SAN JUAN, Puerto Rico — Puerto Rico’s power company said Sunday that it will reduce its operating reserve to save money amid a cash shortfall as officials warned that the move could destabilize the U.S. territory’s fragile electrical grid.
Public Affairs Secretary Ramon Rosario said that although the measure is needed, it could affect a grid still experiencing frequent blackouts as nearly 250,000 customers remain without power more than five months after Hurricane Maria. The Category 4 storm destroyed two-thirds of the power distribution system and caused the longest blackout in U.S. history.
The measure to reduce the operating reserve comes just days after a federal judge rejected a $1 billion loan request for Puerto Rico’s power company, saying there was insufficient evidence to prove the power company needs the money. Government officials and a federal control overseeing Puerto Rico’s finances lowered their request to $300 million on Friday, per the judge’s instruction, but warned that the funds would allow the company to operate only until late March.
“The power company’s fiscal situation is real and we have to deal with it now,” Rosario said.
Both he and Gov. Ricardo Rosselló have called on the Treasury Department to release a billion-dollar loan that Congress approved in October for disaster recovery, saying it would help ease the power company’s financial situation.
Last month, Rosselló announced plans to privatize the company, which is $9 billion in debt and operating with infrastructure nearly three times older than the industry average. The U.S. territory experienced frequent blackouts even before the hurricane, including an island-wide outage in September 2016.