By Daniel Bases
NEW YORK (Reuters) - Puerto Rico said on Monday it would sell off its troubled power utility to the private sector, saying the process could take roughly 18 months to complete.
The Puerto Rico Electric Power Authority (PREPA) has yet to recover fully from the devastation wrought by Hurricane Maria, which in late September knocked out power to the entire island and left all 3.4 million residents of the U.S. territory in the dark.
"The Puerto Rico Electric Power Authority (PREPA) has become a heavy burden on our people, who are now hostage to its poor service and high cost. What we know today as the Puerto Rico Electric Power Authority does not work and cannot continue to operate like this," Governor Ricardo Rossello said in a statement.
Less than 64 percent of homes and businesses are receiving power, according to the latest data from the U.S. Department of Energy.
Rossello described how the process for breaking up the company would occur in three phases, calling it a move toward a "consumer-centered model."
Phase one consists of defining the legal framework via legislation. Phase two will be evaluating bids, and phase three will be "the terms of awarding and hiring the selected companies that meet the requirements for the transformation and modernization of our energy system will be negotiated."
PREPA has been hampered by years of underinvestment, frequent turnover in management and inefficient collections that forced it to go deeply into debt. The utility incurred about $9 billion in debt before declaring bankruptcy in July.
An ad hoc group of investors holding much of the utility's $9 billion in bonds had no immediate comment.
Given PREPA is currently trying to work its way through bankruptcy and all of the island's financial dealings must go through the federally appointed Financial Oversight and Management Board for Puerto Rico, selling off PREPA's assets could be a long process.
The Oversight Board did not have an immediate comment when contacted by Reuters.