The Puerto Rico Public Irrigation Act of 1908 established the South Coast Irrigation Service to create reservoirs for improved agricultural irrigation. Although small private power grids had existed since 1893, there was no public electricity service from a central generation source. These early private networks were mostly limited to lighting projects. In 1910, the three largest energy monopolies were the Canadian-owned Porto Rico Railway, Light and Power Company, U.S.-owned Ponce Electric Company and Puerto Rican-owned Mayagüez Light, Ice and Power Company.
In 1915 the government of Puerto Rico embarked on construction projects for its own facilities to transmit, distribute, and sell energy derived from reservoirs created for irrigation projects. The South Coast Irrigation Service was the first government agency to generate electricity for the public by harnessing the energy potential of the water retained behind the dams created by the irrigation system. The Carite 1 plant was the first hydroelectric plant owned by the government of Puerto Rico and 85% of its power was used to pump water for irrigation of sugarcane fields and for industrial uses. Only 15% of its power was dedicated to residential consumption.
In 1926, a new government agency — the office of Water Resources Use — under the Department of the Interior was created to administer and operate irrigation systems, public electricity generation and electric facilities. Headed by influential engineer Antonio S. Lucchetti Otero, the new agency accelerated the construction of electric facilities with funds from the Puerto Rico Reconstruction Administration (PRRA). The PRRA was created in 1935 to reduce unemployment in Puerto Rico and develop an economic reconstruction program with budget of more than $82 million (equivalent to $1.6 billion today) of which a portion was used to electrify the island. Engineer Lucchetti was appointed director of the Rural Electrification Program and designed seven modern hydropower projects. Rural electrification, including hydropower projects, cost $9.2 million (equivalent to $182 million today) and was the largest expenditure of the public works program accounting for approximately 28% of the PRRA construction budget.
On March 30, 1937, the government of Puerto Rico purchased the Ponce Electric Company which at the time was the second largest private utility on the island. This was the first time that urban electricity distribution fell under government control. The River Sources Authority was created on May 2, 1941 uniting the functions and assets of the office of Water Resources Use and the Puerto Rico Irrigation Service Administration, and Lucchetti was appointed its director. In 1942, through temporary wartime expropriation by the federal government, the operations of the Porto Rico Railway Light and Power Company and the Mayagüez Light Power and Ice Company were integrated into the River Sources Authority. In 1945 the River Sources Authority purchased both companies creating a single authority to operate the main electricity systems on the island.
Between 1913 and 1951, the government of Puerto Rico and private enterprise built 11 reservoirs for agricultural use. Between 1907 and 1952, 15 reservoirs were built for hydroelectric generation. Between 1946 and 1966, seven reservoirs were built for public electric and water supply for a maximum capacity of 70 megawatts (1943-1944). According to data from 2019, the installed capacity of hydroelectric generation in Puerto Rico is 94 megawatts. On May 30, 1979, through Law Number 57, the River Sources Authority changed its name to the Puerto Rico Electric Power Authority (PREPA) because electricity from hydroelectric sources was insufficient to meet the island’s electricity demand and PREPA shifted focus to thermoelectric generation. At this time, oil and its derivatives constituted the main energy source producing 98% of the electricity consumed on the island, while electricity generated by hydroelectric sources represented only 2%.
In 1981, the Puerto Rico Electric Power Authority acquired the last electrical system (owned by the Municipality of Cayey) consolidating all electricity systems of Puerto Rico under a single entity and turning the Puerto Rico Electric Power Authority into an energy monopoly. On August 14, 2019, the first electric cooperative in Puerto Rico — the Cooperativa Hidroeléctrica de la Montaña — was formed with the mission of rescuing, rehabilitating and managing the hydroelectric plants of the Cordillera Central that represent a heritage of the people of Puerto Rico. Hydroelectric generation was the seed that created Puerto Rico's electricity system.
The Caonillas Hydroelectric System, built between 1942 and 1953, is one of the most complex and extensive in Puerto Rico. The chain of reservoirs that forms the Caonillas Hydroelectric System is located between the municipalities of Adjuntas and Utuado. It consists of five reservoirs (four of them large) with a combined original storage capacity of 47,000 acre-feet of water, as well as two hydroelectric plants with a total initial installed capacity of 24 megawatts.
The five reservoirs that form the Caonillas system are Lake Adjuntas, Lake Pellejas, Lake Viví, the Jordan Reservoir, and Lake Caonillas. Although some reservoirs are referred to as "lakes," Puerto Rico does not have natural lakes, therefore it is more accurate to describe all of these bodies of water as reservoirs. The reservoirs are interconnected by approximately five miles of tunnels to transport water from one reservoir to another until it reaches Caonillas. Hurricane Georges in 1998 caused extensive damage to the infrastructure of this system. Currently, the Caonillas 1 and Caonillas 2 hydroelectric plants are out of service. The Caonillas Reservoir system is an integral part of the North Coast Aqueduct.
The Caonillas reservoir was built in 1948 to store water for hydroelectric power production. The Caonillas 1 plant entered service in 1949 and has an installed electricity production capacity of 20 megawatts. The Caonillas 2 plant entered service in 1950 and has an installed capacity of 4 megawatts. These plants are in the Caonillas Abajo neighborhood of the Municipality of Utuado, about 3 miles east of the urban area. This reservoir is part of the Rio Grande de Arecibo river system and has a natural catchment area of 49 square miles.
Hurricanes Hortense (September 1996) and Georges (September 1998) accumulated about 5,294 acre-feet of sediment representing more than half of the total sedimentation that has occurred in the reservoir since its construction in 1948. The sedimentation accumulated by Hurricane Maria (September 2017) has not yet been precisely calculated. Flooding caused by Hurricane Georges caused damage to the penstock of the Caonillas No. 1 Plant, which is not currently used for hydroelectric production. Flooding caused by Hurricane Maria entered the Caonillas No. 2 hydroelectric plant, damaging its machinery and generators. Currently this reservoir is not used for electricity generation. The reservoir of Caonillas No. 2 feeds the North Coast Aqueduct , since its waters are tributaries to the Dos Bocas reservoir. The North Coast Aqueduct is the largest source of drinking water on the island and transfers up to 100 million gallons per day to the Northern Region from Arecibo to the San Juan Metropolitan Area, including Caguas, Carolina and Trujillo Alto.
Construction on the Dos Bocas Hydroelectric System, funded by the Puerto Rico Reconstruction Administration (PRRA), began in 1937 and concluded in 1942. The Dos Bocas Hydroelectric System is in the Rio Grande de Arecibo basin in the Municipality of Utuado. This system has a hydroelectric plant with an original capacity of 18 megawatts, which discharges to the Rio Grande de Arecibo. The Dos Bocas reservoir is one of the largest on the island, with a concrete dam 188 feet high and 1,317 feet long, creating an original storage capacity of 30,400 acre-feet of water. Since 1998, the Dos Bocas reservoir provides water for hydroelectric production operated by the Puerto Rico Electric Power Authority and potable water for the North Coast Aqueduct operated by the Aqueduct and Sewers Authority (AAA).
After the passage of hurricanes Hortense (September 1996), Georges (1998) and María (2017), the storage capacity of Dos Bocas was drastically reduced. The sedimentation caused by these hurricanes, together with insufficient maintenance and lack of continuous operation, impairs the usefulness of the Dos Bocas reservoir. The sedimentation accumulated by Hurricane Maria (September 2017) has not yet been calculated precisely, but it is estimated that this reservoir has lost 72% of its capacity due to sedimentation.
The sun and the waters of the sky are here made to operate for the people. This is pure gain. Here the energies of people are multiplied; here, invisible and tireless servants work for all those whom transmission lines can reach. We begin here something that is a miracle and that miraculously can continue into the distant future. It was built with public funds, granted with foresight and wisdom; it will be managed by a public authority. It will produce continuous returns. Alongside them, its costs will recede until they are barely visible. No one will profit from it; but all Puerto Ricans will share its services. I dedicate to the use of our people this source of benefits. It was built by them and no one shall ever take it away.
Governor Rex Tugwell