[3] PREPA was originally named the Puerto Rico Water Resources Authority (PRWRA), created by Act 83 on May 2, 1941,[4] during the governorship of Rexford G. Tugwell.

[5][6] Throughout its history, PREPA has suffered several outages that have left regions or the entire island of Puerto Rico without power.

[9] In September 2021 demand for electricity exceeded supply, after mechanical and maintenance problems affected various power plants, resulting in four days of consecutive rolling blackouts.

[10][11] Central Aguirre and Palo Seco faced problems with the removal of seaweed since the filters to prevent the accumulation of such needed replacement.

[16] Electric companies in unaffected areas ordinarily make contracts for speedy assistance to those hit by disaster, but in this case negotiations took weeks.

The initial $300 million contract for power restoration was given to Whitefish Energy, a Montana company which had only two employees on the day the hurricane struck.

By December 2017, the Army Corps of Engineers had other contractors in place, along with crews brought in through mutual aid agreements with utilities such as Con Edison.

[20] On January 6, 2018, representatives of FEMA, the U.S. Army Corps of Engineers, and their armed security details entered a Palo Seco warehouse owned by PREPA to obtain and distribute a massive store of spare parts needed to restore grid power.

[25][26] As a result of the 2019–20 Puerto Rico earthquakes the Costa Sur Power Plant located in Guayanilla was knocked out of service.

In 2020, a court order required the awarded-contract documents be made public and showed several irregularities including that the company doesn't have a liquid-gas production track record in Puerto Rico and that rather than go through a bidding process, the contract was approved quickly.

[31] In June 2020 governor Wanda Vázquez Garced and the AEE/PREPA signed a contract with LUMA Energy that would give the company control of the AEE/PREPA electric grid for 15 years.

[39] PREPA's board of directors serves as the authority's governing body, with a membership that usually consists of private citizens entrusted with representing the public interest and may or may not include exofficio political officeholders (typically the Secretary of Economic Development and Commerce).

The governor is usually required to appoint four members with the advice and consent of the Senate, who along with the incumbent political officeholders which serve in ex officio capacity effectively render the authority a partisan tool rather than an electric utility.

[44] In 2019 the Puerto Rican government passed legislation requiring the closure of coal fired power plants by 2028 and achieving 100% renewable energy by 2050.

On June 3, 2014, senator Ramón Luis Nieves admitted publicly that, "part of the financial problem at PREPA was provoked by the government and the Puerto Rican legislature.

[78] As of 2021 the payment of PREPA's debt remains in an indefinite "limbo" due to a lack of agreement between the government of Puerto Rico and bond holders.

PREPA's debt totals over $9 billion and according to David Skeel, the new president of the Financial Oversight and Management Board for Puerto Rico, it will have to be renegotiated in light of the COVID-19 pandemic.

[79] Additional to a lack of progress on debt negotiation a 2020 law passed due to the COVID-19 pandemic in Puerto Rico halted cutting service to clients who failed to pay their utility bills, this resulted in a decrease in the earnings of the agency.