Top Puerto Rico bank says four months too long to wait for power

An America flag is seen after Hurricane Maria hit San Lorenzo, Morovis, Puerto Rico, October 4, 2017. REUTERS/Alvin Baez

By Hugh Bronstein

SAN JUAN (Reuters) – Puerto Rico needs to accelerate the timetable for restoring its power grid or else residents will flee for the mainland rather than live without electricity for months, the chairman of the territory’s largest bank said on Friday.

In an interview with Reuters on Friday, Banco Popular Chairman Richard Carrion said prolonged outages could shrink the U.S. territory’s economy and hurt its banking system. More than two weeks after Hurricane Maria hit the island, most of Puerto Rico is still without electricity.

With about $40 billion in assets, Banco Popular is Puerto Rico’s biggest financial institution. Carrion said 85 of the bank’s 169 branches were open, and that only about 40 percent of its cash machines were operating.

Puerto Rican authorities have estimated that it will take at least four months to restore the electrical grid, something Carrion says is “not acceptable.”

“The economy will suffer, and it may push people who are on the fence to say, ‘we’re leaving’,” he said, potentially pushing the bankrupt territory into even worse financial straits.

About 85 percent of the electricity that was used on the island before Maria is no longer being delivered to customers, according to the U.S. Army Corps of Engineers. Wide areas are marred by telephone poles snapped in two by the storm, leaving transmission lines in tangled roadside heaps.

Carrion said 90 percent of the island’s point of sale terminals, where people buy things with a swipe of their bank card, were still not running. The situation has increased the need for cash, a demand that the U.S. Federal Reserve has met by flying in money.

He said he also worries about the effect Maria will have on Puerto Rico’s ability to deliver a debt restructuring that would be acceptable to holders of the territory’s defaulted bonds.

Asked when a debt deal might be clinched, Carrion said: “If you would have asked that before Maria, we would have said it could be done before the end of the year.”

Now, he said, it’s anybody’s bet.

(Reporting by Hugh Bronstein; Editing by Sue Horton and David Gregorio)

Special Report: The bankrupt utility behind Puerto Rico’s power crisis

Special Report: The bankrupt utility behind Puerto Rico’s power crisis

By Nick Brown, Robin Respaut and Jessica Resnick-Ault

SALINAS, Puerto Rico/NEW YORK (Reuters) – In the rural village of Salinas in southern Puerto Rico, frayed electric lines hanging from a utility pole blew in the breeze last week near the town square.

But the damage didn’t come from Hurricane Maria.

“Those wires were actually there before,” said Fermin Seda, 68, a Salinas resident who said he has grown accustomed to downed lines and power outages.

Two weeks after the storm plunged the island into a blackout, less than 10 percent of Puerto Rico’s 3.4 million people have seen power restored – and many will wait months.

Restoring the grid after the worst storm to hit here in nine decades would be a monumental task even for a well-run utility. It will be much harder for the chronically underfunded Puerto Rico Electric Power Authority (PREPA), which went bankrupt in July amid mounting maintenance problems, years-long battles with creditors, a shrinking workforce and frequent management turnover.

For graphic on slow restoration of power after Maria click: http://fingfx.thomsonreuters.com/gfx/rngs/STORM-MARIA-POWER/010050ZK27Z/index.html

For graphic on PREPA’s aging power plants, dwindling workforce click: http://fingfx.thomsonreuters.com/gfx/rngs/USA-PUERTORICO-UTILITY/0100512E2EX/index.html

Interviews with more than two dozen officials and consultants who work for or with the U.S. territory’s government, PREPA or its creditors reveal a utility that was unprepared for a major storm despite the ever-present risk to this Caribbean island. When Maria hit, PREPA was trying to simultaneously finance an operational overhaul and dig out from about $8 billion in debt.

Puerto Rico Governor Ricardo Rossello, in an interview with Reuters on Saturday, said none of the utility’s storm response plans could account for years of poor maintenance of the dilapidated electric network.

“The emergency plan was as follows: There is no way to fix the nature of the grid,” Rossello said.

He added that the network was so feeble it would have collapsed even in a much weaker storm than the one that hit Puerto Rico at Category 4 wind strength – the second highest level in the five-tier U.S. storm gauge.

“If you have an old grid susceptible to collapse, there is no way – until you change it completely – that it can sustain the winds of a Category 4, or even really a Category 2,” the governor said.

CHRONIC WEAKNESSES

A host of chronic problems at PREPA left the island’s electric grid vulnerable to collapse in a major storm, Reuters found. They include:

* Frequent turnover in management and board leadership,which has long failed to prioritize grid maintenance, accordingto reports prepared in 2015 and 2016 for utility regulators bythe consultancy Synapse Energy Associates. The deferred upkeep,according to a PREPA assessment in April, led to a “degraded andunsafe” grid that needed at least $4 billion for modernizationof an “isolated system, in challenging terrain” that is “subjectto natural atmospheric events.” * Falling revenues that failed to cover operating expensesbecause of poor collection of utility bills and declining energysales through a decade-long recession. * A lack of regulatory oversight prior to 2014, and a roughtransition of power from former utility board members andofficials to a new energy commission created that year bylegislation, with little handoff of disaster-preparedness plans. * A staff diminished from 8,628 workers in 2012 to 6,042this year, according to the April PREPA report. The talent drainreflects a larger exodus of residents from Puerto Rico -especially skilled workers – as the U.S. territory lost 300,000people, or 8 percent of its populace, between 2010 and 2016,according to U.S. Census data.Ricardo Ramos, who took over as the utility’s chief executive in March, told Reuters that the number of employee departures over the past five years is actually closer to 4,000 – with the vast majority being key operational workers such as linemen, power plant operators and mechanics.

They were exactly the kind of workers the utility couldn’t afford to lose.

“PREPA did not invest in new power plants or new generation, so our power plants are very, very old; our distribution system is very, very old,” Ramos said in an interview on Monday.

One pivotal question now is whether the United States will work merely to patch the existing network or allocate billions of dollars in federal funds to overhaul it. The government is open to spending money on modernization, Homeland Security Advisor Tom Bossert said at a briefing last week.

The White House did not respond to Reuters’ inquiries seeking comment on the short- and long-term U.S. roles in restoring power to this U.S. territory.

FILE PHOTO: A woman chats with a neighbour at the Moradas Las Teresas Elderly House, where about two hundred elderly people live without electricity following damages caused by Hurricane Maria in Carolina, Puerto Rico, September 30, 2017. REUTERS/Carlos Barria/File Photo

FILE PHOTO: A woman chats with a neighbour at the Moradas Las Teresas Elderly House, where about two hundred elderly people live without electricity following damages caused by Hurricane Maria in Carolina, Puerto Rico, September 30, 2017. REUTERS/Carlos Barria/File Photo

‘THE LONG HAUL’

The Federal Emergency Management Agency (FEMA) told Reuters that the agency is “in this for the long haul” but offered no details on the level of funding it could commit to the island’s power grid.

Citizens of Puerto Rico do not receive services equal to U.S. states but also do not pay federal income tax.

The collapse of the grid isn’t the only cause of the island’s suffering. The U.S. relief effort so far has been unable to supply Puerto Rico with all the fuel it requires, for instance, leaving motorists waiting in long gasoline-station lines and depriving many backup electricity generators of diesel.

The lengthy electrical outages are a bitter pill for storm victims, who before Maria had already endured frequent service interruptions and rates higher than any U.S. state except Hawaii, according to PREPA and the U.S. Energy Department.

The impacts go well beyond temporary discomfort. The lack of power has been a key factor in a humanitarian crisis as residents with no refrigeration for food and medicine scrambled to find open stores and waited in endless lines.

In Salinas, 54-year-old Maria Sanchez wept as she threw out all of the food inside her mother’s fridge. By Saturday, she and six family members were surviving on crackers after eating all the other non-perishable food in the house.

“We are not rich – to throw away food like that. We’re running out of food – like fast,” she said, sitting on the porch, where a mild sea breeze offered little reprieve from the oppressive heat.

Diabetic Nancy Rivera lost more than food.

“All of my insulin is ruined,” said Rivera, 59, of Santurce, a district in San Juan, who stopped taking her spoiled medicine four days after the storm.

‘TRIAGE’ OF GRID REPAIRS

Winds of up to 155 mph (250 km/hr) during Maria knocked out about 80 percent of PREPA’s distribution network, said Ramos, the utility’s chief executive. Since the storm, power has been limited to key locales such as hospitals and hotels using generators fueled with a scarce supply of diesel.

Damage assessment for the grid, usually completed within 48 hours of a hurricane in the mainland United States, took a week-and-a-half, Ramos said. The assessment went as fast as possible given the widespread damage, he said, and the utility had three working helicopters to survey the network.

FEMA last week put the U.S. Army Corps of Engineers – often tasked with infrastructure projects – in charge of short-term power restoration, in coordination with the Energy Department, the American Public Power Association and the New York Power Authority.

Gil Quiniones, CEO of NYPA, said the Army Corps had asked his utility for experts in power systems – which isn’t a Corps specialty – who can “think strategically on how to triage the situation and how to prioritize the work.”

The task is made more daunting by the island’s ill-maintained infrastructure. And PREPA’s strapped finances mean it cannot keep large standing orders for full-scale repair operations to swarm in after disasters, as utility repairman did last month in Florida after Hurricane Irma.

Ramos said PREPA has about 30 days worth of existing supplies for repairs following a storm; more is being ordered, to arrive in the next few weeks, he said.

‘THEY CAN’T TELL ME HOW LONG’

On the south side of Puerto Rico, near most of the island’s power plants, broken wires and blackouts were common before Maria.

“They tell me that right now, they’re evaluating damage to the power grid in our region,” Salinas Mayor Karilyn Bonilla said on Friday. “And they can’t tell me how long that will take.”

Bonilla said she has seen workers remove a few transformers since Maria hit but no one fixing downed power lines.

The amount of time power plants were down due to unplanned outages, measured in megawatt hours, more than doubled between mid-2015 and mid-2016, according to Synapse, the consultant firm.

By summer 2016, residents were experiencing four to five times the number of outages as the average U.S. customer, the consultants wrote.

The system’s deficiencies were laid bare in September 2016, when a transformer fire knocked out half of the island’s power, which wasn’t fully restored for nearly a week, forcing the governor to declare a state of emergency.

“Basically it was what you can call an unfortunate set of events, but really it is what I have said since I began at PREPA: lack of maintenance,” Ramos said.

One of the biggest factors in the outages: a constantly shrinking staff, driven away by costly medical benefits and unsafe conditions. The utility’s April report notes PREPA had a greater-than-average number of safety incidents for U.S. utilities, with more than 14,000 accidents and 15 fatalities in a 10-year period.

Many workers left for better opportunities, Ramos said. Because Puerto Ricans are American citizens, they face no legal barriers in leaving the island for the mainland.

“The truth of the matter is they make a lot more money in the U.S.,” said Ramos.

FIGHT FOR CONTROL

U.S. utilities are regulated by the states in which they operate, and by the U.S. Federal Energy Regulatory Commission if they operate across state lines. U.S. federal oversight of PREPA is limited to environmental and safety standards and does not cover the transmission network.

Unlike utilities in U.S. states, PREPA had no regulator for decades and essentially governed itself. In 2014, the Puerto Rico Energy Commission was created by the island’s legislature, which sought greater oversight in response to perceived neglect by PREPA’s leadership at the time, which resisted the intervention.

Weeks after the act passed, PREPA became insolvent.

Today, the political squabbling over control of PREPA – and blame for its problems – continues even as utility officials respond to a historic crisis.

Ramon Luis Nieves – former head of Puerto Rico’s senate energy committee and a champion of the 2014 legislation – blasted former utility officials for poor oversight in an interview last week.

“Using their powers of self-regulation, PREPA itself was judge and jury,” he said as he waited in a five-hour gasoline line.

Energy Commissioner Angel Rivera said former PREPA officials gave the new regulator nothing in the way of disaster plans.

“If PREPA did any sort of analysis like this when they were creating the system, we would not know,” said Rivera, who was appointed in November 2014.

PREPA also fought the commission’s requirements to integrate renewable energy, said Nieves, the former senator. The commission rejected the utility’s first long-term plan to create a more reliable, cost-effective grid as inadequate, according to commission records.

Attempts by Reuters to reach PREPA’s previous chief executive, Javier Quintana, were unsuccessful.

Ramos – Quintana’s successor and a former engineer and PREPA employee – said he agreed with the need for an oversight commission when it was formed. But he now believes the commission wields too much power, citing its pushback on the utility’s capital spending.

“I basically have no power,” he said. “Basically, they wanted to run PREPA except during a hurricane, because now they are nowhere to be found.”

Jose Roman, interim chairman of the energy commission, disputed the notion that the commission wanted to run the utility, saying it only aimed to protect customers.

YEARS OF REBUILDING AHEAD

What remains unclear is the level of commitment from FEMA, the Army Corps and U.S. utilities for longer-term upgrades to buttress the system against future storms.

Bossert, the U.S. Homeland security advisor, said on Sept. 28 that the power grid would have to be rebuilt, “so we’re going to put federal money into this.”

The costs will be steep: The $4 billion estimate for modernization from PREPA does not include additional damage from Maria.

The task will be complicated by PREPA’s battles with creditors, who are led by hedge funds and mutual funds. The parties had been in debt restructuring talks for three years before the agency filed for bankruptcy in July.

A group of PREPA’s largest creditors, which include Franklin Advisers, Oppenheimer Funds and BlueMountain Capital, offered a loan of $1 billion after the hurricane. The island’s fiscal oversight committee rejected the offer, calling it a “publicity stunt” and criticizing the repayment and interest terms as unfavorable.

A spokesperson for the creditors declined to comment on that statement but the investment firms’ advisor, investment bank Houlihan Lokey, earlier expressed disappointment that the proposed loan had been rejected without negotiation.

The utility had considered but not yet implemented a wide variety of infrastructure improvements when senior leadership turned over after Rossello became governor at the beginning of the year. The governor typically appoints PREPA’s board and executive director.

Now new honchos are starting over in assessing PREPA’s needs, a repeat of past leadership transitions.

In the summer of 2016, PREPA held its 2017 public budgeting proceeding – the first led by the island’s utility commission rather than the utility itself.

Amid the deep financial problems of the island’s government and the utility, the commission allocated about $400 million for PREPA to address maintenance and repairs for the year, Commissioner Rivera said. Overall capital improvement plans for 20 years come to $2 billion, according to commission consultant Synapse.

Even the long-term plan represents just a fraction of what will be needed, suggesting the grid overhaul will require a serious commitment from the United States. Discussions about that reality are starting now.

“There’s diverging sentiments on the role of U.S. funding,” said a private sector energy executive who is working with PREPA to fix the networks and has been involved in strategy discussions with officials from FEMA and Puerto Rico.

“That’s where things start to get stuck,” he said. “No one argues about a generator in a hospital, but that doesn’t get the lights in the houses turned back on. Nobody knows where the money is going to come from.”

(Reporting By Nick Brown and Robin Respaut in San Juan and Salinas, Puerto Rico, and Jessica Resnick-Ault in New York; Additional reporting by Scott DiSavino and Stephanie Kelly in New York and Roberta Rampton in Washington; Writing by David Gaffen and Jessica Resnick-Ault; Editing by Brian Thevenot)

About 1.5 million, mostly in Florida, without power in Irma’s wake

About 1.5 million, mostly in Florida, without power in Irma's wake

By Zachary Fagenson

MIAMI (Reuters) – About 1.5 million homes and businesses in Florida and Georgia remained without power on Friday after Hurricane Irma, including 46 of Florida’s nearly 700 nursing homes caught in the deadly storm’s path.

Irma, which ranked as one of the most powerful Atlantic storms on record before striking the U.S. mainland as a Category 4 hurricane on Sept. 10, killed at least 84 people. Several hard-hit Caribbean islands, including Puerto Rico and the U.S. Virgin Islands, suffered more than half the fatalities.

Florida Power & Light, owned by NextEra Energy Inc <NEE.N> and the state’s biggest electric company, said it was working aggressively to restore power to the 23 percent of its customers still in the dark.

The utility has never before had to deal with a storm affecting its entire service territory, company spokesman Rob Gould said.

“It will go down as one of the largest and most complex restoration efforts in history,” he said. “Now we are literally into the house-to-house combat mode.”

The storm’s death toll grew to at least 33 people in Florida after a woman died of suspected carbon monoxide poisoning from a generator in Palm Beach County, the Palm Beach Post newspaper reported.

A total of eight others died in Georgia and the Carolinas. North Carolina reported its first Irma death on Friday, saying a man there also had died of carbon monoxide poisoning from a generator.

Eight elderly people died earlier this week after being exposed to the heat inside a nursing home north of Miami that had been left without full air conditioning after the hurricane hit.

The deaths at the Rehabilitation Center at Hollywood Hills, now under police and state investigation, stirred outrage over what many saw as a preventable tragedy and heightened concerns about the vulnerability of the state’s large elderly population amid widespread, lingering power outages.

“The governor will continue to review all ways to ensure tragedies like this never happen again,” Lauren Schenone, a spokeswoman for Florida Governor Rick Scott, said in a statement.

Florida’s healthcare agency ordered the nursing home on Thursday to be suspended from the state Medicaid program. The center said it plans to the fight the state’s efforts to shut it down.

A timeline of events issued by the nursing home shows administrators repeatedly called Florida Power & Light and state officials after a transformer powering its air conditioning system went out during the storm on Sunday. The center said it was informed that service would soon be fixed.

Nursing home operators had put out cooling units and fans in an effort to maintain reasonable temperatures and added additional cooling units supplied by a hospital next door on Tuesday.

But it was not until multiple patients began experiencing health emergencies, which promoted the evacuation of the center, that the utility company arrived to make the repair, the nursing home said.

However, officials at the Florida Department of Health said the facility did not indicate the extent of its problems nor requested assistance in reports to a state monitoring database. In its status reports, the center indicated that its cooling system was operational for much of the time, according to the state.

(Additional reporting by Letitia Stein in Detroit, Brendan O’Brien in Milwaukee, Scott DiSavino in New York and Colleen Jenkins in North Carolina)

Factbox: About 3.1 million still without power in U.S. Southeast after Irma

Factbox: About 3.1 million still without power in U.S. Southeast after Irma

(Reuters) – Power was restored by Thursday morning to more than half the 7.8 million homes and businesses that Hurricane Irma had left in the dark, leaving 3.1 million customers, or some 6.5 million people, still sweltering in the heat in Florida and Georgia without air conditioning, utilities said.

Most of the remaining outages were in Florida Power & Light’s service area in the southern and eastern parts of the state. FPL, the state’s biggest electric company, said about 1.4 million had no power on Thursday, down from more than 3.6 million on Monday.

NextEra Energy Inc-owned <NEE.N> FPL, which serves nearly 5 million homes and businesses, expects to restore power to essentially all its customers in the eastern portion of Florida by the weekend and the harder-hit western portion of the state by Sept. 22. It will take longer to restore those with tornado damage or severe flooding, FPL said.

Outages at Duke Energy Corp <DUK.N>, which serves the northern and central parts of Florida, fell to 855,000 on Thursday, down from a peak of about 1.2 million on Monday. Duke said on its website it expects to restore service to most customers by midnight on Sept. 17.

High temperatures were forecast to reach the upper 80s F (low 30s C) in Florida’s two biggest cities, Jacksonville and Miami, and the mid 80s in Atlanta over the next week or so, according to meteorologists at AccuWeather.

Irma hit southwestern Florida Sunday morning as a Category 4 storm, the second most severe on the five-step Saffir-Simpson scale. On Monday, when most customers were without power, the storm weakened to a tropical depression.

In Georgia, utilities reported outages declined to about 290,000 on Thursday, down from a peak of around 1.3 million on Monday.

Other big power utilities in Florida are units of Emera Inc <EMA.TO> and Southern Co <SO.N>, which also operates the biggest electric company in Georgia.

(Reporting by Scott DiSavino; Editing by Bernadette Baum)

California Fires Force Declarations of Emergency

Lake and Napa Counties in California are in a state of emergency because of the Valley Fire.

At least one person has been confirmed dead because of the out of control blaze and several firefighters were severely burned.  Cal Fire officials say the wounded were being treated at a Sacramento-area burn center with 2nd degree burns.

The fire passed 50,000 acres on Sunday and has been declared to be zero percent contained.

“I’m looking in all directions, and all I see is fire,” Monte Rio Fire Chief Steve Baxman told The Press Democrat. “This is unreal. … This thing just blew up on us.”

Over 10,000 residents were forced to flee the flames and officials confirmed over 400 homes and businesses.  Over 5,000 homes are without power in the region because of melted power lines.

The town of Middletown has entire blocks destroyed with homes reduced to a pile of smoking ash.

“It looked like hell everywhere,” Maddie Ross, who fled with her grandparents from their Hidden Valley Lake home, told the New York Times. “It was terrifying, truly terrifying. I’ve never been in a situation like that. We all felt like the world was coming to an end.”

“Losing everything you own and having to replace everything is a scary thought,” Alexis Woodruff said to CNN.

Snowstorm Leaves 135,000 Without Power

The first major snowstorm of the season struck Maine Sunday night leaving over 135,000 without power.

The National Weather Service said that Bangor, Maine received 12 inches of snow before the storm weakened and some outlying areas reported more than a foot.  A Portland television station reported they passed a foot by 5:30 p.m.

Heavy snow and gusty winds combined to bring down trees, snapping power lines and in some cases poles.  Roads across Bangor were closed because of the downed lines blocking major roadways.

Power officials hope to have all the darkened customers back on by Wednesday.

“The utility placed extra crews on standby for the weekend in anticipation of the storm,” Emera spokesman Bob Potts said in a news release. “They will remain in the field addressing problems and working to restore service to customers as safely and quickly as possible.”

Emera had 57,000 customers without power in their region.

Forecasters say the temperatures will rise into the 50s by midweek so the snow will quickly disappear.

Record Rainfall Causes Phoenix Flooding

Storms sparked in part by Hurricane Norbert off the Mexican coast have brought record amounts of rainfall to Phoenix resulting in massive flooding.

Governor Jan Brewer declared a state of emergency for the flooding and ordered all non-essential government workers to stay home because of the extremely dangerous conditions.

Phoenix Sky Harbor International Airport recorded a record two inches of rainfall.  Channel 12 in Phoenix reported some areas with rainfall totals surpassing 5 inches.  The flood was called “the biggest in 44 years.”

“Occasionally we’ll get a storm that really dumps on the west end of U.S. 60, or the central part, but not to this extent over the whole urban area,” Steve Waters of the Maricopa County Flood Control District told AZCentral.com.    “There is still rain coming from the southwest.  We’re going to be in this for the better part of the day.”

Maricope County Flood Control District officials told people to avoid driving Monday.

At least 10,000 homes and businesses were without power as of Monday morning because of the storms.

6.0 Quake Rocks Northern California

A 6.0 earthquake around 3:30 a.m. rocked Northern California on Sunday morning leaving residents rushing into the streets and some older buildings no longer stable enough to live in.

The quake centered about 6 miles southwest of Napa.  State Geologist John Parrish told residents the aftershocks would decrease in magnitude but that buildings that were damaged in the main quake are now susceptible to collapse from the aftershocks.

Queen of the Valley Medical Center in Napa reported 172 patients arrived at a triage tent set up after the quake and that 13 of the patients required immediate admittance to the hospital.  Hospital spokesman Walt Mickens said that one patient is in critical condition while a 13-year-old boy was airlifted to another hospital in critical condition after his home’s fireplace fell on him.

Pacific Gas & Electric said that 2,200 customers were without power on Sunday evening.  A total of 70,000 lost power at some point in the aftermath of the quake.

The quake is also a potential financial disaster for the region as many of the iconic wineries in the region were struck.  One vineyard reported that their entire 2011 and 2012 vintages were destroyed in the collapse of a building.

Some analysts say the quake could foretell a more serious earthquake.  There are concerns that the energy released by the Napa quake could increase pressure on other fault lines throughout the region.

Massive Earthquake Shakes Mexico and Guatemala

A major earthquake woke up Mexico and Guatemala Monday morning, leaving at least four people dead.

The U.S. Geological Survey said the quake struck around 6:23 a.m. local time on the Pacific Coast about a mile from Puerto Madero on the Guatemalan border.  The quake was initially measured at 7.1 but reduced to 6.9.

Two people died in the Guatemalan town of Pati when their home collapsed on them.  A third was confirmed dead from a heart attack brought on by the stress of the quake.  A wall in Huixtla crushed a man when a building collapsed.

Guatemalan President Otto Perez Molina said on the radio that a newborn was killed when hit by a collapsing wall but emergency personnel did not confirm it.

Massive power outages have left most of Guatemala without electricity.  Early reports had hundreds of homes with significant damage and utility poles down for hundreds of miles.

Hurricane Arthur Rips North Carolina; Moves North

Hurricane Arthur ripped through North Carolina overnight and is moving into the northeast as a weakened Category 1 storm.

The U.S. National Hurricane Center says Arthur’s maximum sustained winds have fallen to 90 miles per hour as the eye was located about 70 miles north of Kitty Hawk, North Carolina.

Power companies say that at least 44,000 residents are without power across the Carolinas because of downed power lines and trees.  North Carolina Governor Pat McCrory said storm damage evaluations would begin after the storm completely passed the state.  Flooding was the governor’s major concern.

“We’re most concerned about flooding inland and also storm surges in our sounds and our rivers further inland,” he said.

Business owners in the region lamented the timing of the storm saying that it was a badly needed weekend for tourists.  Business owners say because of storms they lost the last three straight fall tourism seasons and have struggled to stay open.