On June 1 the government of Puerto Rico handed over management of the breakdown-plagued state-owned electric system to Luma Energy, a U.S.-Canadian joint venture. The electrical workers union, UTIER, and other opponents of the move organized protests across the island against the privatization and the union carried out several one-day strikes.
But Gov. Pedro Pierluisi and the U.S.-imposed Financial Oversight and Management Board, which has veto power over the U.S. colony’s financial decisions, refused to back down, claiming the change will lead to “reliable electricity.”
In fact their main goal is to deal blows to union power among electrical workers, squeeze more out of them and line the pockets of capitalist bondholders.
Luma insisted workers at Prepa, the old state-owned electric company, had to reapply if they wanted to keep their jobs, with no guarantee of being hired. Those rehired no longer get the same company pension contributions, health plan and other benefits guaranteed under the old contract with UTIER and other unions.
The system of electrical generation and distribution in Puerto Rico is on the verge of collapse, a byproduct of the plunder of the island’s labor and resources by the U.S. colonial rulers. Long before Hurricanes Maria and Irma decimated transmission lines in 2017 working people faced frequent blackouts.
“When I worked for Prepa, there were more than 5,000 workers,” retiree Raúl Laboy told the Militant from Humacao, Puerto Rico, June 29. “But they kept reducing the workforce. When someone retired, they didn’t replace them.”
From 1996 to 2015, the government sold billions of dollars in bonds, then laid off thousands of public workers and cut budgets to make debt payments. Sometimes they sold bonds solely to borrow money to pay the interest on previous bonds to wealthy bondholders!
The workforce at Prepa was slashed nearly in half. Routine maintenance wasn’t carried out and replacing deteriorating and obsolete equipment was not even considered. Prepa accumulated over $9 billion in debt, including $4.9 billion owed to the employees’ pension fund.
The government and the junta, as the fiscal board is called in Puerto Rico, blame mismanagement and corruption for this state of affairs. Turn the system over to profit-driven capitalists and things will get better, they claim.
Under the government’s 15-year deal with Luma, it will pay the company more than $100 million a year and give company bosses control of some $10 billion allocated by the Federal Emergency Management Agency to make long-delayed post-hurricane repairs.
Joint venture gets millions for a song
“Luma is getting millions for a song,” said Laboy. “But many workers are never going to see their pensions.” Laboy has been wearing his “Luma Out!” T-shirt everywhere he goes. “People constantly come up me to say they agree.”
“We opposed privatization,” UTIER President Ángel Figueroa Jaramillo told the Militant by phone from San Juan. “But we won a clause in the legislation that any worker who did not want to work for Luma could transfer to other government departments with their current wages.” It’s not clear how long those jobs will last. At the union’s urging, most workers chose to transfer or to retire. “Before Luma took over there were 800 linemen,” Jaramillo said. “At best 200 stayed.”
Luma says that they now have 440 linemen. Few believe Luma President Wayne Stensby’s claim that that’s “enough to deal with the blackouts and problems.” Since the first week of Luma’s takeover thousands have lost power due to breakdowns.
As the June 1 takeover approached, the electrical construction workers union Uitice — one of five unions that represented Prepa workers — shifted course, backed the takeover and set out to make a deal with Luma to represent all of the company’s workers. Bosses rapidly recognized Uitice as the exclusive union representative.
“Uitice officials had previously been part of the protests against the privatization,” Jaramillo said. Because of the lack of new construction, “Uitice only had about 400 members working. Their past gains were largely the result of struggles led by UTIER,” the largest union at Prepa, he said. Neither Uitice nor Luma responded to requests from the Militant asking for comment.
“For years the government has wanted to get rid of UTIER,” Juan Alverio told the Militant. Alverio is a leader of the Broad Front All Puerto Rico Against Luma, which has organized protests against the privatization in more than 70 towns. With the cuts to pensions and benefits bosses are driving through, workers at the company are going to need to defend themselves.
“This is a gift to the owners of Luma,” he said, describing the government’s deal with the company. “We are demanding that the contract be canceled.”
Before the privatization, electricity rates in Puerto Rico were already among the highest compared to ones in the U.S. Luma just announced a new rate hike.