Dive Brief:
- The governing board of the Puerto Rico Electric Power Authority on Friday rejected the appointment of Noel Zamont as the "chief transformation officer" tasked to oversee power restoration and attract new capital to rebuild the devastated grid.
- The federal control board that oversees Puerto Rico's finances announced on Wednesday it intended to appoint retired Air Force Colonel Noel Zamont to spearhead grid restoration efforts. The control board previously appointed Zamont as Puerto Rico's "revitalization coordinator" in July, charging him with rebuilding the island's moribund infrastructure.
- Puerto Rico Gov. Ricardo Rosselló also announced his opposition to Zamont's appointment on Friday, saying the management of PREPA, a public utility, "rests exclusively on democratically elected officials," potentially setting up a jurisdictional battle over power restoration.
Dive Insight:
Federal officials and Puerto Rican leaders could be shaping up for a turf war over who will coordinate the rebuild of the island's electric grid after Hurricane Maria damaged or destroyed virtually all of it in September.
On Friday, PREPA's governing board announced they rejected not just Zamont's appointment as the CTO, but the federal control board's ability to appoint anyone to the role at all.
“The PREPA Governing Board today unanimously approved the rejection of the appointment of Noel Zamot in a resolution in which they do not recognize the authority [of the fiscal board to] impose their decisions, only to recommend," said PREPA Public Affairs and Public Policy Ramón Rosario, according to Caribbean Business.
Puerto Rico's Financial Oversight and Management Board was established by the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), passed by Congress in 2016 to oversee the territory's troubled finances. The board in July appointed Zamont as revitalization coordinator under the same law, tasking him with attracting capital to rebuild critical infrastructure in Puerto Rico, including the electric power grid.
On Wednesday, Caribbean Business reported the control board intended to move Zamont to a new role as "chief transformation officer" under the same PROMESA authority. The next day, the board reportedly asked Judge Laura Taylor Swain, who oversees the government's bankruptcy process under PROMESA, to authorize Zamont to assume “all the powers of a chief executive officer” at PREPA.
The fiscal control board called Zamont's appointment an "essential step in achieving the goals of reliable, competitively priced electricity and attracting the private capital we need to revitalize the economy of Puerto Rico."
The bit about attracting private capital appears to have become a sticking point. Earlier this week, Puerto Rico officials told Bloomberg they were considering privatizing the island's generation, and Zamot told Caribbean Business this week that he would not rule out private ownership for the entire utility.
Those discussions did not appear to sit well with PREPA leadership.
“We don’t know what particular or economic or creditor interests the board may have with this appointment," Rosario said Friday. "PREPA is under transformation and going through a very difficult moment, in which all its employees are working hard to reestablish the electric grid."
Rosselló backed up those comments Friday, issuing a statement that said the management of all Puerto Rico's public companies "rests exclusively on democratically elected officials."
"The people of Puerto Rico have entrusted to their elected Government the sound administration of their funds and governmental entities," Rosselló said, "and the Government of Puerto Rico will be zealous in defending the People of any action that seeks to undermine this process, whence it comes."
If Rosselló opts to challenge Zamont's appointment in court, E&E notes it would open a legal battle over PROMESA, which gave the federal control board oversight over Puerto Rico's public agencies, including PREPA.
Congressional leaders and the Federal Emergency Management Agency called for reviews of PREPA's contracting practices this week after the award of a $300 million contract to Montana-based Whitefish Energy. The contract stipulated that "in no event shall [government bodies] have the right to audit or review the cost and profit elements."
