Puerto Rico’s state senate has taken steps to diversify its energy industry by passing a law on 27 August to provide a framework for co-ops in the sector.
The legislation aims to transform the territory’s energy sector and help communities become more resilient by forming co-operatives.
Under the rules, an energy co-op will require a minimum of five member before setting up. People will be able to develop co-ops to generate energy for themselves, as well as distribute it or sell it to the grid. The law mentions that electric co-ops will also need to ensure they charge fair tariffs.
The general law of co-operative societies has also been amended to include renewable energy co-ops.
In a report to the senate, the government’s energy department said the changes are a response to Puerto Rico’s financial crisis and the need to rebuild after Hurricane María, which devastated the island last September.
The island’s renewable energy association says the law should be used to develop renewable energy co-operatives rather than fossil fuel co-ops.
The Coalition for Economic Co-operation of Puerto Rico also welcomed the law, which it sees as an opportunity to develop a decentralised energy production and distribution system.
Larry Seilhamer, president of the special energy commission, said: “In the current environment faced by Puerto Rico, it is necessary and worthy to enable communities to explore alternatives to generate, transmit and distribute their energy. In this sense, the energy public policy needs to grant communities more access to this essential type of service. The co-operative model is ideal to achieve this goal and, thus, contribute to the resilience of our communities.”
In the run-up to the vote, the commission prepared a report on the state of the energy sector and the role co-ops could play in it. The report highlights how in the United States, of which Puerto Rico is an unincorporated territory, energy co-ops maintain 42% of the energy distribution lines. The sector provides services to 42 million people in the USA.