Puerto Rico’s power play: How should billions of energy dollars be spent

Environmental and community groups sued FEMA and the Department of Homeland Security last month over two grid projects, accusing them of violating the National Environmental Policy Act by failing to consider environmental harms that resulted in the rebuilding of “outdated, inefficient, and centralized fossil fuel-based electricity infrastructure.”

Congress allocated about $14 billion to federal agencies including FEMA and the Department of Housing and Urban Development for Puerto Rico to address the unprecedented destruction caused by Hurricane Maria in 2017 when it roared ashore, killing almost 3,000 people and triggering blackouts that lasted nearly a year. Last September, Hurricane Fiona left thousands of residents without power for 12 days and caused intermittent outages for many others.

Climate advocates want FEMA to spend those billions on rooftop solar, storage and other forms of distributed renewable energy for communities at risk of losing power — rather than the centralized power system that was largely wiped out in 2017.

Augusta Wilson, a senior attorney at the Center for Biological Diversity, one of the organizations involved in the lawsuit, said FEMA is on the cusp of spending billions of dollars on permanent work to rebuild Puerto Rico’s “highly unreliable” electricity grid, rather than investing in resilient projects as a viable alternative, which it “just hasn’t considered as part of its NEPA analysis.”

“FEMA’s current plans really fly in the face of the will of the people of Puerto Rico,” Wilson said.

A FEMA spokesperson declined to comment, citing a policy against speaking about active litigation. But the agency has allocated $11.4 billion to Puerto Rico’s government-owned utility, including the largest single allocation in FEMA’s history of about $9.4 billion in emergency spending after Maria to restore damaged substations, buildings, distribution lines and transmission system. As of April 20, FEMA has approved about 120 projects under the program, representing about $1.5 billion.

Jenniffer González-Colón, Puerto Rico’s representative in Congress, acknowledged the complexity of dealing with multi-agency processes, coordinating participants and responsibly handling such a large pot of money. “But the reality is the people do not see it is happening fast enough,” she said.

But she also said the reconstruction of Puerto Rico’s transmission and distribution system should be a priority to stabilize the network in the near term before long-term plans can be implemented.

“Forcing agencies to go to court before work can continue only delays these processes even further, and does not provide electricity to any home or any industrial plant and puts a risk to the funding,” González-Colón said.

Development of renewable energy projects has ramped up since Fiona, but Puerto Rico is well off the pace to reach its legally binding target of 100 percent by renewables by 2050, as well as its near-term target of 40 percent by 2025, with clean energy generation still in single digits.

“What’s not making [hitting the renewable target] possible is the political will,” said Federico Cintrón Moscoso, director of El Puente Puerto Rico, another of the organizations suing FEMA.

DOE also has $1 billion available under a separate pot of funding Congress allocated for Puerto Rico in the omnibus bill last year. Six Democrats urged Energy Secretary Jennifer Granholm in an April letter shared with POLITICO to ensure DOE spends the money specifically on solar and storage. The DOE closed a request for information on potential projects on April 21 and expects the first awards to be announced this fall. It also plans to issue a request for proposals on deploying solar and storage for single-family homes.

Rep. Darren Soto (D-Fla.), one of the letter signees, said the group wants to make sure the money gets out the door in the right way and feels the DOE is “moving at a steady clip.”

One of the main reasons the Energy Department was tagged to implement the $1 billion program was because lawmakers and people in Puerto Rico wanted to avoid working with agencies associated with years-long delays in distributing funding under recovery and modernization efforts, according to the letter.

But one Congressional aide noted the letter was sent partly because of concerns from people in Puerto Rico about how Gov. Pierluisi was positioning his agencies to control the money flow — and whether they could effectively distribute the funds that are intended to provide solar power and battery storage to households with individuals with disabilities and low-income households.

“It would be hard to underestimate how problematic it would be if any of that [$1 billion] money was used to prop up fossil fuels,” the aide said.

FEMA has the ultimate decision over which projects should be supported, Wilson said. But climate advocates say the agency’s rebuilding mindset has yet to implement the Biden administration’s efforts to address the pollution that takes a disproportionate toll on communities of color, low-income areas and rural residents.

With Biden’s Earth Day order on environmental justice and his administration’s Justice40 initiative, which aims to steer 40 percent of federal benefits to communities that face the heaviest burdens from pollution, there is “a lot of public policy coming out that you would think there would be a reversal of how things are managed in FEMA, but that doesn’t seem to be the case in Puerto Rico,” said Laura Beatriz Arroyo, a senior attorney with Earthjustice, which is also involved in the FEMA litigation.

FEMA does have at least one big fan: Gov. Pierluisi. In an interview with POLITICO in March, he praised the agency’s response to Fiona and “the breathing room” FEMA has provided in helping protect the territory from future hurricanes by providing additional generation to supplement Puerto Rico’s power plants. Thanks in part to FEMA’s efforts, he said, “our grid has become more resilient.”

But he’s drawn pushback from solar energy advocates for his administration’s plan to spend $100 million in federal funds for a program that would finance up to 30 percent of the costs for middle-class homeowners to install solar and battery systems.

That effort, the governor’s office said, is “intended to ensure that all sectors have access to solar systems.” And more than $400 million, the vast majority of HUD’s Community Development Block Grant funding available for these incentives, will go to low-income families, which will also be prioritized in the DOE program, according to the statement.

Another $800 million in HUD money will fund development of community microgrids serving low- and moderate-income households throughout the territory, it said.

Solar industry players warn the proposal is having a “chilling effect” on installations because people who can afford the systems are canceling orders and waiting for the incentives for those with higher incomes to kick in. This echoes complaints often levied at these types of incentive programs on the mainland that they end up benefiting more affluent households than those most in need of government support.

One solar company executive called it a “reverse Robin Hood,” taking money that should be funding systems for the poorest residents in a territory where the median household income is just shy of $22,000. The new income threshold would make “everyone except for Bad Bunny” — the popular Puerto Rican singer and activist — eligible for the incentive, said the executive, speaking anonymously because of competitive and sensitive relationships with government officials.

A National Renewable Energy Laboratory study last year identified 203,000 “solar suitable” households in Puerto Rico in the very low-income category. In non-metro areas such as the municipality of Salinas, which was devastated when Hurricane Fiona dropped 32 inches of rain, a very low-income household is tagged as a family of four that makes about $12,300.

“There’s not enough money to go around for that [lower] income category so there’s very little sense for going off that bracket,” said Javier Rúa-Jovet, chief policy officer of the Solar + Energy Storage Association of Puerto Rico.

Charles Venator-Santiago, associate professor in the University of Connecticut’s Department of Political Science and El Instituto: Institute for Latina/o, Caribbean and Latin American Studies, noted Pierluisi is running for reelection next year — and said it “wouldn’t surprise me if some middle-income residents are selected to receive these funds” for political reasons.

Cintrón Moscoso said the governor and local agencies are obstacles to the territory’s renewable energy transition, controlling the flow of the money with limited transparency and public participation.

“Right now, I don’t see anyone in the government that is fighting for renewable energy in a very serious way … and that is very worrisome.”