Puerto Rico’s Colonial Context
Puerto Rico has been politically in limbo since the stars and stripes waved over San Juan in 1898: subject to U.S. law but denied a vote in Congress or the White House. Puerto Rico’s early history followed this timeline: the U.S. Army ruled until 1900, then the Foraker Act created a “civil” government that was barely autonomous. Washington would still elect the governor, chief justice, and top cabinet spots continue to oversee customs, currency, and shipping. Local legislators might adopt something that did not get the approval of D.C., only for a federally stacked executive council to scrap it.
Policies shifted constantly because America simply never fully decided what to do with colonies politically. 1917 saw the Jones-Shafroth Act: Puerto Ricans became U.S. citizens and now could be drafted into World War I, but still were not allowed to vote for president or elect voting representatives in Congress. The same statute preserved the Jones Act cabotage provisions: every box shipped between island and mainland port has to move aboard an American ship manned by an American crew, driving up costs and linking the economy to mainland-based carriers.
Fast forward some decades, to the post-World War II era: Washington sought to appease growing nationalism, so it endorsed Governor Luis Muñoz Marín’s Operation Bootstrap. The sale was simple: incentives in the form of tax credits and low labor costs would attract mainland factories. Later in 1952, Congress approved a new local constitution and gave the title Commonwealth. Puerto Rico gained some autonomy over affairs at home, but the high-ticket items—defense, commerce, immigration, and, of course, the strings on federal funding—were still firmly under U.S. control.
Energy History
Puerto Rico’s electricity infrastructure was initially designed as a colonial patchwork and ultimately became one, debt-heavy monopoly. In the early 1900s there were hundreds of tiny private plants—primarily owned by U.S. sugar corporations—that only powered the mills and several towns, leaving rural areas dark. In the 1940s, the U.S.-imposed government began Operation Bootstrap—the island-wide process of industrializing Puerto Rico by luring factories from the mainland with tax breaks and cheap labor. To carry out that scheme, officials consolidated the scattered utility companies into the Puerto Rico Water Resources Authority, later renamed the Puerto Rico Electric Power Authority (PREPA).
With federally guaranteed federal bonds, PREPA revamped Puerto Rico’s energy landscape: hydropower dams in the mountains, then enormous oil-fired complexes around the coast to energize the new factories. However, by the 1970s, more than 90 percent of the island’s power came from imported oil, subjecting Puerto Rico to serious market risk. As OPEC prices surged, PREPA borrowed money to keep the fuel flowing and pushed maintenance back even as Section 936 tax credits lured energy-hungry pharma plants that concealed the grid’s weaknesses. There was minimal repair work in the 1980s and 1990s—a handful of gas conversions and a lone coal unit—so the system continued disfucntionally. Transmission lines constructed during the 1960s aged without major overhauls, and PREPA debt reached into the billions. By the time Hurricane Maria hit in 2017, PREPA had almost all of the island’s pieces of the power puzzle—generation, transmission, billing—but its assets were older, more petro-based, and more indebted than nearly any mainland U.S. utility, setting for the monumental failure to follow.