Trump Attaches Severe Restrictions to Puerto Rico’s Long-Delayed Disaster Aid

People fill a temporary shelter at a municipal stadium in Guayanilla, Puerto Rico, Jan. 10, 2020. The Trump administration on Jan. 15 imposed severe restrictions on billions of dollars in emergency relief to Puerto Rico, including blocking spending on the island’s electrical grid and suspending its $15-an-hour minimum wage for federally funded relief work. (Erika P. Rodriguez/The New York Times)

By Lola Fadulu and Mark Walker

WASHINGTON — The Trump administration on Wednesday imposed severe restrictions on billions of dollars in emergency relief to Puerto Rico, including blocking spending on the island’s electrical grid and suspending its $15-an-hour minimum wage for federally funded relief work.

The nearly $16 billion in funding, released while Puerto Ricans still sleep on the streets for fear of aftershocks from last week’s earthquake, is part of $20 billion that Congress allocated for disaster recovery and preparation more than a year ago, in response to the territory being hit by back-to-back hurricanes in 2017.

The Department of Housing and Urban Development had released only $1.5 billion of the congressional relief, citing concerns of political corruption. Of that, only $5 million has been allocated.

“In a great win for Puerto Ricans and U.S. taxpayers, the Administration has outlined reforms for the grant agreement to Puerto Rico in order to protect resources,” said Chase Jennings, a spokesman for the Office of Management and Budget at the White House.

Rep. Nydia M. Velázquez, D-N.Y., the first Puerto Rican woman elected to the House, called the move disdainful and contemptuous.

“Why is Puerto Rico always subjected to different standards when it comes to this administration?” she demanded.

President Donald Trump has clashed repeatedly with Puerto Rico’s government. In 2018, he suggested the death toll from Hurricanes Irma and Maria had been inflated “in order to make me look as bad as possible.” He has exaggerated the amount of federal relief allocated to the island and denounced the mayor of San Juan as “crazed and incompetent.”

Even as pressure has mounted for him to release emergency assistance, the president has maintained his assertions that the money will not be well spent. On Wednesday, the White House budget office made clear how those assertions had shaped relief.

To access $8.2 billion in recovery money and $8.3 billion in disaster prevention funds, Puerto Rico will have to submit budget plans to the territory’s federally mandated fiscal control board, which will track where the money goes. It will also have to bolster its property registration database.

Puerto Rico will be barred from paying its $15-an-hour minimum wage to workers on federally funded projects. And none of the funds can be used on the electrical grid, although the Department of Housing and Urban Development has yet to release nearly $2 billion that was allocated for Puerto Rico’s electrical system.

White House officials acknowledged rolling blackouts continue on Puerto Rico but insisted there was no need for new money.

The requirements were first reported by The Washington Post.

A congressional aide involved in the issue said the White House and its budget office appeared to have chosen restrictions that would be politically difficult for Puerto Rican officials to carry out. That way, the aide suggested, the federal government would not appear responsible for withholding the aid.

For example, the fiscal control board is viewed in Puerto Rico as unaccountable to the people. And Puerto Rican officials are not inclined to tell workers they will be paid less than the minimum wage. With regard to the property and deed registrations, Puerto Ricans have long used informal ownership records.

The restriction relating to the electrical grid may just be a practical one: Congress has already appropriated a separate tranche of money specifically for the electrical grid, though it has yet to be allocated.

Sen. Chuck Schumer of New York, the Democratic leader, called the new restrictions “onerous and unprecedented” and said they “would add insult to injury for our fellow Americans in Puerto Rico reeling from multiple natural disasters.”

The White House announcement came four days after a 5.9-magnitude earthquake rocked an island reeling from a series of earthquakes this month and still struggling to recover from Hurricanes Irma and Maria in 2017. Parts of the island have lost power, and some Puerto Ricans have set up camp in public spaces instead of returning to their homes.

“While it is a welcome development that the administration has released its hold on these funds, this step is inexcusably overdue,” Velázquez said.

Puerto Rico’s government was already straining to spend federal money under earlier restrictions. The new conditions will make it much harder.

The administration’s disparate treatment of Puerto Rico is not new. In August, the Department of Housing and Urban Development announced that it would release billions of dollars in federal disaster mitigation funds in two funds: one for nine states on the mainland, and the other for territories like Puerto Rico and the U.S. Virgin Islands. The department also announced it would appoint a federal financial monitor to ensure that the money for Puerto Rico was managed properly.

“Recovery efforts in jurisdictions prepared to do their part should not be held back due to alleged corruption, fiscal irregularities and financial mismanagement occurring in Puerto Rico,” Ben Carson, the secretary of housing and urban development, said at the time.

Congressional Democrats are struck by how long the money has been delayed.

“As appropriators, we have fought for the release of the aid by questioning Secretary Carson, establishing a legal deadline for agency action, conducting an oversight hearing with HUD officials and the inspector general, and withholding money from the department in the most recent appropriations bill,” said Rep. David E. Price, D-N.C. “It should never have come to this.”

Since 2017, the housing department, the Federal Emergency Management Agency and other agencies have provided only a fraction of the $91 billion in aid Puerto Rico is estimated to have needed following Hurricanes Irma and Maria, leaving the island’s critical infrastructure and homes in limbo.

Trump has approved Puerto Rico’s request for an emergency declaration but has not approved a major disaster declaration, which could pave the way for additional federal funding.

Senators seek to restore public employee-leave days

The Puerto Rico Senate (Courtesy photo)

Propose 2.5 vacation days per month worked, 1.5 days for sick leave

SAN JUAN — Public employees could re-accumulate vacation leave at a rate of two and a half days for each month of service, if the Senate Bill 1341, introduced Monday, is passed, under the “by petition” concept by Sens. Luis Berdiel Rivera, Ángel “Chayanne” Martínez Santiago and Carlos Rodríguez Mateo.

Currently, public employees accrue two days of vacation leave for every month worked, while one day of sick leave is granted per month.

The proposal presented to lawmakers and introduced by the three senators in the Office of Record and Procedures is to provide that 2.5 days of vacation for each month of service be accumulated up to a maximum of 60 days at the end of each calendar year. In addition, vacation leave would begin to accrue once a regular worker has been employed for three months, but will be retroactive to their start date. Sick leave, meanwhile, would be accumulated at the rate of 1.5 days for each month of service.

Berdiel, a senator for the District of Ponce, said he received requests from several citizens and public employees for the bill to be filed by petition.

“There is a Puerto Rico before and after Hurricane Maria. When we passed the ‘Law for the Administration and Transformation of Human Resources in Government’ at the beginning of 2017, nobody thought about how the labor landscape would look on our Island starting in December 2017. Many had to leave for the United States in search of a better life and others, like our public employees, decided to stay to continue forging a future here in Puerto Rico. That is why I recognize that, although it is true that the economy in our country is improving, the provisions of said 2017 Law on vacation and sick leave benefits have had a negative impact on public employees entering the current labor force. I thank my fellow Senators Chayanne Martínez and Rodríguez Mateo for joining this citizen petition and understanding that, just as has been requested of us, there is a return to the previous scheme of accumulation of benefits,” Berdiel said in a Senate-issued press release.

The release added that “as soon as the legislative piece is received” by the full Senate, it will be assigned to a committee for evaluation.

The island’s Financial Oversight and Management Board is sure to chime in were the Senate measure approved, as it could be in violation of its certified fiscal plan and budget.

The board requires that measures are consistent with the fiscal plan and budgets “as required by” the Puerto Rico Oversight, Management, and Economic Stability Act’s section 204(c), the panel has repeatedly said.

Puerto Rico Senate denies newly sworn gov its consent

Senate President Thomas Rivera Schatz, at lectern, speaks to his fellow lawmakers. (CyberNews)

Supreme Court gives chamber, Pierluisi and AG until noon Tuesday to present arguments  

SAN JUAN — The Puerto Rico Senate ended Monday the special session convened by former Gov. Ricardo Rosselló to consider the nomination of Pedro Pierluisi as secretary of State, putting an end to the possibility of Pierluisi receiving the constitutional requirement of consent from both legislative chambers. 

In his floor remarks, Senate President Thomas Rivera Schatz argued that it was up to the Supreme Court to decide whether Pierluisis was legitimately next in the gubernatorial line of succession, adding that, regardless, the Senate was not yet prepared to vote on Pierluisi’s confirmation because the new La Fortaleza executive mansion tenant never submitted all the documents required of cabinet nominees.  

“The Senate did not confirm Pierluisi [as secretary of State], his swearing-in as governor is null, and it is my duty to take this issue to the Supreme Court,” Rivera Schatz said when beginning his statement during the special session, where he also argued that “the Senate needs to be respected and Pierluisi can’t say one day that he will come [to the confirmation hearing] and the next day that he would not.”

Pierluisi’s ascension to the governor’s office is shrouded in allegations of illegitimacy and unconstitutionality because at the time of Pierluisi’s swearing-in as governor his confirmation process as secretary of State was incomplete. Pierluisi had only received the confirmation of the House of Representatives, despite article 4, section 5 of  Puerto Rico’s Constitution establishing that a secretary of State needs the advice and consent of both legislative bodies.

While Pierluisi contested Friday that as governor it would make no sense to go to the Senate’s confirmation hearing, he hoped the upper chamber would “ratify his incumbency,” adding during his first press conference at La Fortaleza that if the Senate voted against him, he would step down. 

Pierluisi echoed Rosselló’s last official statement, saying he was already secretary of State because the governor can make appointments while the legislature is in recess.

After Monday’s session ended, Puerto Rican Independence Party Sen. Juan Dalmau argued that although he would have preferred an explicit vote, it was clear that the Senate rejected Pierluisi’s nomination as secretary of State and that, “without a doubt,” if Pierluisi wanted to fulfill the “political promise” he made Friday, he should resign.

“The thing is that the secretary of State, to be considered secretary of State [on a permanent basis], needs the advice and consent of both chambers. The secretary of State, Pedro Pierluisi, didn’t receive the advice and consent of the Senate,” Dalmau stressed. 

Pierluisi argued in a statement that there was no rejection because there was no vote and that the proper course of action was to wait for the Supreme Court’s decision. 

“I acknowledge that the Puerto Rico Senate has brought a lawsuit to challenge my swearing-in as Governor and that it now seeks to have the Supreme Court of Puerto Rico resolve the matter,” Pierluisi said.

“Given that today the Senate did not cast a vote and that the vast majority of the Senators did not have the opportunity to express themselves concerning my governorship, with the utmost deference to the Supreme Court of Puerto Rico, I will wait for its decision, trusting that what is best for Puerto Rico will prevail,” he added.

Although only a few senators asked for turns to speak, most speeches were against Pierluisi. In his turn, the Senate president said that Pierluisi had four votes in favor of his confirmation Thursday, and that even though he gave mayors and Pierluisi time to “make calls” and “lobby,” there was but one more senator ready to vote in his favor Monday. “He needs 15 and he only has five,” Rivera Schatz said. 

Meanwhile, Sen. Miguel Romero argued that the Senate should have held the vote because it would bring stability and the Supreme Court could take it into consideration during its deliberation. 

On Sunday night, the Senate sued Pierluisi and the government of Puerto Rico, requesting Pierluisi’s swearing-in as governor be declared null. The Supreme Court gave the Senate, Pierluisi and the attorney general until noon Tuesday to present their arguments.

Senate Democrats block disaster aid measure


Puerto Rico gov, congresswoman reject differences on federal disaster aid bills

SAN JUAN – Resident Commissioner Jenniffer González and Gov. Ricardo Rosselló rejected Monday the controversy between the two over the bills in U.S. Congress that would allocate disaster funds for Puerto Rico.

However, Senate Democrats blocked the Republican disaster aid bill because it did not help Puerto Rico enough they said. The measure, which differs from the bill passed in the House in January, was reportedly changed after President Trump expressed hesitance toward approving further disaster funding for the island.

“The Democrats today killed a Bill that would have provided great relief to Farmers and yet more money to Puerto Rico despite the fact that Puerto Rico has already been scheduled to receive more hurricane relief funding than any ‘place’ in history,” Trump tweeted Monday.

“The people of Puerto Rico are GREAT, but the politicians are incompetent or corrupt,” his post reads. “Puerto Rico got far more money than Texas & Florida combined, yet their government can’t do anything right, the place is a mess – nothing works. FEMA & the Military worked emergency miracles, but politicians like the crazed and incompetent Mayor of San Juan have done such a poor job of bringing the Island back to health.”

Puerto Rico’s congresswoman González backed the Senate measure, while the island’s governor the already passed House bill.

“At the end of the day, what we want is for the money for Puerto Rico to appear. What worries me most is that this could have been approved in January; it could have been approved in February and we are already in April and a reduction in PAN (nutritional assistance program) benefits has already begun. That is why I believe the Senate bill forces both delegations, Democrats and Republicans, to work out the details in the different parts. The governor and I want the most funds possible for Puerto Rico,” González Colón said at a press conference, concluding her remarks with a Spanish expression that means they obviously are both working toward that end.

When asked what their plan was, Rosselló said, “The strategy is to negotiate with all the parties [involved] to get the greatest number of resources for Puerto Rico. If the resident commissioner and I were to draw a diagram here, we’d be putting ourselves at a disadvantage for what we are negotiating there. So our goal is to get the most resources.”

The U.S. House of Representatives has passed H.R. 268, which includes the allocation of some $14.2 billion in disaster aid for several states but the Senate voted Monday afternoon on a measure authored by Sens. Rick Scott, Marco Rubio and Sonny Perdue, which only included $600 million for Puerto Rico’s nutrition assistance program, which faces a funding cliff in September.

Democrats blocked passage because they want to “add almost $700 million more to unlock further disaster aid for Puerto Rico and several states, including help to rebuild badly damaged water systems. Democrats are also seeking to force the administration to release billions of dollars in rebuilding funds that have already been approved,” according to the Associated Press.

On Sunday, Rosselló urged Congress to consider voting on H.R. 268, “as already approved in the House,” because, he said it “provides much-needed support to Puerto Rico to address infrastructure, education, nutritional and housing needs.”

He issued a statement saying: “Puerto Rico must receive the federal resources necessary to sufficiently complete our recovery and reconstruction in a timely manner, and to assist the more than 3 million U.S. citizens who live on the island and are working each and every day to recover” from Hurricane Maria, which he said “depleted our resources.”

The governor stressed: “Currently, we simply do not have the funds to cover cost-share requirements set forth – unilaterally and unnecessarily – by FEMA [Federal Emergency Management Agency]. What we are requesting is the same treatment other jurisdictions have received from the federal government: For the federal government to cover 100 percent of the cost-share requirements for emergency work is extremely helpful and will speed up the recovery’s current pace. We reiterate that we are not setting new precedent as this help has been extended to other jurisdictions in the past. We merely request equal treatment.”

The governor said he was also asking for $500 million to continue repairing the Puerto Rico Aqueduct and Sewer Authority (Prasa) infrastructure to make it more resilient in the event of another disaster.

“Moreover, the Caño Martín Peña, an underserved community in San Juan, is in desperate need of environmental restoration. To put an end to the constant flooding and devastating living conditions endured by it’s over 23,000 residents, as well as hundreds of thousands in its vicinity, the U.S. Army Corps of Engineers requires $25 million, which H.R. 268 provides. As we rebuild our electric grid, we are asking for $15 million in Department of Energy technical assistance so that we can rebuild our electric grid stronger, better and more resilient than before.”

The amendment being considered by the Senate, he said, “falls short of addressing the majority of our most pressing needs.”

–CB’s María Miranda and CyberNews contributed to this report

Trump’s alleged reluctance on Puerto Rico disaster funding complicates passage of U.S. aid bill

Puerto Rico gov implores U.S. Senate to pass supplemental appropriations bill

Trump’s reluctant dismissals could alter White House

Puerto Rico Senate given time to share bank balances

Puerto Rico’s Capitol (CB file)

Fiscal board had filed a complaint in court to compel disclosure

SAN JUAN – The Financial Oversight and Management Board for Puerto Rico has agreed to an extension requested by the island’s Senate to provide the chamber’s bank account balances.

“We welcome the Senate’s decision to find an acceptable solution for complying with the Oversight Board’s request and join the other entities in this exercise of transparency and accountability,” said Natalie Jaresko, the board’s Executive Director. “The importance of transparency and accountability cannot be overemphasized in Puerto Rico’s turnaround process.”

The board said that “after various requests for this financial data and the Senate’s documented refusal,” on Feb. 14, it filed a complaint in an adversary proceeding in the commonwealth’s Title III case under the Puerto Rico Oversight, Management and Economic Stability Act of 2016 (Promesa), which grants the panel access to relevant information from the government of Puerto Rico.

“We hope to avoid spending taxpayers’ money to compel any branch of the Government to provide the Oversight Board with the information necessary to achieve fiscal responsibility and transparency in Puerto Rico,” Jaresko said.

Fiscal board releases report detailing Puerto Rico’s bank balances


Puerto Rico gov implores U.S. Senate to pass supplemental appropriations bill

Senate President Thomas Rivera Schatz, Gov. Ricardo Rosselló and House Speaker Johnny Méndez (File)

SAN JUAN – Puerto Rico Gov. Ricardo Rosselló called on the U.S. Senate Thursday to approve, House Resolution 268, or the Supplemental Appropriations Act 2019, which includes recovery funds for Puerto Rico.

The bill provides $12.1 billion in supplemental appropriations for fiscal 2019, which ends Sept. 30, to several federal departments and agencies for expenses related to recent natural disasters.

The funding provided is designated as emergency spending, which is exempt from discretionary spending limits and other budget enforcement rules.

A provision would appropriate $600 million for the Agriculture Department to provide a grant to Puerto Rico for disaster nutrition assistance in response to presidentially declared major disasters and emergencies, such as Hurricane Maria.

“Puerto Rico must receive the federal resources necessary to sufficiently complete our recovery and reconstruction in a timely manner, and to assist the 3.2 million U.S. citizens who live on the island and are working each and every day to recover from the storm.

“I urge the U.S. Senate to pass H.R. 268, already approved in the House, which provides much-needed support to Puerto Rico to address critical infrastructure, education, nutritional, and housing needs on the island.

“In order for Puerto Rico’s recovery to be successful, we need federal investment that allows us to build back better. Anything less would be unacceptable,” Rosselló said in a statement.

The Office of Management and Budget recently issued a Statement of Administration Policy opposing as “excessive and unnecessary” the grant of $600 million for Puerto Rico’s Nutrition Assistance Program included in the House bill, which could help 230,000 new program participants.

Puerto Rico governor challenges U.S. Senate to cut red tape

Editor’s note: The following originally appeared in the Feb. 28 – March 6, 2019, issue of Caribbean Business.

SAN JUAN – Gov. Ricardo Rosselló appeared before the U.S. Senate Energy & Natural Resources Committee where he not only requested equality in federal regulations, programs and funding to transform Puerto Rico’s energy system but also complained that the Federal Emergency Management Agency’s (FEMA) red tape is threatening the island’s recovery.

Following the recent U.S. Court of Appeals ruling that declared the Financial Oversight & Management Board unconstitutional because the appointment of its members violated the Appointments Clause of the U.S. Constitution, Rosselló called for clarifications of the law to stop the Oversight Board from intervening in the government’s day-to-day operations, a move he called undemocratic.

Rosselló participated in the hearing with governors from the other U.S. territories, all of whom complained about delays in federal funding to help them rebuild, as well as a lack of federal healthcare funds.

The governor’s testimony focused on Puerto Rico’s ongoing fiscal and debt restructuring under the Puerto Rico Oversight, Management & Economic Stability Act (Promesa); the process of economic and disaster recovery and reconstruction, including the reconstruction of the island’s entire energy sector; the need for equality under federal laws and programs; and the need for new tools to spur economic development and competitiveness.

“However, although all of these are necessary; none will be sufficient in unlocking Puerto Rico’s full potential unless Congress works with us to end the current unequal and undemocratic territorial status and places Puerto Rico on the definitive path to full equality through statehood,” he said.

In his remarks, the governor listed his administration’s achievements in restructuring the debts of the Government Development Bank, Sales Tax Financing Corp. (known as Cofina) and reducing the budget, but said it was critical for the government to retain its democratically elected powers. He expressed concerns about possible conflicts within the Oversight Board.

“We are reviewing the Oversight Board’s report to the U.S. District Court about how it intends to deal with these issues and hope a meaningful resolution can be brought to bear in that venue. However, our government also supports efforts to apply basic transparency principles to the Oversight Board through federal legislation as well,” he said.

Regarding the Court of Appeals ruling, Rosselló said the government was still evaluating options for how to manage the practical impacts of this decision. But we anticipate needing further engagement with both Congress and the executive branch to ensure the corresponding actions do not imperil the progress we have made to date.

The lion’s share of Rosselló’s testimony centered on the need for parity in federal funding, as the island is approaching a healthcare cliff; on the need for $600 million in nutritional assistance funds; and on the roadblocks hurting the island’s reconstruction. Among these areas, he cited inconsistencies in FEMA guidance with respect to the implementation of Section 428 of the Robert T. Stafford Disaster Relief & Emergency Assistance Act, the alternative procedures for permanent work public assistance; “significant delays” in fixed-cost estimate approvals by FEMA; “unnecessary requirement of duplication” in damage description and dimension analysis by FEMA; and a “lack of willingness” by FEMA to end the form 270 manual drawdown process. “Our reconstruction depends on us completing these processes as diligently and quickly as possible, and we rely on FEMA to get the job done. Puerto Rico has only had about 45 ‘permanent work’ projects approved in the 17 months that have followed the hurricanes. In stark contrast, in the same timeframe, over 13,000 projects were approved for Louisiana and Mississippi in the wake of Hurricane Katrina. The discrepancy is startling,” the governor said.

Additionally, Rosselló said he was concerned about the federal administration’s departure from the New Orleans precedent in FEMA’s denial of Puerto Rico’s request for an extension of the 100 percent federal cost share for Categories A and B for debris removal and emergency protective measures. He also criticized FEMA for insisting the island rebuild facilities damaged by the hurricane to their original condition.

“To do otherwise would be shortsighted and would not only waste the many billions of dollars in taxpayer funds that would be invested in Puerto Rico and the U.S. Virgin Islands, but also put the taxpayer at extraordinary risk the next time a hurricane or other natural disaster causes widespread impacts to the islands,” he said.

In response to a question from the senators, Rosselló highlighted the impact that climate change is having on Puerto Rico, noting that the island of Palominito, on the east coast, no longer exists, as well as the erosion of the beaches. For those reasons, he said he wants to build an energy grid focused on renewables.

However, he acknowledged that wind turbines and solar panels were destroyed by the hurricanes, too. Besides completing the lease of the transmission and distribution system by December through a concession and the transformation of San Juan powerplant’s Units 5 & 6 to use natural gas, Rosselló said there are plans to convert the Palo Seco powerplant and another one on the southeast coast to use natural gas.

“We have an RFP [request for proposals] out for a peak unit substitution with a solar and battery component,” he said.

He also said there were 25 renewable projects in the pipeline, most notably a virtual powerline for which solar panels on the rooftops of public housing projects will be used to provide energy to areas in need.

“We have a commitment to incorporate nanogrids and microgrids that would be independent and run on natural gas…so consumers have choice. What we need is clarity on the resources. We have a plan and we have a strategy,” Rosselló told the Senate panel.

See the hearing here.

Puerto Rico Senate requests gov, Transportation Dept. cancel contract with toll operator

SAN JUAN – The Puerto Rico Senate requested Monday of Gov. Ricardo Rosselló and Transportation Secretary Carlos Contreras the “immediate cancellation” of the contract with Gila LLC, which operates the toll collection system in Puerto Rico.

The request was passed unanimously by Senate Resolution 857, authored by Senate President Thomas Rivera Schatz.

“I hope the contract with this company will be canceled once and for all and that a company that has the moral stature and operational capacity to provide an excellent service to the users of Auto Expreso be put in its place,” Rivera Schatz said. According to the measure, Gila’s contract expires July 1.

Gila has been operating on the island for more than three years, where “the goals set have not been achieved,” the measure reads, adding there have been continuing complaints received by the Senate, multiple claims made for undue collection of tolls, as well as the issuance of “illegal” fines. On July 1, the Transportation Dept. (DTOP by its Spanish initials) secretary called on Gila to respond to multiple complaints from citizens and was given 48 hours to resolve them. However, despite more than two months having elapsed since the request, complaints continue.

That is how the Senate president put in perspective that the arguments on the passage of the measure and of House Bill 1724, which would amend the Puerto Rico Transit Law to establish a $15 fine for not paying the Auto Expreso toll, are based on self-criticism of the government.

He said some “get irritated” but “we came here to work well, to comply and he whoever does it poorly, it has to be denounced.” The lawmaker added that for him the main problem was not the amount of the fine goes up or down but “that a vicious fine is not imposed on a citizen.”

“The Justice Department has been irresponsible with this, as has the secretary of DTOP, who in July gave GILA 48 hours to solve the problem. After that, the number of Auto Expreso users who have been victims of that company, hired under the Popular [Democratic] Party government, that number of victims has grown. Then it’s like, there being so many complaints from so many citizens who have legitimately shown in the media what has been an abuse, that they have been viciously fined and that it has been robbery…there are people who drag their feet. And that’s what’s happened with the secretary of Justice, Wanda Vázquez. And the secretary of Justice, too. Someone tell her the 48 hours have already passed. I would like to be calm about this matter. I heard the secretary of Justice say she is going to investigate it. It turns out that several months later, hundreds of thousands of fines, endless lines, finally a referral made by Senator Miguel Laureano in May and now God has touched the Department of Justice and now the secretary of Justice said she will investigate,” Rivera Schatz further said.

Regarding H.B. 1724, Humacao District Sen. Miguel Laureano said he had previously filed Senate Bill 642, which proposed establishing the same, lowering the Auto Expreso fine from $50 to $15, but retroactively. However, “the Fiscal Control Board opposed these and they were rejected and now we have a letter dated September 4 from Ms. Natalie Jaresko that says they reject bills 1723 and 1724; these are the measures we are discussing today.”

He reiterated that even if the board rejects the measure, it would be reintroduced, and that beyond the issues with the fine, the problem is the system Gila is administrating. He also alleged that the transfer of the contract to the company had multiple irregularities.

Senators concerned about USACE exit amid Puerto Rico grid repair

SAN JUAN – The U.S. Army Corps of Engineers (USACE) is officially leaving Puerto Rico next week, on May 18, even though as of Tuesday, an estimated 22,000 electric utility customers remained without service since September, raising concerns among members of the U.S. Senate Natural Resources and Energy Committee about whether the Puerto Rico Electric Power Authority (Prepa) will be able to continue the needed restoration and rebuilding efforts on its own.

On several occasions during the hearing, senators wondered, “Who is in charge?” USACE’s departure was seen as problematic because the agency manages contracts and is in charge of the receipt of materials for rebuilding the grid.

Contrary to popular perception, the hearing was not about establishing federal oversight for the power utility but rather for the committee to “examine the current status of Puerto Rico’s electric grid and proposals for the future operation of the grid.”

Senate Energy and Natural Resources Committee Chair Sen. Lisa Murkowski, R-Alaska (Screen capture of

Chairwoman Lisa Murkowski said officials wanted clarity about such issues as why the island continues to suffer blackouts and where have federal dollars been directed. “And then as we enter a new hurricane season, they are asking whether or not the grid is more stable and more resilient.  They are asking, what efforts are being made to incorporate alternative energy sources so that the island is not dependent on the global price of oil? And then they are also asking what the status of the PREPA privatization proposal is,” she said.

Charles Alexander Jr., director of Contingency Operations and Homeland Security for  USACE, said the agency’s authority to stay in Puerto Rico rests with the Federal Emergency Management Agency (FEMA). “We will do whatever the mission is but right now we were told [by FEMA] midnight on the 18th, there would be a transition,” he said.

Senators raised concerns involving an orderly transition after USACE leaves, following several past problems including the “raid” of supplies stored in a Prepa warehouse.

Alexander said the entity has conducted an audit of materials that would be turned over to Prepa, which include those needed to complete the restoration.

Prepa’s newly appointed executive director and CEO, Walter Higgins, said material acquisition was no longer an issue because supplies are either on the island or on their the way. While there could occasionally be a localized incident in which materials are not available to a crew at a particular time, it could be resolved by getting the materials from central to regional warehouses and out to the crews, he said.

“The important things now is the assumption by Prepa of the logistics operation that the Army has capably performed. Now we are in the process of Prepa’s material acquisition, people taking over the inventories, all the materials the Army has acquired for this; taking over the replenishment of future materials, receiving materials that the Army borrowed from Prepa and in addition…being fully prepared to operate the logistics of material activities in a way that supports continuing restoration,” Higgins added.

Asked if Prepa was up to the task, Higgins replied, “It’s going to be a challenge and we are probably going to get some help by FEMA for that but our people feel they are ready.” He acknowledged, however, there “will be growing pains.”

Asked about the challenges, Higgins explained difficulties in transferring the massive amount of materials from USACE to Prepa warehouses as well as complying with FEMA requirements for reimbursements. However, he said FEMA is willing to provide help.

Some of the senators raised concern about possible mismanagement and corruption at Prepa. Higgins said he is an independent CEO with the power to remove senior management as he sees fit and implement policy as dictated by the governor.

“I can tell you this with respect to Prepa, there is going to be in an organization of 6,000 people someone that is not doing the job that they have to…. I told senior management it’s time to be a part of the solution. If you don’t do things differently, I will have to make changes and it’s not going to be nice,” he said, adding that he will deal strongly with corruption.

Christian Sobrino, the governor’s representative to the Financial Oversight and Management Board that was congressionally established for the island, noted that Prepa has several entities overseeing the utility. He said the recently created Central Recovery and Reconstruction Office (CRRO) must approve all of Prepa’s contracts as does the fiscal control panel.

Some senators pointed to the fact that USACE’s mission has yet to be completed since there are more than 20,000 customers without power eight months after the island was hit by hurricanes Irma and María.

Puerto Rico Manufacturers Association President Rodrigo Masses (Screen capture of

In response to a question about rate costs, the president of the Puerto Rico Manufacturers Association, Rodrigo Masses, said there were barriers to companies owning their own power generation through renewables. He said that if it were possible, they could share energy with communities in an emergency. “We have not been able to do that in the past because typically Prepa protects its invoices. We are the biggest invoice. They may be concerned about this kind of threat,” he said.

To that, Higgins said Puerto Rico needs to change the way power is supplied because it is reliant on oil and, in addition, there is not enough generation where needed, referring to the widely understood issue that power is produced in the southern part of the island, while most of its consumption occurs in the north.

The new utility chief said there are plans to power plants in the north with liquefied natural gas. He added that while Prepa needs to be mindful of customers who want to generate their own power, they would need to be able to connect to the grid safely.

Some of the senators noted that if Puerto Rico wants to be resilient and produce 30% of the energy with renewable sources, system redundancy must be in place. Bruce Walker, the assistant secretary of the U.S. Energy Department’s Office of Electricity Delivery and Energy Reliability, spoke at length about strategies to make the grid more resilient.

Distributed sources

One effort involves the Energy Department’s National Laboratories, which are employing a Microgrid Design Tool to examine the feasibility of localized power sources and their optimal distributed siting, which could potentially enhance the reliability and resilience of the electric infrastructure.

“The Labs have completed preliminary microgrid assessments for industrial facilities that are on Puerto Rico Industrial Development Company [Pridco] sites, provided technical input and reviews for Pridco’s ‘Industrial Microgrid Solutions in Puerto Rico’ request for information, and provided assistance to Puerto Rico Electric Power Authority activities related to microgrids and distributed energy resources. These microgrids have the potential to offer Prepa further operational efficiency and reliability for Puerto Rico’s electric grid,” Walker said in his written testimony.

The Energy Department’s effort is developing a near real-time model of the island’s power system that will not only be used as an operational tool, but also for planning purposes. A modeling effort will also point out priorities to prepare Puerto Rico for the upcoming hurricane season as well as for long-term infrastructure investments.

The Southern States Energy Board, in association with the Energy Department, is working in coordination with the governor and the island’s legislature to establish a reliable grid and to develop a policy and legal framework to provide a regulatory process for possible privatization efforts.

The department has also prepared an “Energy Resilience Solutions” report for FEMA and Prepa that includes recommendations on investments in energy infrastructure.

Regarding Puerto Rico’s preparedness for another hurricane, Walker said the governor and Prepa should immediately ensure that mutual aid agreements are worked out ahead of time for quick support to be provided where there to be another disaster.

He also said the Puerto Rico Energy Commission (PREC) should coordinate a joint study with the Puerto Rico Telecommunications Board to determine and enforce safe loading requirements for utility poles carrying both electric and telecommunications infrastructure.

“Electricity transmission towers installed specifically for temporary emergency restoration should be considered for replacement, potentially by monopoles; many of the round monopole structures survived the 2017 storms. The PREC should finalize microgrid regulations,” he said.

Higgins explained that after receiving a $300 million loan from the government, Prepa has consistently collected slightly more than $50 million in accounts receivable a week, and that collections are projected to remain near that level through the end of Prepa’s fiscal year on June 30.

“It is worth noting that the continuity of restoration and mitigation-hardening work on the grid is dependent on the continuing receipt of federal funding, which is being closely coordinated with FEMA. Moreover, current liquidity at Prepa – including the $300 million loan from the Government of Puerto Rico – amounts to a reserve of less than two months of necessary operating expenses, which in my view is low for a company of this magnitude that is now entering another hurricane season,” he said in written testimony. The utility and the Puerto Rico Fiscal Agency and Financial Advisory Authority are exploring various options to address potential liquidity needs, he added.

Puerto Rico grid reconstruction to follow USDA Rural Utilities Service standards

Prepa’s CEO said the utility is going to carry out several emergency drills to ensure it is ready for another natural disaster.

Prepa has submitted requests for reimbursement of $1.6 billion in projects, $997 million of which has been advanced by FEMA, Higgins said. The power company is in the process of preparing additional project worksheets totaling $193 million, and service restoration will continue until all of Prepa’s customers receive service and are paying on a regular basis, he added.

When Congress approved the Stafford Act in February, it eliminated a provision that required facilities to be rebuilt to their pre-existing conditions in favor of allowing Prepa facilities to be redesigned. However, Higgins said that before facilities could be redesigned, power needs to be restored.

During the hearing, PREC’s interim chairman, José Roman, complained that the fiscal oversight board and the government were interfering with the regulator’s authority. However, Higgins said, “There is nothing better for a customer than a fair well-managed regulatory entity. And utility knows what rules are.”

In January, Gov. Ricardo Rosselló announced a transformation of Puerto Rico’s energy sector that is expected to take at least 12 to 18 months. It is expected to entail the sale of the public corporation’s power generation assets and private sector operation of the energy transmission and distribution system.

When Murkowski asked who would be interested in acquiring the utility’s old powerplants, Sobrino said a market-sounding process was being conducted.

“We see a lot of the Prepa generation fleet, part of their value is their location, part of their value is in operating them as new generation is being built. We are open not only to having an outward sale but having intermediate agreements throughout this process,” he said.

Puerto Rico Senate passes resolution to stop funding fiscal board

SAN JUAN – With the endorsement of all caucuses, the Puerto Rico Senate passed Wednesday a resolution authored by Puerto Rican Independence Party (PIP) spokesman Juan Dalmau, to stop the disbursement of funds to the island’s fiscal oversight board.

In an unexpected move, the upper chamber addressed Senate Joint Resolution 215 a few minutes before a legislative conference was held with Gov. Ricardo Rosselló at the Capitol.

“This measure was filed on April 2 of the current [year] in order to respond in a dignified and firm manner to what has been a caravan of abuse, disparagement and exploitation by the fiscal control board with respect to the people of Puerto Rico,” Dalmau declared.

PIP Sen. Juan Dalmau (Courtesy)

The pro-independence senator added that the entity in charge of the island’s finances proposes austerity and “dismantling the system,” and that it acts “as if they did not have a belt to tighten,” adding, “This measure is for the government to respond.”

According to the measure, “The Secretary of the Treasury is ordered to, during the current fiscal year, and the two subsequent fiscal years, not carry out disbursements for salary payments, operational expenses and/or hiring of services…” to the fiscal board.

New Progressive Party (NPP) Majority Leader Carmelo Ríos said that, despite having previously expressed that the measure was not a viable option, the Senate’s position changed because “we are ready,” adding, “A clash between the government and the board is inevitable. Today is the first step.”

Ríos further said: “The fiscal control board costs more than the House and the Senate combined. In fact, they cost more [money] and don’t produce anything…. If Congress believes the board is so necessary, let them pay for it.”

Senator proposes stopping Puerto Rico fiscal board funding

Meanwhile, NPP Sen. Migdalia Padilla spoke of the need for the Senate, the House and La Fortaleza, the governor’s workplace, to form a common front to fight the fiscal board.

“Once again, the Senate of Puerto Rico says enough is enough to the abuses of the fiscal control board,” she stressed, “In order to be able to address this, there must be a commitment from all parties: Senate, House and the executive [branch].”

Senate President Thomas Rivera Schatz said that the senators’ responsibility does not depend on the opinion or action of others. He added that, were it not to become law, those who supported the measure in the Senate will be able to “look Puerto Ricans in the eye” certain that they defended their interests.

Puerto Rico Statistics Institute nears consolidation

“Whether Senate Joint Resolution 215 becomes law or not, that remains to be seen, but that is not the cardinal, what’s cardinal is the message we want to send from here, so that they clearly understand we don’t give in and that we respond to the people who elected us, and that we defend Puerto Rican citizens,” he said.

As a joint resolution, the measure would need to be passed by the House and approved by the governor, who said Tuesday he was willing to do whatever was necessary when disagreeing with the federally established fiscal board.

“Does the governor [dare] sign this?” Popular Democratic Party Sen. Cirilo Tirado questioned. “If the [governor] has truly has will, let him start today and stop the disbursements to the fiscal control board and not acknowledge it any power in Puerto Rico,” he concluded.

The resolution was approved in a roll-call vote. The NPP and PDP delegations joined as co-authors of the measure, which was passed unanimously.

Senate passes resolution to reinstate Puerto Rico Constitution Day