Puerto Rico's PREPA gets energy industry veteran Higgins as new CEO
NEW YORK (Reuters) - Puerto Rico’s bankrupt power authority, PREPA, has appointed Walter Higgins as its new chief executive officer, the utility said on Tuesday, on the six-month anniversary of Hurricane Maria’s destruction of the island’s power grid.
Higgins was CEO of Bermuda-based Ascendant Group Ltd from 2012 to 2016, and has 40 years of experience in energy industry management roles, PREPA said in a statement. He will succeed interim Executive Director Justo Gonzalez.
Maria struck Puerto Rico in September as its most destructive storm in 90 years, cutting electricity to all 3.4 million of the U.S. territory’s residents. Six months later, tens of thousands remain in the dark.
The storm proved the downfall of ex-CEO Ricardo Ramos, who resigned in November after a U.S. congressional committee launched a probe into PREPA’s awarding of a no-bid, $300 million repair contract to tiny, Montana-based Whitefish Energy Holdings.
Governor Ricardo Rossello later canceled the contract, then, in January, announced plans to privatize PREPA over the next 18 months.
The utility was crippled even before Maria and in bankruptcy to shed some $9 billion in debt. Its weak infrastructure, which not been modernized in years, was no match for Maria’s 155-mile-per-hour winds.
Higgins inherits an entity long beset by frequent management turnover and a staff that shrank from more than 8,600 people in 2012 to around 6,000 last year, a reflection of Puerto Rico’s broader population exodus as it battles a protracted recession.
As it works to recover from Maria, Puerto Rico is also working its way through the largest bankruptcy in U.S. government history, with $120 billion in bond and pension debt, including PREPA’s debt.
Reinventing PREPA as a nimbler, partly privately-run company, and shedding its debt, is a key piece of that process.
Higgins, a former U.S. naval officer, has held management roles at Sierra Pacific Resources, Atlanta Gas Light Company and Portland General Electric Company, among others, PREPA said in Tuesday’s statement.
At Ascendant, whose BELCO subsidiary served as the sole power utility in Bermuda, Higgins navigated three hurricanes and led an initiative to restructure electricity rates on the island, the statement said.
“We have a real opportunity here, not just to restore power but to eventually deliver lower-cost, reliable power for all the citizens of Puerto Rico,” Higgins said in the statement.
Ernesto Sgroi Hernandez, who chairs PREPA’s governing board, called Higgins “a distinguished leader and industry visionary.”