By Sam DeLong
After thirteen named storms, including eight hurricanes, the 2017 Atlantic hurricane season has been ranked among the most active storm seasons in recorded history. When Hurricane Maria reached the shores of Puerto Rico, its winds blew in excess of 155 miles per hour as a category 4 hurricane, stretching nearly 300 miles in diameter. The strongest storm to hit Puerto Rico in 85 years, Maria left total devastation in its wake. Three weeks later, 85% of the island still remains without power. The massive outages are not due to destroyed power plants, but are the result of the destruction of an estimated 80% of the islands power transmission lines. The dated systems could not handle the severe wind, rain and toppled trees and now, crews must work day and night to restore power, line by line. In addition to the physical barriers, the Puerto Rico Electric Power Authority faces serious financial constraints. In July, the New York Times reported that the government-owned company is 9 billion dollars in debt.
On October 5, 2017, what started as a nonchalant comment on Twitter, turned into an eye-opening multi-million dollar effort towards a solution. Since cofounding and selling PayPal for $1.4 billion in 2002, Elon Musk continues to revolutionize every industry he can touch. After stepping down from President Trump’s White House advisory council in June, Musk has thrust himself back into the political sphere with his eyes set on Puerto Rico. After a follower made an almost rhetorical suggestion to Musk and his team at Tesla, Musk seemed up for the challenge as he expressed the feasibility of implementing Tesla power systems to restore Puerto Rico’s grid. Not shortly after, Puerto Rico’s governor firmly took hold of this offhanded, massive proposal and now multiple shipments of Tesla Powerpack battery systems have arrived in Puerto Rico symbolizing Musk’s most recent entrepreneurial undertaking.
Not all are on board with Musk’s big ideas. Writing for the The Hill, Michael Steel expressed his appreciation for the “helping hand” lent by social influencers like Musk, but questioned the green behind the green curtain. Steel is worried about private sectors mingling with otherwise government-sponsored infrastructure, as well as challenges concerning the sources of needed funding and the repayment obligations in Puerto Rico’s already volatile financial situation. Steel and others feel that any government issued bond rings hollow as a form of compensation because of Puerto Rico’s financial shortcomings.
Still, other commentators are comfortable looking past Steel’s worries. CNBC writer Jake Novak calls Musk’s effort a “game-changer.” Using Hurricane Katrina as an example, Novak highlighted shortcomings of federal relief in recent decades and praised the efforts made by corporate entities. While these efforts often serve as business ventures for the corporate undertakers, Novak believes such a charitable business model ought to be considered “a return to America’s historic roots.”
Whether this is a wise investment opportunity for Musk and Tesla is yet, but soon to be seen. While it appeals to the hearts and minds of most, the fate Tesla’s stock seems to be more heavily reliant on the fate of the company’s new affordably priced ‘Model 3’ car. In any event, the undeniably positive result of Musk’s big plan is that Puerto Rico is continuing to receive help and media focus.
Student Bio: Sam DeLong is a second-year student at Suffolk University Law School. He is pursuing a J.D. as well as an advanced degree in taxation.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.