The Weekly Journal - Wednesday, March 16, 2022

Wednesday, March 16-22, 2022 - // no. 151

Puerto Rico and the Caribbean

www.theweeklyjournal.com

Medical Cannabis now a saturated market P7 Shrinkflation: beware of smaller packaging P9 LUMA prioritizes on cleaner energy P10

Puerto Rico’s woes

are not over Debt Adjustment Plan will need to be renegotiated sooner or later

A

Juan A. Hernández, The Weekly Journal

NFTs at the intersection of fashion and Technology P14

jhernandez@wjournalpr.com

s Puerto Rico’s population is decreasing and its profile is increasingly getting older, there could be a significant impact on the recently approved Debt Adjust Plan (DAP) in terms of the revenue the government has estimated to comply with the negotiated terms of service to the debt.

“As Puerto Ricans continue to migrate and the population continues to grow old, the problem is not so

much that the population is diminishing, but that those leaving are working-age adults that would have been paying taxes. So, as the population continues to migrate it would become more and more difficult to comply with the responsibilities acquired, in terms of the estimated revenues,” said economist Adrian Alós, from Abexus Analytics, a business intelligence and analysis group.

Alós admitted that such a demographic change must have been taken into consideration during the debt renegotiation process, but pointed out GO TO PAGE 4

The Weekly Journal > Wednesday, March 16, 2022 > 2

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/ Wednesday, March 16, 2022

a week in review The Online Portal Promoting Puerto Rican Culture and the Arts The Institute of Puerto Rican Culture (ICP) officially launched a new digital platform for exploring upcoming events in Puerto Rico. The CulturalPR.com portal allows users to both promote and search for events, placing all the island’s activities in one place for easier access and discoverability. Additionally, CulturalPR.com features a news section and a merchandise shop (together with Brands of Puerto Rico).

Search by category, location, or date to find an event to fit your interests and schedule and get to know the entire island. Categories are broken down by family events, educational, music, theater, dance, exhibitions, crafts, literature, film, festivals, heritage, gastronomy, cultural routes, nightlife, Puerto Ricans in the world, and the ICP’s own recommendations and activities.

SuperMax Streamlines Delivery Operations

Coors Light to Eliminate Plastic Rings

SuperMax, a local grocery chain, will open the island’s first online shopping and distribution center. The center, funded by the Capital Entrepreneurship initiative of the Municipality of San Juan, involved an investment of $2.4 million while also creating 200 jobs. In the logistics and distribution center, employees select, pack, and deliver customers’ requested items all in a period of no more than two hours. This center will cover much of the San Juan and Guaynabo areas. “At SuperMax, we are committed to providing the best service Our initiatives and innovations seek to meet the needs of our customers and, in turn, result in new jobs and increased economic activity for the country,” said José Revuelta, President of SuperMax.

Globally, Coors Light will eliminate plastic rings packaging from their products. Molson Coors is set to become the largest beer brand in North America to move away from plastic rings. The company will invest $85 million in this step towards more sustainable packaging. Fully recyclable and sustainably sourced cardboard-wrap carriers will replace the plastic ring packaging later this year. In 1959, Coors revolutionized the beverage industry when it debuted the two-piece recyclable aluminum can. Despite the five years and millions invested in the development of the recyclable can, Coors did not patent the new packing. Instead, they actively encouraged other beverage makers to embrace the recyclable can, leading to a recycling revolution.

Powered BY El Vocero de Puerto Rico, 1064 Ave Ponce de León 2nd floor San Juan, PR Postal Address: PO Box 15074, San Juan, PR 00902

President Salvador Hasbún shasbun@elvocero.com

VP of Accounting Félix A. Rosa frosa@elvocero.com

Human Resources Director Arlene Rolón, PHR arolon@elvocero.com

Vp of Marketing and Business Operations Michelle Pérez Miperez@elvocero.com

VP of Production Eligio Dekony edekony@elvocero.com

VP of Editorial Content Juan Miguel Muñiz Guzmán jmuniz@elvocero.com

Multi-Platform Graphic and Technology Director Héctor L. Vázquez hvazquez@elvocero.com

Phone: 787-622-2300, 787-721-2300

Multi-Plataform Digital Director María Arce marce@elvocero.com

Customer Service: 787-622-7480

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CONTINUED FROM PAGE 1

were willing to spend their money here, which evidently has not had the desired effect. I’m that if the demographic changes go beyond a convinced no one expected 20-22ers would have certain point, “revenue estimates could very well a significant effect in population or migration be affected.” patterns,” he said.

Such a scenario will put the Commonwealth Alós mentioned that so far, the only government in a tighter situation, with the legislation approved to keep people from possibility of having to leaving the island was the tax consider reducing costs or incentive granted to doctors. impose new taxes to cover The economist argued the for the loss of revenue. With measure failed because those Puerto Rico still experiencing benefiting from it were the a net negative migration doctors who had no intention Argentina has had nowadays, this is a possible to move out from the island. three renegotiations scenario and the government The other legislation in this century. is aware of it. approved was Act 135 from While the government is still 2014, which granted people in the process of engineering 26 years old or younger, a tax a legislative solution, it has exemption for the first $40,000 already implemented some earned and a series of other measures to retain people and attract new incentives if they decided to develop a business. residents, whether they are Puerto Ricans that “The problem with that law was that people have already left the island or foreigners. didn’t know it existed, or only considered it a Questioned about the limited effectiveness $40,000 exemption until age 26. But the most of Acts 20 and 22 in terms of attracting new import part of the law was about the benefits residents to the island, Alós argued that granted to a youth, if he or she wanted to legislation has been misunderstood. establish a business –a reduced municipal tax “That was not a legislation to attract new rate, earned dividends– but that are very difficult residents but to attract capital, people that to get,” Alós mentioned.

In fact,

…as the population continues to migrate it would become more and more difficult to comply with the responsibilities acquired, in terms of the estimated revenues.

Adrián Alós, Economist

For the economist, the only alternatives left for the government to attract people are those that directed to individuals willing to come to Puerto Rico to work or study.

Regarding these, the government would need to let people abroad know about the advantages the island offers to those groups: students and people of working age.

Not Everybody Is The Same

For demographer Eduardo Burgos, the problem

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In fact, While the people opting to stay in Puerto Rico could still be active on the island’s labor market, the fact is that they are part of the older segment of the population.

is the emphasis on the search for a “silver bullet solution”. Instead of treating the population as a group, what needs to be done is to divide it into segments to better understand the needs of the different subgroups.

“The strategies to retain a population that is already productive, that has family and social ties should not be the same as those used for a group of university students that are already in debt, that are convinced there are no jobs with competitive salaries, that are convinced the real estate market is not accessible to them… We need to segment these populations to identify efficient strategies,” argued Burgos, while pointing out that social expectations for these groups are not the same.

Those Who Stay

While the people opting to stay in Puerto Rico –whether they prefer not to leave or have no other alternative– could still be active on the island’s labor market, the fact is that they are part of the older segment of the population. Thus, this population requires more services from the government –medical services, transportation, housing, etc.– because they usually have limited and fixed incomes.

If the government is unable to collect the estimated revenues because of diminished labor force, it could eventually need to cut down services.

Out Of The Frying Pan?

The strategies to retain a population that is already productive, that has family and social ties, should not be the same as those used for a group of university students.

Eduardo Burgos Demographer, Abexus Analytics

“Of course, that is not something we will see in a short or medium term, particularly because of the current influx of federal funds. But when that money is spent… we cannot expect a hurricane to hit us every six or ten years and get millions in federal money,” Alós said.

The situation then begs the question whether Puerto Rico will be able to comply with all its new obligations when the federal funds are all spent.

While the government cannot use federal funds to pay its debt, it can use them to invest in Puerto Rico’s local economy, which in turn will provide greater revenues.

For Alós, history demonstrates that whenever a state or a country is in the process of repaying its debt after bankruptcy, said jurisdiction ends up revisiting its previous agreements and renegotiating a new adjustment. “Take for instance the case of Argentina. They’ve had three renegotiations in this century, since 2000. This is something very common. The situation changes, priorities change. You also have to consider that most of these bonds have a 30-year maturity, therefore, the possibility of us having to renegotiate is very high,” he estimated.

The economist likened this possibility to the situation with the Puerto Rico Electric Power Authority (PREPA).

“PREPA had negotiated a plan in 2019 and now the Governor says things have to be renegotiated because of the current situation and how everything has changed since 2019. That could easily happen with any of the agreements we have already signed with the bondholders.

For Alós, the solutions heralded by the government’s DAP are only temporary.

“Everything is according to our current conditions. If these conditions change due to, let’s say another devastating hurricane and there is another 300,000 migration –something that while extreme is entirely possible– we will definitely need to renegotiate,” Alós anticipated.

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Future revenues will impact PREPA’s debt adjustment plan Renewable energy sources would potentially reduce the corporation’s earnings

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Juan A. Hernández, The Weekly Journal

ower co-generation and the Puerto Rico Electric Power Authority’s (PREPA) move to renewable energy sources would potentially reduce the cost of energy production on the island and the corporation’s future revenues, thus impacting its debt adjusting plan.

“We operate based on a series of assumptions, and one of those assumptions is how much revenue we are going to have by 2030, by 2040 and by 2050. And then, how are we going to make the payment I said I would in 2022,” said Manuel Cidre, Secretary of the Economic Development and Commerce Department (DDEC, for its Spanish acronym) about the recently canceled negotiations on PREPA’s debt adjustment plan.

Cidre made his remarks during the groundbreaking ceremony of Stryker’s new cogeneration power plant in Arroyo. Once operational, the plant will provide Stryker, a medical and surgical instruments manufacturer, 100% of its energy needs, saving the company about a quality of energy we don’t have… it is about $1.4 million annually. cogeneration, solar power, wind power… we seek “As long as there is a debt, which could greater affordability for energy many people don’t be somewhere around $7 billion after being have, and of a better quality,” Cidre said. adjusted, and after a series of investments from For Cidre it is of utter importance to understand these industries geared toward reducing energy that five years from now PREPA’s consumption and dependency revenue from billing are not from PREPA, I’m convinced going to be the same as today. that these conditions need “Therefore, we need to adjust to be brought up during the the debt accordingly and we will negotiations. What effects have to adjust how much is to be the proliferation of these Stryker will destined to service that debt,” he cogeneration plants will have on save about $1.4 said.

PREPA? How much of its debt million annually in “I’d like to think that the will PREPA really have to repay?,” electric costs. government representatives questioned the Secretary, before sitting at the negotiation’s table agreeing with Governor Pedro are thinking just about the same Pierluisi on his decision to halt as I do, and they will bring it to PREPA’s debt negotiations. the table when the time comes,” Cidre said.

While Cidre acknowledged the purpose of The DDEC Secretary considers that as part of moving to renewable energy sources is to cut the negotiations, the powers that be should take down energy production costs, he emphasized “it into account the particularities of a future with is not only about that.” less energy consumption. “We need to consider “It isn’t just about affordable energy, but

In fact,

We operate based on a series of assumptions, and one of those assumptions is how much revenue we are going to have by 2030, by 2040 and by 2050.

-Manuel Cidre, Secretary, Economic Development and Commerce

what is going to happen when the 23 megawatts cogenerating plant in Coopervision goes online, when Stryker’s two megawatts plant goes online, when Baxter’s plants in Aibonito and Guayama go online… What’s going to happen then?”

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Medicinal cannabis: a viable business in a saturated market

particular operational costs, but our calculations point to 1,500 to 2,000 patients in order for the business operation to be viable. You can imagine the situation our members are facing with just a fraction of the patients needed to keep their businesses open,” said Aleczer. The industry’s Juan A. Hernández, The Weekly Journal situation is further compounded by the fact that the Regulating Board has been issuing licenses for he industry of medicinal cannabis has reach its saturation new cannabis dispensaries without an apparent policy for the development of the industry. point in Puerto Rico and “This is a new industry that has been developing dispensary and pharmacy in a somewhat organic fashion, despite the fact owners are suffering from that it is a much regulated industry,” Vélez said. dwindling patients and loss of “But the Board itself is the first sales putting not to comply with the regulations at risk an estimated $500 million imposed by Act 42 from 2017, which total investment. requires it to publish an annual According to a study report detailing the conditions of the commissioned by the Members of medicinal cannabis market. Not a the Medicinal Cannabis Industry single report has been published by As the industry (MICaM, for its Spanish acronym), the Board in the five years since its stands now there is the number of certified medicinal inception in 2017.” an average of 432 cannabis patients has dropped With fewer patients, revenues patients for every from 130,000 in mid-2020, to 119, from sales have also dropped licensed dispensary 664 as of January 2022, while the significantly. on the island.

That number of cannabis dispensaries According to Vélez, medicinal is a drop of about has continued to increase. cannabis sales topped last summer 50 percent from “Since the beginning of the with about $22 million monthly. By the all-time high industry in 2017 with the passing January 2022 sales had dropped to of 908 patients in of Act 42, the Cannabis Regulating $10 million.

December 2019.

Board has issued 277 licenses “Average monthly sales per for cannabis dispensaries. When dispensary dropped from $133,660 in taking into consideration the 2020, to $39,423 last January,” said Vélez. number of certified patients, it is inevitable to conclude that there is a saturation of the market,” argued Gustavo Vélez, founder of Recommendations Intelligent Economics advisory firm, and author of To avoid the collapse of the industry, Vélez the study commissioned by MICaM. As the industry stands now there is an average of 432 patients for every licensed dispensary on the island. That is a drop of about 50 percent from the all-time high of 908 patients in December 2019.

More licenses are issued as the number of patients drops

T

Less Patients, Less Revenues

In fact,

When compared to the U.S. national average of patients per cannabis dispensary “the difference is overwhelming.” The US national average per cannabis dispensary is 1,898, or almost five times more patients than in Puerto Rico. In the specific case of Florida –a state with some 30 million inhabitants– the number of dispensaries is 407 and the average number of patients per dispensary is 1,692, for a total of 688,000 patients throughout the state.

MICaM president, attorney José Aleczer, estimated the optimum number of patients per dispensary in Puerto Rico to be between 1,500 and 2,000.

“Of course every dispensary has its own

suggests the Cannabis Regulating Board go into a moratorium and stop issuing new licenses.

From then on, the Board should develop a set of regional and municipal criteria under which to issue new licenses. According to Vélez, the need of such criteria is more evidently seen in the number of dispensaries operating in the San Juan Metropolitan area, where the saturation is the strongest.

Furthermore, the Board should take all the necessary measures to guarantee that a report on the conditions of the industry is published annually.

The study also recommends that the government should adopt a policy recognizing the economic importance of this industry for the development of Puerto Rico as a regional and hemispheric hub in the medicinal cannabis business.

Finally, Vélez recommended the government to consider the possibility of granting economic incentives to the industry, very much like the incentives given to other sectors such as manufacturing, tourism and the agriculture.

This is a new industry that has been developing in a somewhat organic fashion, despite the fact that it is a much regulated industry.

Gustavo Vélez, Economist

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Paying the Same

but Getting Less

Inflation manifests as more than just higher price tags

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Zoe Landi Fontana, The Weekly Journal

nflation is at its highest level in decades, and with the most recent numbers published before Russia’s invasion of Ukraine, we aren’t exactly sure how bad it is yet. Nevertheless, there’s a lingering feeling that our paycheck isn’t going as far at the grocery store.

One culprit is shrinkflation.

Shrinkflation is a strategy used by companies to compensate for inflation, but without raising prices directly. It occurs when a product’s price

This is similar to what airlines have done, which no longer give away nuts or snacks on their flights to lower their costs. One bag doesn’t mean much, but thousands do.

José Joaquín Villamil, Economist

stays the same, but its size shrinks. Coined by Noticing Shrinkflation British economist Pippa Malmgren in 2009, Unless the new and old packages are shelved the phenomenon is a common tactic to hide side-by-side, it’s difficult to spot this profit-padding inflation. tactic. One tip is to look for a redesign on the Although it may seem illegal to sneakily packaging, which may signal that the product’s size decrease product sizes while keeping the same has been changed. Industry experts recommend price, products are already paying closer attention to required to indicate weight, price-per-ounce, instead of the volume, or quantity, thus overall price tag. By comparing leaving it up to the consumer to price-per-unit, shoppers can realize the change in value. ensure they get the best deal.

The main driver behind shrinkflation is higher ‘Skimpflation’ In 2014, a large production costs. When raw Meanwhile, inflation plays bottle of Coca-Cola materials, labor, and energy out a little differently in the shrank from 2 liters prices go up, so does the cost service industry. Restaurants to 1.75. of production, diminishing might serve a smaller portion profit margins. By manipulating for the same price as before, or the packaging and quantity of provide lower-quality service the product, but keeping the because of labor shortages. This price the same, a producer can is called ‘skimpflation’ because improve or maintain their profit margin. the business is skimping on service and quality.

An example of shrinkflation can be seen in Employers who are trying to cut back on General Mills’ chocolatey cereal, Cocoa Puffs, expenses could resort to leaning out their staff whose family-size box’s contents shrunk from 19.3 or they might not be able to find employees who ounces to 18.1 ounces. Similarly, in 2014, a large are willing to work for what they can afford to bottle of Coca-Cola shrank from 2 liters to 1.75. pay them. This results in a scenario such as the “This is similar to what airlines have done, which following: a server who previously attended to no longer give away nuts or snacks on their flights five tables might now need to take care of eight to lower their costs. One bag doesn’t mean much, because there just isn’t enough personnel. but thousands do. The same happens with the Although it may seem as if companies are ounces in a bag of potato chips, a few potatoes attempting to swindle customers, a lot of what’s less is not a great saving, but thousands are a happening is a means to survive. For small significant saving,” explained economist José businesses, these cutbacks occur so that they can Joaquín Villamil. keep their doors open.

In fact,

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Small Oil Producers Could Gain as Buyers Shun Russian Crude

elsewhere, and depressed demand during the COVID-19 pandemic cut into Ghana’s oil exports.

Now, Ghana’s national oil company, Ghana National Petroleum Corp., is taking a larger role, buying shares in oil fields from companies like Occidental Petroleum. Greater state involvement is raising uncertainty about how much access Ghana will offer to foreign oil companies. Some, including Tullow Oil and Aker Energy, are producing there now, but Tullow’s shares have plummeted in recent years, and there has been speculation that it may leave Ghana.

As world markets grapple with the current oil price shock, niche producers are in especially favorable positions

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Jennapher Lunde Seefeldt, Augustana University

s the U.S. and Europe cut back purchases of Russian oil, and energy traders shun it for fear of sanctions, the search is on for other sources. Attention has focused on Iran and Venezuela, both of which are led by governments that the U.S. sought until recently to isolate. But emerging and less-developed producers could also play roles.

Among the world’s many oil-producing countries, a few are positioned to jump the list and become increasingly active. They include the West African nation of Ghana (No. 33), along with Guyana (No. 42) and Suriname (No. 69), two small adjoining countries on the North Atlantic coast of South America. All three nations have become oil producers within the past 12 years, working with large companies like ExxonMobil, Tullow Ltd, Chevron, Apache, Total and Royal Dutch Shell.

I study factors that influence levels of democracy and social justice within nations, especially as they relate to natural resources and economic structures. As I see it, these newer producers are in a unique position compared to other oil-exporting nations, such as Nigeria and Ecuador.

In too many cases, developing nations opening their economies to oil production have been expected to accept the terms companies demand, with little room for negotiation and continued exploitation of host communities. In contrast, Guyana, Suriname and Ghana are better situated to obtain favorable terms.

Striking Better Deals

As world markets grapple with the current oil price shock, niche producers are in especially favorable positions to secure advantageous contracts and more favorable terms from international energy companies. For example, oil companies typically pay host countries royalties on their revenues that average about 16%. To date, Guyana and Suriname have accepted fees of less than 6.5% in an effort to attract investors. Under current conditions, they may be able to ask for more during new contract negotiations.

Managing Oil Income

Nations and states that produce oil or other natural resources often put their royalties into sovereign wealth funds instead of simply adding them to general treasury funds. A sovereign wealth fund is essentially a rainy day pot that the government can use in times of economic stress to continue funding major priorities, such as infrastructure projects and social programs.

Some of these funds, notably in Norway and Alaska, have produced significant benefits for residents. However, some experts argue that Oil production started in Guyana in late they aren’t necessarily well suited for developing 2019, and currently the country produces over nations.

340,000 barrels per day. Guyana learned from According to this view, the its first block contract with success of these funds depends ExxonMobil to demand more on many hard-to-control “local content” – a key condition variables, such as whether in oil negotiations that refers the country has a diversified to hiring local workers and economy, its level of corruption using locally made goods and and global events like equipment. Natural resources Oil companies commodity price collapses. And minister Vickram Bharrat has typically pay host managing the funds requires called that agreement, made countries royalties significant technical skills. by a previous administration, on their revenues Ghana created an Oil “one of the worst ever between that average about Heritage Fund in 2011, and a government and an oil 16%.

Guyana and Suriname are in company,” and Guyanese the process of doing so. All officials say they will seek three may need assistance to more-favorable terms in future manage these funds effectively agreements. and maximize benefits for their citizens.

Suriname’s new offshore oil discoveries offer

In fact,

potential. Small operations are currently producing about 20,000 barrels per day, and major projects are expected to start by 2025.

Suriname is demanding increased insurance from oil companies in the event of an oil spill, along with prepared emergency cleanup procedures. These processes are continually reviewed and criticized, keeping companies on their toes.

Ghana started oil development in 2007 and now produces about 163,000 barrels per day.

However, ExxonMobil pulled out of the country in 2021, reportedly to focus on higher-value projects

Transparency And Peer Support

Recognizing that it can be challenging for developing countries to negotiate with major corporate investors, a number of nongovernmental organizations have become active in this sector. One that’s particularly relevant to oil production is the Extractive Industries Transparency Initiative, which seeks to publicize information about extraction practices, contracts, taxing and spending processes, and more. This benefits the public by tracking where revenue goes and promoting accountability.

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opinion Wayne Stensby

President & CEO, LUMA Energy Puerto Rico

Working Together to Build a Cleaner Energy Future

W

ith global instability, specifically Russia’s invasion of Ukraine, driving energy prices even higher, the importance of prioritizing and empowering the growth of clean, renewable energy across Puerto Rico has never been greater.

LUMA understands this and is working closely with the Puerto Rico Energy Bureau (PREB), federal agencies and key energy stakeholders to advance Puerto Rico’s renewable energy goals together.

Whether it’s working toward a future of 100% renewable energy through our participation in the U.S. Department of Energy’s recently announced PR100 Study, or charting the course for increased electric vehicles (EV) adoption through our Phase I EV Infrastructure Deployment Plan, LUMA is proud to help lead Puerto Rico’s green energy transformation.

As part of our commitment to Puerto Rico’s greener and cleaner energy future, in just over eight months LUMA has connected over 15,000 solar customers, adding over 70 megawatts of renewable electricity to the grid. We have also been working with the PREB and renewable energy developers to integrate up to 1,000 megawatts of new utility-scale solar energy and to add up to 500 megawatts of battery storage onto the grid.

Additionally, we’re coordinating with three utilityscale wind and solar energy facilities, as well as with 40 Puerto Rican businesses, to connect an additional 270 megawatts of renewable electricity.

Whether through the adoption of solar, or helping empower the growth of EVs, these clean energy projects are just the beginning of what we hope to accomplish over the coming years.

When it comes to EVs, we believe there is a bold new future ahead of us with increasing rates of adoption that may help bring about the end of the gas-powered vehicle in Puerto Rico. Achieving this goal will not be easy, but it is one that is important for Puerto Rico. Currently, it is estimated that less than 1% of Puerto Rico’s approximately 2.2 million cars are electric. Increasing use of EVs over the coming decade will require the right infrastructure, and this infrastructure will be even more important as the cost of EVs drop over the coming decade.

Recently, LUMA presented our vision for the development of the Phase I EV Infrastructure Deployment Plan. This plan will address EV infrastructure deployment, EV rate design, equity and access. What is driving our plan is a commitment to ensure the reliability of the energy

Currently, it is estimated that less than 1% of Puerto Rico’s approximately 2.2 million cars are electric. system for all our customers, as well as ensuring that all our customers can someday in the future choose to purchase an EV with confidence. By identifying near-term and mid-term EV support actions that LUMA and stakeholders can take, we are outlining a clear roadmap for future growth and increased EV adoption in Puerto Rico.

Some of our customers may ask, why is this plan so critical? The truth is that we must all – customers, LUMA, our regulator, other stakeholders and generators – work together to achieve a more sustainable energy future.

For example, how the energy system should be structured to support EVs is a critical question and will require clear guidance from our regulator, the

PREB, on identifying, planning and implementing actions to support the transition to EVs. We must also address what impact the rapid growth of EVs will have on energy generation and the reliability of the grid. Why? Because the more people adopt EVs, the more electricity is consumed, leading to further demands on the power supply.

To keep the grid reliable for all, we will need a plan that ensures that the Puerto Rico Electric Power Authority (PREPA) and other generators provide enough energy to meet future demand.

Regardless of the challenges ahead, we must address them together because only by partnering and working together will we bring about the energy transformation in Puerto Rico.

Whether it is the higher price of gas our customers use to fuel their cars or the higher price of generation fuels that are used to power PREPA’s generation facilities, we know that building a cleaner and greener energy future is of paramount importance for all our customers. The good news is that with open discussion of the challenges ahead and productive partnerships that put the interests of Puerto Ricans first, we can transform Puerto Rico’s energy system and build an energy future that is more reliable, more resilient and cleaner for this generation and the ones that follow.

La verdad te necesita.

< The Weekly Journal > Wednesday, March 16, 2022

La mujer es Lo que eLLa quiera ser.

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U.S. extends mask rule for travel

TSA announced last week it is extending the requirement through April 18

A decision to eventually scrap the mask requirement — one of the last vestiges of nationwide pandemic rules — has grown more likely in recent weeks as more states, even those led by Democratic governors, relaxed their own mandates for wearing masks indoors, and the CDC Zeke Miller and David Koenig, The Associated Press eased its recommendations.

That led critics to question why the CDC would allow maskless people to gather in movie theaters ASHINGTON — Federal and sports arenas but not on planes. officials are extending the White House press secretary Jen Psaki said last requirement for masks week that deciding on the right policy for travel was on planes and public more complicated than setting standards for local transportation for one communities to follow. more month — through “If you’re moving from one zone to another and mid-April — while taking picking people up … it’s a little bit different, and that steps that could lead to lifting the rule. requires some consultation, The mask mandate was which is what (CDC officials) scheduled to expire March are going to endeavor to do 18, but the Transportation between now and April 18,” Security Administration said Psaki said. last week that it will extend the CDC Director Dr. Rochelle requirement through April 18.

Walensky said last week that her TSA said the extra month Since the start of agency must study the science will give the U.S. Centers for 2021, airlines have around virus transmission “but Disease Control and Prevention reported more than also the epidemiology and time to develop new, more 6,000 incidents of the frequency that we may targeted policies that will unruly passengers, encounter a variant of concern consider the number of cases of most of them or a variant of interest in our COVID-19 nationally and in local involving disputes travel corridors.” communities, and the risk of over mask wearing. new variants.

The TSA enforces the mask When all started rule, which extends to planes, The federal mask mandate buses, trains and transit hubs. was imposed in January 2021, As of March 3, more than 90% of the U.S. days after President Joe Biden took office, and population lived in areas with low or medium has been extended several times. The Trump COVID-19 case levels, meaning that the CDC no longer administration had declined to require masks on recommends face masks in public indoor settings. public transportation, but airlines began requiring

W

In fact,

If you’re moving from one zone to another and picking people up … it’s a little bit different, and that requires some consultation.

Jen Psaki White House press secretary

them in mid-2020 to reassure passengers worried about contracting the virus.

The requirement became a lightning rod for confrontation between some passengers and airline crews. Since the start of 2021, airlines have reported more than 6,000 incidents of unruly passengers, most of them involving disputes over mask wearing. That history could make it unlikely for airlines to require masks once the federal rule lapses.

“I don’t think the airlines have any desire to impose their own requirements at this point against a public that is weary of these restrictions,” said Henry Harteveldt, a travel-industry analyst with Atmosphere Research Group.

On four flights he took this week, Harteveldt said, “I noticed there were passengers who did not wear their masks even when they were not eating or drinking, and the flight attendants did not ask them to put them on.”

In September, the Transportation Security Administration doubled the fines for people who refused to wear masks on public transportation to $500 to $1,000 for first-time offenders and up to $3,000 for repeat violations.

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Digital entertainment ballooned in 2021

Last year, digital revenue was more than three times that of global box office

B

Jake Coyle, The Associated Press

efore the pandemic, the theatrical and digital markets for entertainment were roughly similar in size. Last year, however, digital revenue was more than three times that of global box office, according to a new report by the Motion Picture Association.

The MPA’s annual study of theatrical and home entertainment, published Monday, crystallized just how much streaming has come to dominate the media landscape. In 2021, the digital market A scene from the animated film “Luca.” >Disney via AP accounted for 72% of the combined theatrical and home market. In 2019, digital accounted for $45.5 declining for years. Last year, physical media fell to billion worldwide; last year it ballooned to $71.9 $6.5 billion, or about half what it was in 2018 and a billion. fraction of their record highs.

Streaming services have led the boom. In But however the media pie is divided, the 2021, streaming subscriptions rose to 1.3 billion combined entertainment market in 2021 was globally, a 14% increase from the year before. In practically the same as it was before the pandemic, the United States, subscriptions grew at a similar totaling $99.7 billion. That was actually higher pace to 353.2 million. According than the $98.1 billion of 2019. to Nielsen, the Pixar film “Luca” Consumer spending — $328.2 on Disney+ was the most watched billion last year, including cable movie of 2021, with more than subscriptions — also matched 10.5 billion minutes streamed.

2019’s numbers.

The digital surge came at the Still, the MPA data captured same time the pandemic battered many of the shifts accelerated The Pixar film “Luca” the theatrical business. While by the pandemic. In both 2020 on Disney+ was the worldwide box office last year and 2021, 179 original films were most watched movie nearly doubled that of 2020, the exclusive to streaming services of 2021, with more first year of the pandemic, the compared to 113 in 2019. Viewing than 10.5 billion $21.3 billion theatrical market, movies online grew in 2021 by minutes streamed. amid sporadic theater closures 15% versus a year earlier.

Source: Nielsen and widespread delays, was Other facets of moviemaking roughly half of what it had been stayed stubbornly the same, before the arrival of COVID-19. according to USC Annenberg’s In 2019, box office accounted Inclusion Initiative. In a report for $42.3 billion in sales. With steady business released Monday, researchers found that in the returning to movie theaters in much of the world 100 highest-grossing films of 2021, 41% featured this year, analysts forecast that the theatrical female leads or co-leads (compared to 51% of the recovery could reach around 80% of what it U.S. population) and 32% of leads were from a typically has. Meanwhile, physical sales (most historically excluded race or ethnicity (compared notably DVDs and Blu-rays) have been gradually to 40% of the U.S. population).

In fact,

While the industry reckons with the fallout of the pandemic and the evolving theatrical market, decision-makers must be wary that the progress they have made can stagnate or even reverse.

-Stacy L. Smith Director, Inclusion Initiative

While those rates are substantially higher than when USC researchers began tracking in 2007, they suggested the industry’s belated and gradual shift to more diverse representation on screen is still falling short of reflecting American audiences.

“While the industry reckons with the fallout of the pandemic and the evolving theatrical market, decision-makers must be wary that the progress they have made can stagnate or even reverse,” said Stacy L. Smith, director of the Inclusion Initiative, in a statement.

14

Designer Liz Isabelle Marti.

/ Wednesday, March 16, 2022

At the Intersection of Fashion, Technology, and Sustainability Metaverse couture makes an entrance with the first Puerto Rican NFT fashion designer

G

“

Zoe Landi Fontana, The Weekly Journal

randpa, do you think this will make a change?” she asks.

“We don’t know for sure, but we will try,” he replies. They’ve kept this tradition for years - collecting a variety of containers, washing them, and bringing them to a special center to be recycled properly - despite the lack of an islandwide recycling program.

Fast-forward, and that girl - Liz Isabelle Marti, marketing consultant turned fashion designer - is still on a mission to take ownership of her island, and her planet. By tapping into the community of crypto-nomads in Puerto Rico, and carrying on the legacy of environmental awareness from her grandfather, she’s been expanding the boundaries

of traditional sustainability efforts and what it means to be a fashion designer.

Alluring Peacock

“We’re designing the future of clothing,” Liz explained in an interview with THE WEEKLY JOURNAL, “It’s common to think about clothing in a very physical sense.”

That might seem like an obvious comment, but the reality is that the fashion industry is increasingly going digital. This tendency was also identified in McKinsey & Company’s 2022 The State of Fashion Report, which named the top three opportunities this year to be in digital, sustainability, and consumer engagement.

The designer is currently in the research and development phase of her fashion label Alluring Peacock. “The peacock spiritually symbolizes respect, honor, and integrity, as well as [being an] animal that invites us to practice self-love, kindness, and compassion - characteristics that are strongly aligned with my core values as a human being. Alluring - that’s the way I want women to feel with my creations,” Lix said of the influences behind the brand’s name.

Alluring Peacock is founded on a philosophy of “slow-fashion” i.e., garments made from durable,

We’re designing the future of clothing.

-Liz Isabelle Marti Fashion Designer

responsibly sourced, high-quality materials, that will hold up over time. She will use NFTs to present and sell her creations.

NFTs in Fashion

One of her potential projects is based around individual pieces, instead of an entire collection.

Clients could see the ensemble online, purchase the NFT, then the clothing would be made to their specific measurements - Metaverse couture. She is also considering creating a 24 piece collection - smaller than a conventional collection, which would ensure she keeps to the sustainable tenants that are her foundation.

“This is really early. I’m still trying to convince

15

/ Wednesday, March 16, 2022

Involving [Cath Simard] in the piece is a way of me supporting her initiative and showing the world a new form of collaboration.

-Liz Isabelle Marti Fashion Designer “Epitome”

The physical representation of “Epitome”. >Courtesy of Liz Isabelle Marti

myself every day, even though I feel like I’m late Learning in the community already, that we are still actually in the very early Liz’s foray into the crypto world began almost stages,” Liz said of the technology and fashion five years ago, but it wasn’t until a year ago, that convergence. The Alluring Peacock aligns with she became an active part of Puerto Rico’s Web 3 predicted global trends - shifts towards local community, getting involved with a group of Act 22 retail, locally sourcing materials (caused by supply recipients who came together to build the island’s chain shortages), and diversification in consumer first Metaverse conference “Metaverso”. engagement.

“A lot has been published about crypto Additionally, NFTs can be used for product nomads on the island,” Liz commented about authentication and as collectible pieces. Last people coming to the island under Act 60, “It’s year, fashion house Dolce & Gabbana created an opportunity for Puerto Ricans to see them as an inaugural nine-piece allies, and learn from them.” collection of NFTs, sold in The designer has participated in tandem with physical couture, workshops put on by the Puerto in a collaboration with Unxd - a Rico Blockchain Trade Association curated NFT marketplace offering (PRBTA), whose aim is to make ‘the best digital luxury and NFTs can be education about Web 3 accessible culture’. used for product and promote blockchain It might sound like authentication and technology in academic and marketing hype now, but it’s a as collectible pieces. legislative circles. legitimate strategy for product Last year, fashion “There’s a very inclusive diversification. house Dolce & community of people coming Brands are engaging with Gabbana created an to the island. They want younger consumers through inaugural nine-piece other people to learn, they’re increasingly interactive, virtual collection of NFTs. not keeping [knowledge] for worlds, where appearances are themselves. If we forget about everything. our differences and come The internet creates together, we can accelerate problems, but it also solves them. The Metaverse technology on the island, and solve real issues on is a rapidly evolving space that presents the environment and blue economy on the island unexpected challenges alongside unprecedented for our own benefit,” said Liz. opportunities, especially for creatives like Liz. “I The designer believes that the government think the creative community now will have the also needs to educate locals on how they too can best opportunities in a lifetime,” she said, referring benefit from the tax incentives, nevertheless, she to the direct-to-consumer environment created by says, “…we could wait until the government gives social media and Web 3. us all of that, or we can start building it ourselves.”

Liz debuted her first fashion NFT, a gown, “Epitome” at Metaverso last December. “One with nature, duality of power and grace. Remembrance of our path through earth and our connection with nature. Life is sacred; earth our temple. How we purchase our goods and how we dispose of them matters. The piece invites us to reflect on a future in harmony with nature,” the artist says of her piece.

The gown uses Cath Simard’s “Free Hawaii Photo”, an image of a lonely road in Hawaii that went viral, while the artist initially received no recognition nor compensation for the photo’s use.

A few years later, Simard was able to mint the photo as a 1/1 NFT on the Ethereum blockchain, representing ‘an alternate path for traditional image licensing and usage rights’ for creatives.

“Involving [Cath Simard] in the piece is a way of me supporting her initiative and showing the world a new form of collaboration. The second part was including the peacock as an element of recognition – for the audience to enjoy and be able to recognize or link the physical piece to the NFT that Alluring Peacock created,” Liz described, having personally worked with Simard on a podcast.

Of the NFT’s sale, 10% of the proceeds went to Centro Para Emprendedores, the Center for Entrepreneurs, a special program to teach Puerto Ricans about NFTs, coding, and Web 3.

In fact,

#FreeHawaiiPhoto by Cath Simard

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