Puerto Rico in Distress

ABI Analysis

Puerto Rico announced on Sunday that it plans to privatize electricity generation, a first for a U.S. territory facing chronic power outages as it struggles to rebuild a crumbling electric grid, the Associated Press reported.

The House on Thursday passed a bill that would allow Puerto Ricans to decide their future governing status, a long-sought goal on the island territory, the Washington Post reported. The vote was 233-to-191, with 16 Republicans breaking ranks and joining Democrats in backing the measure.

Puerto Rico’s financial oversight board filed a plan to restructure about $9 billion of power utility debt after failing to reach a deal with bondholders, signaling the agency’s five-year bankruptcy will take even longer to resolve, Bloomberg News reported.

Luma Energy won approval from Puerto Rico’s financial oversight board for a contract extension to run the island’s government-owned power grid amid criticism that the historically fragile electric system remains unreliable, Bloomberg News reported.