Emergency Manager to Be Installed at Puerto Rico Power Utility
Sources say oversight board looking to eventual privatization of Prepa
Stop scratching on holidays
Published: June 1, 2012
Off Track Betting in New York State has been racing into a crisis called shrinking revenue. Some people have spitballed a solution: Don’t close on holidays.
New York State Racing Law bars racing on Christmas, Easter and Palm Sunday, and the state has ruled OTBs can’t handle action on those days, even though they could easily broadcast races from out of state.
“You should be able to bet whenever you want,” said Jackson Leeds, a Nassau OTB employee who makes an occasional bet. He added some irrefutable logic: “How is the business going to make money if you’re not open to take people’s bets?”
Elias Tsekerides, president of the Federation of Hellenic Societies of Greater New York, said OTB is open on Greek Orthodox Easter and Palm Sunday.
“I don’t want discrimination,” Tsekerides said. “They close for the Catholics, but open for the Greek Orthodox? It’s either open for all or not open.”
OTB officials have said they lose millions by closing on Palm Sunday alone, with tracks such as Gulfstream, Santa Anita, Turf Paradise and Hawthorne running.
One option: OTBs could just stay open and face the consequences. New York City OTB did just that back in 2003. The handle was about $1.5 million – and OTB was fined $5,000.
Easy money.
The Palo Seco Power Plant in Puerto Rico after Hurricane Maria passed through. PHOTO: ALEX WROBLEWSKI/BLOOMBERG NEWS
U.S. officials supervising Puerto Rico’s finances are installing an emergency manager at the island’s public electricity utility, in an attempt to course-correct a disaster response that has come under congressional scrutiny.
Puerto Rico’s financial oversight board is appointing the emergency manager to take over the public electricity monopoly, known as Prepa, with an eye toward its eventual privatization, according to people familiar with the matter. The maneuver would largely wrest control of the utility away from its board of directors and Gov. Ricardo Rosselló.
More than a month after Hurricane Maria knocked out power to all of Prepa’s customers, service has been restored to roughly a quarter of them. Prepa’s contracting decisions in the wake of the storm, including its use of a tiny Montana-based firm to rebuild power lines, have raised concerns among members of Congress about the utility’s management.
A spokeswoman for Mr. Rosselló didn’t immediately respond to a request for comment. But the governor favors keeping the utility under local control and is expected to resist ceding authority to the oversight board, the people familiar with the matter said. Awash in $9 billion in debt, Prepa entered a court-supervised bankruptcy in July to restructure its obligations.
The situation is the latest power struggle between the governor and the oversight board over Puerto Rico’s financial rehabilitation. Before Maria hit, the two sides were tangling in court over whether the board could order furloughs of public employees and impose other austerity measures.
The storm knocked out aboveground distribution lines across Puerto Rico, triggering a humanitarian crisis that has exacerbated the U.S. territory’s precarious financial position.
Lawmakers are now scrutinizing spending decisions during reconstruction efforts. Members of Congress from both parties are calling for investigations into a $300 million contract awarded to a Whitefish Energy Holdings LLC, a two-year-old company that had two full-time employees when the storm hit last month. Oklahoma-based Cobra Acquisitions won a $200 million contract.
Gov. Rosselló said Tuesday after Hurricane Irma hit, the government had reached out to contractors and of those Whitefish was the only one that did not require substantial cash upfront. He said he ordered the island’s Office of Management and Budget to review Prepa’s contracting of repair crews and to report its findings to the Puerto Rico comptroller. “All procurement processes will be audited,” he said.
Congressional leaders and White House officials privately called on the oversight board to take on more responsibility from the governor, a person familiar with the matter said. Compounding the challenge of restoring power are the antiquated conditions of the grid, which Prepa Chief Executive Ricardo Ramos has said could cost more than $5 billion to repair.
President Donald Trump’s administration has directed the Army Corps of Engineers to help guide the effort to rebuild the electricity grid. A task force that includes the agency as well as the Energy Department and the Puerto Rican government is working to assess damage and develop a plan.
Meanwhile, the Senate on Tuesday passed legislation that extends emergency credit to Puerto Rico and provides $36.5 billion in hurricane relief for affected areas across the U.S., including $18.7 billion to replenish the Federal Emergency Management Agency.
The island’s power plants weathered the storm without suffering major damage, but the network of 2,400 high-voltage transmission lines and 31,000 miles of low-voltage distribution lines, which deliver power to homes and businesses, took a beating.
—Arian Campo-Flores contributed to this article.
Write to Andrew Scurria at Andrew.Scurria@wsj.com
