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Why Puerto Rico is still struggling to rebuild electrical grid 5 years after Hurricane Maria

A day before the five-year anniversary of Hurricane Maria’s landfall, Puerto Rico was pummeled again by another storm, Fiona, a Category 1 hurricane that shut down the island’s electric grid, leaving residents in the dark for days. In 2017, Maria and Irma took down all of the island’s transmission lines and damaged the grid, resulting in the longest blackout in U.S. history, according to the U.S. Government Accountability Office

Hurricane Fiona made landfall on Sept. 18 and knocked out the still-unstable electric system, an unwelcome reminder to residents that even after the Federal Emergency Management Agency (FEMA) obligated $9.5 billion to rebuild the grid after Hurricanes Maria and Irma, the work is far from finished. 

The vast majority of that money, which was approved in September 2020, has not yet been spent. The office in Puerto Rico overseeing reconstruction of the grid said in mid-September that the island has received $1.5 billion in disbursements that were approved under emergency appropriations after Hurricane Maria.

“The funds that we have were appropriated for Puerto Rico to improve the grid — … I don’t think anything has happened. We seem to have many more power outages after Maria,” said one expert, Agustin Carbo, the senior manager on energy transition at the Environmental Defense Fund.

PUERTORICO-US-WEATHER-HURRICANE
FILE: A power line tower downed by the passing of Hurricane Maria lies on top of a house in San Juan, Puerto Rico on November 7, 2017. 

RICARDO ARDUENGO/AFP via Getty Images


Manuel Laboy, the executive director of COR3, the office in charge of managing the federal funds for the recovery efforts of Hurricane Maria and the 2020 earthquakes, oversaw the efforts to rebuild Puerto Rico’s grid from 2017-2020 and said the process was very slow, hampered by bureaucracy and multiple restrictions imposed by the federal government.

“The funds became available for the electric grid reconstruction and permanent work in September 2020,” Laboy told CBS News.

The Trump administration also delayed other congressionally appropriated funds to be used for the recovery efforts overall — including $1.9 billion for the electrical grid — after Hurricane Maria for about two years, a report from the Department of Housing and Urban Development’s (HUD) Office of Inspector General noted. 

The reasons ranged from the 2018-2019 government shutdown to a bureaucratic disagreement between HUD and the Office of Management and Budget, the complexity of the funding process, the island’s existing financial hurdles and a new FEMA disaster relief system that raised yet more obstacles. 

“We have the perfect storm,” says University of Puerto Rico economist José Caraballo-Cueto.

“FEMA from the very beginning, back in 2017 gave poor service to Puerto Rico,” said Caraballo-Cueto. “There have been some improvements but not enough… The local government has also given poor service.”

And beyond the bureaucratic snafus, the U.S. Commission of Civil Rights published a report saying that during Hurricanes Irma and Maria, FEMA’s recovery efforts showed discrimination against Puerto Ricans — especially those with disabilities and non-native English speakers — in distributing assistance.

FEMA lacked enough Spanish-speaking employees to help islanders obtain aid, and the commission found that this meant that “Spanish-speaking Puerto Ricans received disproportionately lower amounts of assistance for María recovery than English-speaking mainland Americans.” 

The agency is trying to address this. As Fiona was about to hit the island, FEMA announced it was sending hundreds of personnel to help residents through the aftermath, and it now has a Spanish-language site to help with recovery efforts.

The agency has made efforts to speed up the work needed to repair and update the electrical grid. 

In 2020, a new system called the FEMA Accelerated Awards Strategy (FAASt) was implemented specifically to “expedite energy grid work in Puerto Rico.” Under the program, critical infrastructure projects could be grouped together in order to streamline the approval process, and FEMA and the Puerto Rico Electric Grid Authority agreed to use statistical sampling to come up with cost estimates for projects.

“The goal was to expeditiously obligate all permanent work funding for subrecipients providing critical services to survivors,” Laboy said.

After construction projects were approved by FEMA officials, they had to undergo review by Puerto Rico’s Energy Bureau (PREB) — an independent agency that oversees and regulates work related to the island’s electric grid. According to FEMA, PREB issued its first project approvals in June 2021.

A FEMA spokesperson said that before FAASt was implemented, “this endeavor would normally require inspections and agreements for each individual project, which would take years to complete.” 

Once approved and reviewed by all parties, the project can officially start, and PREPA can ask for reimbursement for project work, Laboy says. 

This is the point where FAASt has run into problems, largely as a result of  the island’s bankruptcy process. 

Puerto Rico filed for bankruptcy in 2016 with over $70 billion in debt from the central government. The island also has over $50 billion in pension obligations.

The central government’s debt was restructured early this year, but bondholders and the local government haven’t yet reached a deal on Puerto Rico’s Electric Power Authority’s (PREPA) $9 billion debt. 

Section 428 of FEMA’s Stafford Act says that any permanent project under the Public Assistance program that exceeds $123,100 will have to be done through reimbursement, that is, “they need to spend the money first,” Laboy said. 

The local government or agency that’s part of the rebuilding process needs to pay for the project — and then apply for reimbursement. But the liquidity the power authority has can’t be used because it’s in the middle of the bankruptcy process and negotiations over its debt.

According to Laboy, there is an amendment to the Stafford Act that allows Puerto Rico to receive a 20% advance payment on project costs. 

But amid the island’s economic depression, some experts say this won’t be enough, given the poor condition  of the grid. 

“This amendment resolves part of the problem but not all of it,” Caraballo-Cueto told CBS News.

The uncertainty from the debt negotiations is “preventing PREPA from using more resources to do permanent improvement” to the grid, Caraballo-Cueto said. 

Renewable energy goals

In recent years, the local energy bureau has also demanded Puerto Rico pursue renewable energy options. 

The Puerto Rico Energy Public Policy Act dictates that Puerto Rico must obtain 40% of its electricity from renewable resources by 2025 — just three years from now. By 2050, electricity needs to be 100% renewable.

“We are barely at 2% or 3%” according to energy experts, who think it could take a decade of work. Now, over 300,000 residents in the island remain in the dark two weeks after the hurricane. Nonetheless, Carbó is still optimistic that the grid can be made to work for Puerto Rico.

“It’s one of the worst in the U.S., but we can make it one of the best,” Carbó said.

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