Puerto Rico faces record electric rate as demand and costs increase
Summary
Puerto Rico has raised its electricity rates to a record high amid ongoing power outages and a failing power grid. The price increase comes as fuel costs rise due to global oil price changes and supply issues, while the island continues to recover from damage caused by Hurricane Maria in 2017.Key Facts
- Electricity rates in Puerto Rico increased by about 18%, from $229 to $271 for a typical monthly bill using 800 kilowatt-hours.
- The new rate is 33.86 cents per kilowatt-hour, much higher than the U.S. mainland average of 18.3 cents.
- Higher costs are due to increased energy use in hot weather, global oil price rises linked to Middle East conflicts, supply problems, and using expensive fuel when power plants underperform.
- The power grid was severely damaged by Hurricane Maria in 2017 and has continued to have reliability problems.
- A recent fire at a substation cut power to more than 200,000 customers.
- Fuel supply issues include a blocked natural gas delivery vessel, forcing plants to use more expensive diesel fuel.
- Puerto Rico’s government is trying to cancel contracts with companies managing transmission and power generation, which are tied up in legal disputes.
- The island relies mainly on petroleum and natural gas for electricity, with only a small portion from coal and renewables.
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