Puerto Rico governor plans power company overhaul

SAN JUAN, Puerto Rico (AP) Puerto Rico's governor announced Wednesday that he is overhauling the island's state-run power company amid corruption allegations and criticism that bills are on average more than double that of the U.S. mainland.

Gov. Alejandro Garcia Padilla pledged to cut power costs by 20 percent in two years and 50 percent in the next 12 years. He said he would create a commission to regulate the power agency and oversee its contracts, operations and expenses.

Many people in this tropical U.S. territory, which has been in a recession for seven years, have long complained of what they say are outrageous and inaccurate bills.

"There's only two of us at home and we pay $400," said Hernan Reyes, a municipal street cleaner who noted he doesn't have a dryer or use air conditioning.

Such a bill is considered normal, with Puerto Ricans paying some 30 cents per kilowatt hour.

The government blames Puerto Rico's dependence on oil to generate nearly 70 percent of its power. But legislators say a large part of the problem is that the Electric Energy Authority operates with little oversight, regulation and transparency.

"It's an industry that basically decides, depending on who's overseeing it, the rates it will set, how much it will charge and what type of fuel it will use. It faces no competition," Senate President Eduardo Bhatia said at a recent public hearing.

Bhatia and others are pushing to privatize the industry.

The authority faces an $824 million deficit and has incurred more than $1 billion in operational losses since 2008.

Garcia said the agency will have to publish its rates monthly and provide details on its finances and operational costs. It will have to revise rates every two years and take public input into account. It will also be ordered to provide live transmission of its board meetings and post all contracts online.

The governor is pushing to reduce reliance on oil, planning to convert a major power plant to use natural gas and aiming to increase the amount of renewable energy that Puerto Rico generates from 1 percent of its needs to 6 percent by late 2014.

Garcia proposed creating incentives for the installation of solar panels on schools and other public buildings. Puerto Rico already is home to the Caribbean's largest solar energy project, with more than 101,000 solar panels, and the region's biggest wind farm, with 44 turbines.