On Wednesday, the second blackout in a week hit Puerto Rico as the decrepit power system went out again. Hours later, the territory’s federal oversight board said that if all goes as planned, the government should soon start seeing budget surpluses big enough to pay a sliver of its debt.
But residents like Marie Rivera were doubtful -- and a little angry, too.
"It’s not fair to pay the bondholders, when the Puerto Rican people are still suffering the consequences of what Hurricane Maria left us," said Rivera, a 38-year-old single mother and hotel sales manager in San Juan. "This is the type of situation that leaves you wondering if it’s worth making all these sacrifices, or if it’s better to just go and move to the States."
The federal board, created by the U.S. Congress, is trying to chart Puerto Rico’s resurrection from a financial crisis that built over years, only to be temporarily worsened by the September storm that left its electricity system in tatters and caused thousands of residents to leave.
By cutting spending, improving tax collections and taking steps to encourage businesses, the board is projecting that Puerto Rico’s central government can swing to a $6.7 billion surplus over the next six years before accounting for debt payments. That’s about $400 million more than a previous estimate from Governor Ricardo Rossello, whose steadily more sanguine forecasts caused bond prices to rally this year, even though how much will be repaid will be hashed out in bankruptcy court.
But the numbers are based on the notion that Puerto Rico’s growth prospects have actually improved since Hurricane Maria slammed into the island as a powerful Category 4, battering infrastructure and hobbling its already feeble economy. Not long before the plan was released, the island lost power yet again, the latest in a series of episodes that show it’s still a volatile place to live and do business, even seven months after the storm.
The power utility said some 75 percent of customers had power back by Thursday morning, but it remained intermittent in many areas and the incident had already caused island-wide chaos.
On Wednesday, hospitals and the main international airport temporarily ran on emergency power. A generator fire filled the streets of a trendy San Juan neighborhood with smoke, and hundreds of businesses were forced to close.
The outage was attributed to an excavator incident involving a company subcontracted to help in power restoration efforts. Another blackout that occurred last week, affecting more than 800,000 clients, was caused by a fallen tree.
The new fiscal projection marks the latest boost to the estimates for the financial recovery of the territory, which is set to receive about $62 billion of federal aid and insurance money to help rebuild. Earlier increases in surplus estimates have sparked rallies in Puerto Rico securities, causing some prices to double since December.