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irisblue

(32,980 posts)
Fri Sep 22, 2017, 08:27 PM Sep 2017

Peurto Rico power grid question & municipal bonds

I do know that the terrority has been in financial problems that worsened during the Great Recession in 2008 and on.Their muni bonds are treated as junk bonds. I know that the PREPA controlled the power grid, used oil to generate a substantial amount of the electricity.
If the recent power grid is so damaged that it is not available for months, why wouldn't solar & wind muni bonds be considered a good bet, given that an American terrority simply cannot be with out power for any extended period of time.

I don't know what I don't know & am looking for an explanation and resources for me to learn more.

Thanks in advance.

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Peurto Rico power grid question & municipal bonds (Original Post) irisblue Sep 2017 OP
Because of the financial standing of PR, nobody will buy their bonds. That is just one issue. tonyt53 Sep 2017 #1
After the recent hurricanes NobodyHere Sep 2017 #2
Jeff Masters touched on the grid problems today malaise Sep 2017 #3
They can issue bonds snowybirdie Sep 2017 #4
article from slate on the infrastructure/privatization irisblue Sep 2017 #5
 

NobodyHere

(2,810 posts)
2. After the recent hurricanes
Fri Sep 22, 2017, 08:49 PM
Sep 2017

I think you'll have trouble convincing people that PR bonds are a good bet

malaise

(269,045 posts)
3. Jeff Masters touched on the grid problems today
Fri Sep 22, 2017, 08:50 PM
Sep 2017

Solar should be a good investment -PERIOD

From Masters
https://www.wunderground.com/cat6/more-havoc-category-3-maria-plows-northward
<snip>
In Puerto Rico, damage is still being assessed after flash flooding that continued through Thursday. It will be a daunting task to get the power back on across the territory. Even before Maria, Hurricane Irma had knocked out roughly 70 percent of the island’s grid. The head of the Puerto Rico Electric Power Authority told CNN that “the system has been basically destroyed” and that it could take up to six months to complete repairs. Puerto Rico’s power grid has been weakened by deferred maintenance, in part an outgrowth of manufacturing losses and mounting territorial debt that have left the power authority bankrupt. Moreover, as noted by Quartz, Puerto Rico’s grid is almost completely reliant on fossil fuels (mainly fuel oil), which provide 98% of electricity in Puerto Rico vs. 65% in the 50 U.S. states and just 2% in Costa Rica. In the wake of Hurricane Irma, some homes and communities in Florida with solar power were able to restore their electrical service before repairs to the larger grid were complete, according to Inside Climate News. The largest oil-fired power plants in Puerto Rico are in the south, notes the Los Angeles Times, and there may be heavy damage to the transmission lines that bring power to the north. Puerto Rico was declared a federal disaster zone on Thursday, which will enable residents and the local government to apply for assistance from FEMA. With any luck, the rebuilt power grid will be far more robust than the aging one was.

Life over the coming weeks—or months in some cases—will be a grueling ordeal for many Puerto Ricans, especially those who lack generators. Most of the island’s wireless cell sites have been knocked out, and the patchy grid will further complicate phone usage. Weather Underground’s 10-day outlook for San Juan has lows near 80°F and highs between 85°F and 90°F throughout the period. Very high dewpoints will put the heat index near or above 100°F each day. The risk of heat-related illness or death rises greatly when there is no relief from very high temperatures around the clock for multiple days.

snowybirdie

(5,229 posts)
4. They can issue bonds
Fri Sep 22, 2017, 08:50 PM
Sep 2017

But they will have to pay interest rates way above current levels. Very costly, but there usually are enough speculators who would take a chance. Might be a good bet in this market

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