Updated: 2:15 p.m. ET
(Bloomberg) -- Puerto Rico declared a state of emergency Thursday as authorities worked to restore electricity to almost 1.5 million utility customers a day after a power-plant fire caused widespread blackouts.
Governor Alejandro Garcia Padilla, who announced the state of emergency on his Twitter account, said about half of the island’s main utility clients should have electricity by Thursday afternoon. Power to some 130,000 users had been restored by early morning.
“The expectation is that by tomorrow service will be restored,” he said during a press briefing in San Juan. “Because the system is so old, setbacks could occur.”
|Fire at substation
The Puerto Rico Electric Power Authority said on Wednesday that a blaze at a substation of the Aguirre power plant in the southeast of the island triggered the outage. The fire at the power plant, which generates about 30 percent of the island’s electricity, tripped a safety mechanism that automatically shut down the system, bringing down two 230,000-volt transmission lines, Garcia Padilla said.
The outage forced the government to close schools and cancel classes at public universities. It also knocked out water service for 340,000 customers of the Aqueduct and Sewer Authority.
|$9 billion debt
The blackout comes as the utility known as Prepa, its bondholders, insurance companies and fuel-line lenders are working on a deal that would reduce the utility’s $9 billion debt load through a bond exchange. The Aguirre power plant faced the risk of fines and closure earlier this year after it failed to install scrubbers needed to meet federal standards for toxic emissions.
Prepa is the largest U.S. public power provider by customers and revenue, according to the American Public Power Association. The planned debt restructuring would allow the utility to modernize its system and reduce its reliance on oil, which produces most of its electricity.
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