23 October 2012

PREPA(id) Failure Imminent

Power failure up ahead.

The Puerto Rico Electrical Power Authority (THIEF) is in trouble. No, not the kind where it is running at 99% capacity with 1970s leftover technology: it's in financial trouble. Now before you mouth-fart some sort of "Awww," it is the agency's fault. And that of the (non)government that runs it down.

According to Efraín O'Neill, the spokesperson for the Energy Dialogue Commission, the Power Authority is "nearly bankrupt" and that "We're headed off a cliff."

Oh yeah.

Now his two-part "explanation" for this debacle begins with the spitball that the basic rate (charge per kilowatt hour--kWh) has not been adjusted since 1989, and therefore the agency can't generate enough money to cover its operating costs.

The hell with spitball: that's bullshit. For three reasons:

1) The basic rate has been a frequent cockfight with the government, who keeps the rate low to appease voters. (Even the lame-brained """Center for the New (We Lie) Economy""" can see that.) The rate is not even one rate: there are several rates, including a $3.00 per household charge regardless of usage and a special rate for public housing residents that charges them $0.001 per kwH--that is ONE-TENTH of a fucking PENNY per kWh. Guess how many votes that comes out to?

2) There are two surcharges that pad out the bill. One is the "energy purchase surcharge," an accounting label, that supposedly covers the "cost" of buying electricity from itself. This fraudulent siphoning is best described as "what We could finagle to cover the basic rate limitation." The second suction hose is the controversial "fuel adjustment surcharge," tied to the price of oil in the exact same way that My haircuts are tied to the price of cinnamon in Bangladesh. Between these two rates, the THIEF has created a cozy little electrical cottage industry, as pointed out by economist José Alameda. Here's the comparison of electrical power agency incomes, in 2011:

Note how PREPA (okay, I'll use that) ranked first in total revenue ($3.699 million) and yet ranked 6th in megawatt hours sold (18.7 MWh, behind NYPA, Salt River, Santee Cooper, LADWP and CPS Energy.) PREPA had higher income than a primary power supplier for New York (population: 8.24 million) and Los Angeles (population: 3.82 million) (Our population is about 3.86 million).

Toss in this extra bit of data: both cities have enormously higher household incomes than We do: Los Angeles comes in at $46,901; New York at $48,631 and We come in at $20,212. So THIEF (I have to go back to that) isn't doing so bad in the "gouging its market" department, right? Comes from being a monopoly, no doubt, an advantage none of the other listed power companies has.

3) There is no question that THIEF is mismanaged up the yin-yang. Horribly, horribly mismanaged. Serially-concussed-Keystone-Kops-on-bad-acid mismanaged. Long-ago-would-have-been-broke-if -it-had-any-competition broke. Once again, a little chart, courtesy of José Alameda, that I will then explain to statehooders:

This is the fascinating chart of revenue-per-employee in each electrical power agency. Quickly note PREPA/THIEF at the very bottom, the absolute nadir, with a measly $2,125 of revenue...per employee. With an average salary of $40,560 per employee and an average executive salary of $109,200, is it any wonder that THIEF is a fucking failure when it comes to making money--as a goddamn monopoly?

And don't get Me started on the sweetheart corporate deals for zero-rate power usage and outright electricity theft, mainly perpetrated by statehood party members and appointees, like an Education Secretary, an (out)house representative with multiple lapses and even including one who was actually fired as THIEF's Executive Director for an illegal electrical connection.

Government fraud, cronyism, nepotism, political shenanigans, corporate fraud and the protected status that makes a monopoly have kept Our power agency from being an engine and turned it into a sump pump. But the second part of O'Neill's statement...well, that's just diarrhea on the turd-cake.

O'Neill said that in 1997, the agency's debt was $3.7 billion, that it "later rose to $4.7 billion, then $6.5 billion and now stands at $8.5 billion." Glance back at the first chart and see an agency revenue of $3.7 billion. Now pair that up with an $8.5 billion debt. As the voluble Mythbuster says: "There's your problem, right there!"

What O'Neill fails to address--what he totally doesn't say--is that the 1997 debt began in the Pedro Stupid Rosselló (mis)administration and rose to $4.7 billion in the following 11 years, under two commonwealth-supporting governors that were (a) feckless and (b) reckless.

But then came The Larva and his fecal coliform parasitic disease-addled (non)administration and almost doubled the debt. PREPA/THIEF bonds have been the leading debt-maker for Puerto Rico since 2009, as sales tax bonds and Water Authority bonds maxed out.

And what have these PREPA/THIEF bonds provided Us? Here's the complete, updated list:

1) Debt
2) Nothing else.

The funds from this sell-out frenzy have been channeled to largely private sources. The bonds themselves are increasingly suspect, requiring major adjustments to keep them rated high enough to find buyers. The THIEF fuel surcharge, according to Alameda, over-charged consumers by almost $1.99 billion between 2008 and 2010, 28.8% above the cost of oil. But even so, THIEF is "losing" money, with over 8,800 employees clogging up the works, an annual revenue level per employee that equals what the local hot dog stand makes a month and a debt load lining vermin's pockets at Our expense. Twice.

Yes, there's a legislative (out)house push to eliminate the agency's fuel surcharge. But that's to bolster the moronic GasoDildo project, a huge useless tube filled with methane that serves as the perfect metaphor for the current (non)administration.

THIEF is in danger of going bankrupt. Our electrical system is in the hands--and has been for decades--of totally useless cost units. Tack on greedy cockroaches selling Our future to feed their greed and you have Us facing a blackout.

Not if: when.

The Jenius Has Spoken.

[Update: 24 Oct 2012: A preliminary report from the Energy Dialogue Roundtable indicates that the power agency's problems are due to far more than an unadjusted basic rate. So after seven months of "work" so far, when is the final report due? February 2013. ]

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