Puerto Rico has struggled to recover from significant hurricanes in the past years — and a recent major construction dispute has shown just how difficult it is for companies to effectively assist in rebuilding efforts.
A September 1, 2021, filing by Sunergy Inc., LLC alleged major non-payment and breaches of contract against BCPeabody Construction Services LLC — with Sunergy claiming over $1.5 million from BCPeabody Construction. Not to be confused with the recently bankrupt Sunergy California LLC, Sunergy Inc. is a solar energy power company with its base in Saint Just, Puerto Rico.
According to the claim, a June 1, 2018, agreement contracted Sunergy to provide services to the Florida-based BCPeabody Construction in return for funds obtained from the Federal Emergency Management Agency (FEMA), which came directly from the island’s Public Assistant Program.
Sunergy notes that infrastructure was a major focus of the initiative between the two companies, saying that “funds of the multi-year contracts obtained by BCPeabody form [sic] FEMA were going to be used to provide services to the municipalities and private non-profits entities such as churches within the island of Puerto Rico to repair the damages suffered to their properties after [the] passing of Hurricane Maria in September 2017.”
Sunergy was originally contracted in order to establish a network of Puerto Rican workers qualified to work on repairs for BCPeabody, who were also meant to be paid with FEMA funds. As per Sunergy, during 2018 and 2019 the company’s hired personnel continued to contribute to the work required by BCPeabody, and had submitted invoices to the correct extents.
However, Sunergy alleges that even by the end of the 2018 fiscal year it had not been paid for the work or services performed.
Due to this, Sunergy notes that it terminated its agreement with BCPeabody at the end of 2019. According to the company, it was owed the full amount of its debts totalling $1,220.990.96 as early as April 1, 2021 (which included interest), and had yet to be paid this amount by the time of filing.
A significant part of this claim includes the amounts which Sunergy had to pay the personnel hired for BCPeabody’s efforts, as it notes that it was required to pay $65,773.86 to the US Department of Labor. The company claimed in its filing that this significantly impacted its ability to do business, “seriously [limiting] its economic capacity to continue the services provided by Sunergy to its clients.”
In total, Sunergy is claiming $1,586,764.82 in debts, former penalties, damages, and attorney fees.
The difficulties faced in the company’s efforts come at a significant time for solar energy throughout the entire United States and its territories, as 2020 saw a large number of homeowners throughout the country look to solar energy.
As per Levelset’s Elizabeth Gunto, nationwide manufacturers installed a record 137 gigawatts of new solar in 2020, while major residential home solar manufacturers Sunnova Energy and Sunrun saw their stocks jump by more than 300% and 400% in the same period. As W. John Berger, chief executive of Sunnova, said in an interview with the Chicago Tribune, “We’re having discussions as a management team about how much growth we can handle. I’ll take that problem any day of the week because I’ve had the other problem, as well.”
Of course, this has led to dangerous positions even still, as many companies have been unable to handle the significant growth. Sunnova Energy and Sunrun “lost a combined $500 million” even despite their dramatic stock increases, with Gunto noting that “that the industry’s rapid growth and the large upfront costs that installations demand are to blame for some of these losses. The collective cost of operations and purchases of solar systems of Sunnova and Sunrun cost $1.3 billion in cash last year.”
Hurricane recovery efforts have led many towards solar energy, providing new possibilities for Puerto Rico’s infrastructure and solar providers
The presence of Sunergy in the country’s recovery efforts is indicative of the new directions that people have taken to deal with the infrastructure problems of the island amidst numerous problems getting adequate support from the federal government.
With the US territory still in the process of recovering from 2017’s devastating Hurricane Maria, residents have turned to self-supported efforts in order to focus on recovery, and many have looked to renewable energy to combat some of the island’s biggest problems: its infrastructure.
“Old San Juan was founded almost 500 years ago by the Spaniards,” said Eddie Ramirez, owner of San Juan’s Casa Sol bed and breakfast. “The culture, the art and especially the architecture is very old. All the homes are completely different even though they were built in the same century. And here in Puerto Rico, we just adapt the buildings to our technology…It just takes too long for the government to actually act. So, you have private citizens taking control of the situation.”
Residents are well aware of the island’s delicate electrical grid, especially as the Puerto Rican Electrical Power Authority announced outages and limited electrical generation capabilities going into September 2021. Since the damages caused by Hurricane Maria, weekly outages have become a common issue, and major repairs to the electrical grid have yet to be finished.
“Nowadays, after Hurricane Maria, the infrastructure is very fragile,” said Homar Torres, a Puerto Rican energy consultant and solar energy installer. “We have power outages every day, where I live we have like three to four power outages per day.”
At the time of the hurricane, the Puerto Rican government estimated $100 billion in damage to the island — a number that has left the island in a difficult place for recovery. “Nobody had power, telecommunication towers went off,” Torres noted. “It was very critical. Some places had no power for six months.”
A major part of this has been the lack of federal support. “As a community social worker, I can tell you that Puerto Rico’s recovery, if it can be called that, didn’t come thanks to the government,” said resident Angel Perez in 2020. “It came from nonprofit associations, it came from the neighbors themselves. It came from foundations. It came from the hands of other people who supported the families that suffered the most.”
“It just takes too long for the government to actually act. So, you have private citizens taking control of the situation.”
– San Juan Businessowner Eddie Ramirez
People have long lamented the issues that have kept federal funds out of the hands of those who need it most — such as many of the issues with FEMA funding being kept from vulnerable populations, or being misused such as in Sunergy’s case. The recent jump in willingness to explore independent means to repair and take pressure off of infrastructure may well make these struggles less important going forward in Puerto Rico.
In fact, a large number of residents have already moved towards adding solar energy, making it a significant growing market in the island’s energy system. “About two percent of the population uses solar energy,” Homar Torres noted. “Before Maria, it was 1%. After Maria, it increased.” With 2019 US Census data, that constitutes close to a 32,000 person jump, a significant number for a fairly small territory.
“You produce energy right where you need it,” Torres added. “You don’t depend off [sic] towers and infrastructure. You produce energy right where you need it.”