A review by the Government Accountability Office (GAO) into Puerto Rico’s hurricane recovery efforts has found that FEMA has not approved any long-term electricity grid projects or given local entities clear information about how projects will likely be funded.
In 2017, hurricanes knocked out Puerto Rico’s electricity grid and caused an 11-month blackout—the longest in U.S. history. Efforts are underway to rebuild a more resilient grid.
GAO found that FEMA has worked with Puerto Rico to assess grid damage and estimate costs, and has recently committed about $10 billion to fund grid recovery. But as of October 2020, three years since the hurricanes destroyed much of Puerto Rico’s electricity grid, neither FEMA nor the Department of Housing and Urban Development (HUD) had approved long-term grid recovery projects in Puerto Rico.
In 2019, GAO made four recommendations to FEMA and HUD to address identified challenges in rebuilding the electricity grid in Puerto Rico. As of October 2020, FEMA had fully implemented one recommendation and partially implemented two others, while HUD had not implemented its recommendation. Specifically, FEMA established an interagency agreement with the Department of Energy (DOE) to clarify how the agencies would consult on recovery efforts. GAO’s latest review found that FEMA had taken actions to partially implement recommendations on improving coordination among federal and local agencies and providing information on industry standards. However, the watchdog says further steps are needed, including finalizing guidance on FEMA’s process for approving funding for projects. HUD has not addressed GAO’s recommendation to establish time frames and requirements for available funding.
GAO says until its recommendations are implemented, uncertainty will linger about how and when federal funding for long-term grid recovery will proceed. In particular, it is uncertain how available funding sources will support measures to enhance grid resilience to hurricanes, such as smart grid technology.
FEMA officials told GAO that additional funding sources could be used for resilience measures but that this would not be determined until specific projects are submitted to FEMA for approval.
Although FEMA finalized a $10 billion cost estimate for grid repairs in September 2020, several steps remain before FEMA approves funding for projects—a process officials told GAO they were drafting. HUD funding could supplement FEMA funding but HUD has yet to establish conditions for using these funds and has not established time frames and a plan for issuing this information. According to HUD officials, they plan to publish requirements in the first quarter of fiscal year 2021, but this depends on other factors, such as input from other federal agencies.
FEMA disagreed with GAO’s implication that permanent recovery work could not move forward until FEMA clarified certain policies and procedures. The agency added that additional funding opportunities may be available but also acknowledged the uncertainty of whether such additional funding would be raised.
HUD stated that the Puerto Rico Electric Power Authority continues to present significant financial and operational risks that must be acknowledged, mitigated, and monitored to ensure proper stewardship of the unprecedented level of federal funding to be provided.
GAO responded that its recommendations still stand and that it continues to believe additional actions are needed.