authority to replace management as I see fit.”
“The governor is the chief executive of the island and he sets policies for the Island,” Higgins added. “And my job, as the head of a major state agency – albeit under an independent board – is to carry out the policies of the governor.”
Sen. Mike Lee (R-UT) asked Higgins if there was mismanagement or corruption in Puerto Rico or in PREPA. Higgins said he didn’t know enough about the island to say and he assured the committee he will watch the utility closely.
“There are always going to be, in an organization of 6,000 people, something that’s going on that shouldn’t be and we are going to vigorously investigate and go after anything that’s not done the right way,” he said.
Having led regulated utilities in the past, Higgins accepted that PREPA’s activities also will be regulated. “I believe that nothing is better for a customer, in the long run, than a fair, firm, strong, well-managed, regulatory entity and nothing is better for a utility,” he said. “At the end of the day, the customers get better rates, better reliability and the utility knows what the rules are and they operate by it.”
Higgins said PREPA is adopting the Rural Utility Service standard (RUS) to guide future construction.
“That’s an important step for us,” he said. “The system was designed to American Society of Civil Engineering standards in the past. But this national standard will help to facilitate bringing people into the island, getting parts on a faster basis, making things familiar to everybody everywhere, making it easier to model, easier to restore, easier to adopt new technology, because everything we do new from now on, and eventually to be rebuilt, will be done to an accepted national standard, and the RUS standard is a good one.”
Officials agree that the grid is better today than before the storm but much work remains to establish a modern, state-of-the art, system.
“Some parts of the grid infrastructure are probably more resilient today, but perhaps more resilient by default as they have been replaced with newer materials,” Murkowski said. “Still as last-month’s island wide power outage demonstrated, the grid remains fragile and unstable.”
She asked Higgins if PREPA’s supplies will support the new standard. Higgins said they will allow PREPA to maintain the existing system. But as PREPA redesigns and rebuilds in the years ahead it will need to make changes.
“Many of the things that we’ll have to do in the future will require different equipment to be installed,” Higgins said. “Resilience is about not just design but also design philosophy, operating philosophy. Many things have to be done. That work is just starting. It will take years and years for the system to be completely rebuilt.”
