Privatization destroys Puerto Rico’s energy grid

Ricardo Santos Ramos, former President of the Electrical Industry and Irrigation Workers Union of Puerto Rico, gave a report June 13 at a meeting organized by the Detroit Party for Socialism and Liberation about how neo-liberal and colonial policy has crippled the electrical grid of Puerto Rico. UTIER is an influential and radical labor union leading the fight against privatization of the grid.

“Puerto Rico is experiencing a serious social, political and economic crisis aggravated by bankruptcy, the imposition of the PROMESA Law and its Fiscal Control Board, Hurricane María, the earthquakes in the southern zone and the pandemic that affects us all, Ramos said. 

Bankruptcy was forced on Puerto Rico in 2014 when credit agencies, working alongside banks, downgraded Puerto Rico’s bonds to “junk status” which made them much harder to sell. Without bond revenue to pay for existing social services, Puerto Rico was caught in a debt trap.

In 2016, the U.S. government passed the PROMESA Law which gave the Fiscal Control Board, appointed by President Obama, complete control over Puerto Rico’s economy and the power to “prohibit public sector employees from participating in a strike or lockout.”

The Fiscal Control Board quickly moved to privatize the Electric Power Authority, the company that manages Puerto Rico’s power grid. In June 2020, the federal government of Puerto Rico signed a contract with the Luma corporation to privatize the Electric Power Authority. Luma is a consortium made up of the Canadian corporation Atco and the U.S. corporation Quanta. That 15-year contract was negotiated in total secrecy and the negotiation was not announced until after the contract was signed, according to Bloomberg. Puerto Rico’s House of Representatives voted unanimously against the contract, but that vote was overruled by the unelected Fiscal Control Board.

“Among the clauses of the leonine contract, the fact that Luma does not invest a single penny in the business stands out,” Ricardo said. “Luma will receive a payment of $115 million for each one of the 15-year contracts plus the expenses they incur.

“To add insult to injury, as an act of hatred and persecution against the workers of the Electric Power Authority, the employees were not guaranteed the job or the rights of the agreement. Luma only promised to interview all those employees who reapply, and those who are finally recruited by Luma would have to resign all rights as a public employee, including their retirement,” he added.

UTIER says the secret contract violates labor laws and is urging electrical workers not to reapply. 

“Most workers, responding to the call of UTIER, did not accept the betrayal represented by working with Luma,” Ricardo said. UTIERS’s mobilization call is reaching other sectors of society as well, including truck drivers, social justice organizations and religious groups, according to the Weekly Journal. 

Because of this boycott, there is growing concern that Luma will not have enough electrical line workers for the upcoming hurricane season. According to Ricardo, Luma is trying to make up for the labor shortage by bringing in scabs from the UITICE and IBEW unions. “Today Luma has only recruited 300 linemen of the 800 that the Electric Power Authority needs. Of these, around 220 belong to UITICE, a union whose leadership was sold with Luma,” Ricardo says. 

So far, Luma has totally failed to manage the grid. Ten days after formally taking over administration, AP reported that more than one million Puerto Rican’s had lost power. That was not including a June 10 explosion at a main electrical substation that left an additional 800,000 people without power. 

“In the first 10 days of Luma control, it has shown that it does not have the capacity or the personnel to manage Puerto Rico’s electrical service. A few rains on the island caused more than 30,000 breakdowns in different sectors, keeping many without service for more than six days,” Ricardo said. Luma initially implied a “cyberattack” and “acts of sabotage” were responsible for the outages, although it has backed off those claims in recent days, according to AP.

Ricardo does not believe cyberattacks or sabotage caused the outages. “The only sabotage that has occurred in our electricity system was caused by politicians from the New Progressive Party and the Popular Democratic Party by deliberately abandoning the systematic maintenance of our electrical system, partisan politicization and by negotiating a leonine contract with a mafia company such as Luma-Quanta-Atco. That is employer sabotage,” he said.

He continued, “Sabotage is to deprive 4,000 workers of their rights. Employer sabotage is to undermine the retirement system of 12,000 people by not making the corresponding contributions, owing today $600 million. That is employer sabotage. Sabotage is stealing the first industry of Puerto Rico.”

In light of these massive failures by Luma, public opinion is turning against the company. Ricardo says, “Luma is not welcome in Puerto Rico. The people are becoming more aware every day that it is a mafia company created to steal money from FEMA and Puerto Rico … Luma brigades travel through the streets of Puerto Rico escorted by private police officers who use long weapons and by the Puerto Rico police. Only then do they feel safe to show their arrogance before the people of Puerto Rico.”

Ricardo is calling for solidarity and support from U.S. comrades, specifically to oppose U.S. electrical workers being brought in as de-facto strikebreakers for Luma. “We demand your help and solidarity in the dissemination of the IBEW intervention in Puerto Rico. This North American union is not welcome. We denounce its participation as an aggression against Puerto Rican unionism,” he said. 

Ricardo and UTIER plan to keep fighting. “UTIER will resist and fight until the last gasp of life. In each work center where a worker was transferred, a UTIER worker will take the message of struggle and resistance with the purpose of raising awareness among all the people … The only alternative that we the workers have to ensure that our rights are respected, to defend our first electrical industry, is the fight in the streets,” Ricardo said.

Solidarity and similarities in Detroit

After Ricardo’s report, Detroit community leaders spoke about the similarities between austerity in Puerto Rico and Detroit. Ever since Detroit was forced into bankruptcy in 2013, social services have been decimated via an unelected emergency manager and state intervention. 

Elena Herrada was a member of Detroit’s Public School Board in 2016 before the emergency manager dissolved that elected body. “Puerto Rico, like Detroit,” Herrada said, “is an internal colony. We have all the responsibilities, and none of the rights of first-class citizens. We have the responsibility to pay taxes, and none of the rights of deciding where our tax money will go.”

Bill Davis, President of the Detroit Active and Retired Employee Association, had his pension cut, similar to the electrical workers in Puerto Rico. He says his pension was cut “because of a fake bankruptcy, and I challenge the people of Puerto Rico to stand up and challenge this [bankruptcy], because it doesn’t end well.”

Despite the attacks, solidarity is strong between the two municipalities. “We are with you with all our heart and soul,” Herrada said.

The full report can be found here

Feature photo: UTIER members demonstrate against Luma. Photo credit: UTIER

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