U.S. officials supervising Puerto Rico’s finances are installing an emergency manager at the island’s public electricity utility, in an attempt to course-correct a disaster response that has come under congressional scrutiny.

Puerto Rico’s financial oversight board is appointing the emergency manager to take over the public electricity monopoly, known as Prepa, with an eye toward its eventual privatization, according to people familiar with the matter. The maneuver would largely wrest control of the utility away from its board...