We are meeting to hear testimony on examining the challenges and puerto ricos recovery. We welcome you all here today. I ask for consent for the gentleman from california. The gentleman from new york. And, the gentleman from illinois and the gentleman from new york, with the committee to participate in the hearing. If you notice, these three are already here. If there are no objections, that is so ordered. Under Committee Rule 4f, any oral statements i ask for consent that any member who wishes to make an Opening Statement be made part of the hearing record if they are submitted to the clerk by 5 00 p. M. Today. Without objection, that will be so ordered. So, first, i appreciate the witnesses being on the panel. Lets start with the Opening Statements. I recognize myself for the original Opening Statement. We are here today to look at the hurricaneimpacted territories of puerto rico in the Virgin Islands. Next week the governors will be here with us also to testify. Before we start i wanted very clear that our thoughts and prayers are those who are still suffering hurricane damages. I also want to thank the Emergency Responders for their hard work and kind efforts. There are still in puerto rico and the Virgin Islands, but today we will concentrate on rico. The hurricanes may have gone but my insides now threatening people. This is not over yet. There is much work that has to be done. I wish at the very beginning, the committee is going to examine the challenges to recovery and the role of financial oversight. Two hurricanes exposed a state of affairs in puerto rico that it existed before the hurricanes made landfall. Decades of mismanagement led to a paralyzing debt burden. Last Year Congress stepped forward with the builder was signed into law to try to rectify the problem. The board has been focused on governance reforms. But now with this hurricane, there is also a other works in one must be doing in the boards work has become a even more obligated as we move forward. For example, we have to deal with the puerto rican electrical power authority, which was already bankrupt. Severely mismanaged with a long history of an adequate maintenance and political cronyism and recovering the power grid remains of paramount interest and importance to us. Energy is not only interested but if it is to economically recover it has to have a reliable, abundant, Affordable Energy and that is really one of the key elements if were going to do anything whatsoever with that. I appreciate the appointment and i appreciate the fact that the board is now looking at contract review policies. These are decisions that make an important because we do not want another situation like whitefish to happen again which may have had some initial purpose to it but the procedure was certainly suspect. I appreciate that there has to be some kind of oversight for this going through there. What we are concerned with today is making sure the oversight Management Board has the tools they need to fulfill the responsibility and move forward. Also, to fulfill it in cooperation. We have four entities on the island working for recovery. The commonwealth government, the Oversight Board. There are also two federal agencies, fema and the army corps of engineers. All four of them have to Work Together. Otherwise it is simply chaos. This cannot be an adversarial situation and what we are going to do today is make sure we have the tools necessary to see that go into fruition. The board is not going to go away until their job happens to be finished at some particular time. So we are not going to describe plan. Our goal is to fix the problems and help the people. The problems are too serious for us to politicize and try to make headlines. We owe the citizens more than that. Last week, or yesterday actually, mr. Graves came back from puerto rico with representative gonzalez. 10 days ago there were five of us who went down there. Along with the majority leader and minority whip to see firsthand what is happening down there and but the Virgin Islands and puerto rico. It is clear from what we saw that the devastation and suffering is sobering and it is real. That what was the positive aspect of this, even know their homes or broken their spirits are not. We went into the interior into this particular community and as you can see, there is a bridge that connected the one side of the valley with the other side of the valley. That bridge was washed out in the hurricane. That is all that is left with that. The ingenuity of those families is brilliant. They had jury rigged this contraption. A zipline with a supermarket cart attached to it where they can take it from one side where the stores are and then manually bring it to the other side. An ingenious contraption. Also one of those things, you will notice there is a wooden ladder going up. Give me the next slide if you would. Simply, is tony here . Representative brown was the first one to go across the river bed to go up that ladder. Followed by the rest of us. I promise you osha did not actually certify that particular ladder. As we walked to the other side to meet those families, i promise you that and i think it can be verified, going down was a lot slower than was going up. Up that ladder. But this is what i found on the other side. The governor was there. I have to give kudos, no one works harder to try and help her constituents down there than representative gonzalez says. She is not only the first female representative in puerto rico, she is also the youngest and that energy is showing. She is gone with every single group that is gone down there to show them what is taking place. I want to point out the teenager standing with us. I had the opportunity to meet them on the other side. He is one of the 22 families cut off from the rest of the village, using the zipline and the wooden ladder to get from side to side. That kid was amazing. He was a fascinating kid, interested in what was going on, intellectual, fluent, he wanted to become involved in the future. I was excited talking to him because that kid, that kid is the future of puerto rico. That kid is why i know that puerto rico is not going to just recover, they are going to succeed. The spirit that he had is the kind of spirit we saw in all of the citizens to whom were talking you realized they were not after someone to blame but after a way to make their lives better. I want to make sure we have the tools. We have the tools to make sure the dreams that kid has will be realized. That is puerto rico to me. With that, i will apologize for going over but i want you to see that kid. And i will yield to the Ranking Member. Thank you mr. Chairman. Yourself and members have gone to puerto rico and have firsthand experience and observations about the urgency and the need for this congress to respond in a proactive way and a transparent way, and weighed the deals with the emergence and urgency as it is now and adopt the attitude that as we go forward, how to build sustainability, resilience for the longterm both in the economy and the growth of the rebirth of the infrastructure of the island of puerto rico. If a man is drowning in the ocean, you do not stop to tell him he should take swimming lessons. If a woman is having a heart attack you do not take time to preach to her about the value of the lowfat diet. Instead, you act immediately to save lives. Our american brothers and sisters living on the island of puerto rico are drowning in the ocean. Their water, sewer, transportation, health, Banking Systems are in the midst of what we would call grave danger. If not close to a fatal heart attack. Puerto rico quite frankly does not mean the lecture does not need a lecture. They do not need advice. Puerto rico at this juncture in time and history, what they need his help. Our help. In a month and a half, after Hurricane Maria hit, with wind of 150 miles an hour and two thirds of the puerto rican households still without electricity and 20 without potable, Safe Drinking Water but at the island continues to see landslides. The record flooding that occurred, hundreds of blocked roads, thousands of fallen trees, damaged homes and buildings. Tens of thousands of people of left puerto rico and thousands of businesses remain close. Puerto ricos government expects an estimated cash flow also 1. 7 billion as a result of lost collections with an additional 1. 18 billion lost in water. Those two agencies are currently running on cash reserves. The American People on puerto rico are counting on us to help rebuild the island, starting with the basics. The disaster supplemental spending package is a start. But we need to do much more and we need to do it immediately. The decimated electrical grid and water and sewer systems must be restored and no more sweetheart deals to flybynight companies. That needs to stop in it needs to stop immediately as well. Fema was slow to arrive and slow to engage. Even in the most recent amendment on the second which requires a 10 cash assistance, also putting out external this attempt to get more blood out of a stone also needs to stop. Once the lights are back on and the families have access to clean Drinking Water and medical care, then congress can turn its attention to the future of the island and its economy. But now were being asked we should not be asked to look away from this administrations embarrassing recovery effort and respond to puerto rican families not with help they need but without that would please investors. To use this Natural Disaster as an excuse to give even more advantages to investors who bear much of the responsibility for the shameful fiscal crisis that puerto rico finds itself in his wrong. To use this Natural Disaster as an excuse to say that those living on the island no longer deserve flood prevention regulations or strong protections for clean air and clean water and they no longer deserve the chance to participate in transparent public planning processes would be wrong. Title v gives investors the dual gift of deregulation and privatization for nobit infrastructure projects. If the majority would like to use their devastation to ram these projects through even faster, then that would be a mistake. How is it that is in the interest of the people in puerto rico to get rid of the ability for the public to comment on these projects or to remove the Energy Commissions authority to make sure that the project will work with longterm grid plans. And the oversight has enough power in does not really need more, our response to human suffering has to be about food, shelter, water versed. Not deregulation or politics. It is time to assess the damage, get a real relief package together as fast as possible and start rebuilding in a sustainable way. I hope all my colleagues will join me in getting relief to people who need it most and resist the urge to hand over a price tag or insist on weekend Environmental Standards in public processes in exchange for aid needed to save lives and rebuild communities. With that, mr. Chairman, i yield back. Thank you. We will not recognize our witnesses who are here. Starting from my left. The executive director of the board. I am coming close. Revitalization coordinator of the financial end Oversight Board of puerto rico. Also, mayor perez otero who is here. I appreciate you getting here at the last moment. I realize it was a restaurant to it was a rush job to get here. Thank you for joining us. Do you speak german . I do not speak spanish. When you are recognized, you can tell us the name of your community and where it is because otherwise no one will ever find it if i try to do that. So thank you for being here. I am a little bit chagrined. Were going to have a little bit more panelists here. Last week, two of the panelists decided not to be here. One was the director specifically to talk about the whitefish contract. I understand there are circumstances that require their efforts back on the island at i am sad. A couple weeks ago we requested some documents, those documents arrived very late on friday, we have only looked at them briefly but already there are some circumstances within those documents which add more questions which means at some point i would like those to be answered and someone needs to look at that perhaps next week. I am very disappointed they are not here to answer our questions today but that is the way it is because obviously we will take them at their word that the work on the island is important and needs to be done. If you are not here when i showed the sides, ditch of the showed the slides. I did show the slides of you going down the mountainside and through the river and up that ladder. I want you to know that you still have your in utah to shame. You went down and climbed back up again. It is your fault because you were the first one to go over and you shamed the rest of us and following you. Do you want to respond . Is a point of personal privilege, want to thank you for ensuring that i was able to accompany you and leader mccarthy on what i thought was an important and enlightening delegation to puerto rico, the u. S. Virgin islands, and the keys. And i will be glad later today to share some of my observations. Thank you, mr. Chairman. Thank you. Thank you to all the members have actually been down there. Eventually, you will shave, right . Nevermind. [laughter] i have been seeking to be more like you for quite some time now. I was going to color my hair white but i figured my wife when not be happy with that so i decided just to have speckles in my beard. If you want to be more like me, you will need more than just speckles. I would like to tell the witnesses at Committee Roles give you five minutes for testimony. The written part is already part of the record. If you have not been here before, you have to turn the microphone is on to speak. Please watch the clock in front of you. When the green light is on, that means everything is cool. When it hits yellow that means like in traffic coming up to speed up as fast as you can. When it goes to red, that is when we want you to stop. Dont make me have to cut you off. Ill do to our members but dont want to have to do it to you guys. You are recognized for five minutes. Thank you. Members of the committee, mayor, i am natalie, executive director of the puerto rico financial oversight and Management Board. Thank you for this opportunity to update. In light of the tragic damage to the island by Hurricane Maria and to a lesser extent, hurricane irma. I have submitted written testimony. I look forward to the questions. I want to use my oral statement to make a few points. I want to thank this committee, congress, and the American People for the generous justpast emergency aid package. We are deeply grateful for the extraordinary efforts of fema, the army corps of engineers, and all of those involved in this historic relief effort. I wanted dolls the tireless efforts of the governor, his administration, local mayors, and all of those in puerto rico who are saving lives sense of saving lives and supporting Recovery Efforts. Having served as minister of ukraine and times of war and fiscal crisis, i understand the difficult measures required in times like these. I lived through the painful process of determining how to use limited funds to determine how the government could effectively govern despite the realities. I know the importance of the need to inspire confidence and allow people and businesses to play their vital role in rebuilding puerto rico. The board was established by congress to support the fiscal and economic turnaround of puerto rico as well as restructure the sizable debt obligations at the commonwealth and a number of Government Agencies have incurred over the years. The board is fully up to deal with the debt that puerto rico faced before Hurricane Maria. After the hurricane, it is even more critical that the board be able to operate decisively. The board therefore asks that congress underscore the importance of the board in the posthurricane environment by clarifying we have the Critical Role to play and any funding which will in large measure defined puerto ricos future given the devastation to the economy as in any long term liquidity mechanism, clarity will provide more agility and certainty. It will help avoid more costly litigation and reduce the risk to the overall fiscal and economic recovery of puerto rico. I would like to conclude by outlining for ways we have been pursuing our mission since the hurricane. First, discipline with liquidity processes. In my written testimony i have tried to summarize that hurricane caused liquidity needs as we see them. In short, because of the damage to the ability to collect revenue, destruction to economic activity, the commonwealth and its instrumentalities are facing billions of dollars in cash shortfalls just to provide the basic functions of government. It is essential that the process of providing liquidity assistance is not become detached from the physical process that is the essence of our charge. The longerterm solution that congress is contemplating in the next emergency supplemental should have formalized mechanisms to tie relief to fiscal plans. Revision of those fiscal plans, we are well aware that as you have stated mr. Chairman, will have to revise the this go plans in light of the hurricanes devastation. This process will take several weeks. The board will hold three listening sessions. All will be invited to provide input as part of the process and we have also agreed that the federal mediators can hold two additional sessions with credit or stakeholders. Our aim is to move deliberately to prepare and approve revised plans. The deadline for the commonwealth to submit these draft fiscal plans to the board is december 22, 2017, with review and revision ongoing through february 2, 2018. Deadlines for other entities will follow closely. Third, a chief transformation officer. The board has recently named noel zamot, with all the powers of ceo and reporting to the board. We believe this is essential to restoring service and creating a resilient and accountable power system for the island. While the board is confident this gives us the power and responsibility to do as we have done, some parties are contesting our authority in proceedings before the judge. To avoid delays and litigation, congressional reaffirmation is welcome. Fourth, contract review. We have implemented a policy as a tool to ensure transparency throughout the government for the benefit of the people of puerto rico. The policy applies to all contracts in which the commonwealth or any covered instrumentality is a counterparty, including the federal government, state governments, and private parties. All contracts of 10 million or more must be submitted to the board for approval. The board retains the authority to adopt other methods, such as random sampling of contracts, to ensure they promote market competition. Mr. Chairman, Ranking Member, members of the committee, we appreciate your concern for the american citizens in puerto rico, and i pledge to continue to work with you to do all we can to meet the new challenges. I look forward to your questions. Thank you. Mr. Zamot. Five minutes. Welcome. Mr. Zamot chairman bishop, Ranking Member, members of the committee, it is an honor to appear before this community. I currently serve as coordinator for the puerto rico financial oversight and Management Board. Ive been named to serve as restoration officer for the electric power authority. A motion seeking confirmation is before the Court Overseeing the restructuring of debt. My written testimony briefly describes my current role. I will use my time in this oral statement to outline key aspects and my plans. As mentioned, i do not want in any way to appear to be presumptuous about the outcome, but also understand the need for information. I believe the court will understand that my testimony represents my plans if i am confirmed. The role is essential both to deal with the shortterm crisis and the longterm transformation. We need action to create a fastmoving entity driven by efficient, durable, and sustainable power for the island. I have three principal objectives. First, bring all available resources to restore power to puerto rico as quickly as possible. Second, develop and implement the plan, ensuring the nearterm recovery activity is consistent with the longterm vision. Third, ensure that the utility has the implementation of a plan of adjustment. The objective is a utility that provides stable, reliable, costeffective power. The first objective requires us to leverage all available resources. Much has already been done, but there is much more to do. Based on my in directions to date, the army corps of engineers, department of injury, department of energy and fema can provide us better resources. We can do much more to involve industry groups. During this first phase, organizational structure will be of critical importance. I will employ an approach i used with success in the middle of chaotic and uncertain environments. I have followed this in the military, where i led organizations in peacetime and during emergencies, and in the private sector, where i had to transform an organization. I believe in establishing a straightforward, clear chain of authority with welldefined roles and responsibilities. I will retain key leaders on my staff to enable speed and effectiveness. I would like to highlight two key roles. The chief Operations Officer will be responsible for daytoday operations. This will be a senior leader, but will be augmented by an industry executive identified in conjunction with input we are receiving from the institute. The storm boss will liaise directly with fema, the government, mayors, engineers, as well as other stakeholders. This person will be responsible for identifying and integrating help as needed, as well as acting as a primary stakeholder to ensure plans are in coordination with the longrange plan. Ive also identified Key Executives to serve on a board of advisors. These are ceos from public and private utilities who have volunteered to bring their expertise. I will also rely on an internal group of worldclass experts from multinational utilities, the energy sector, academia, and more. The second objective is to transform under the fiscal plan in conjunction with the government of puerto rico. This reflects a transformation in broad agreement with puerto ricos Energy Strategy. The end state is to provide stable, reliable, costeffective power via a grid that incorporates best practices to act as a catalyst for sustained growth. Puerto ricos strategy calls for 50 renewables by 2040. Regional grids with generation close to demand, and control systems to provide resiliency. All wrapped by an empowered energy regulator. We need to do just that. Not only for generation, but to attract Innovative Capital solutions in the private sector. Him and him and we will update the existing fiscal plan based on post maria reality. We will have to rebuild the infrastructure with virtually no revenue. Congress and the administration created a program in the recently passed supplemental and made an eligible borrower. Our colleagues have worked with us to identify the proper programs to rebuild the asset base and offered their considerable expertise. We will work with the governor, officials, industry groups, as well as thought leaders. We are integrating outside stakeholders into our process, with recurring meetings. We will have an initial draft by mid december and a more polished version by midjanuary. This should include sufficient detail to begin crafting actionable execution during the Second Quarter of 2018. Finally, implementation of the fiscal plan. This is a legally enforceable outcome of the court proceedings. This ensures a transformation of the utility far beyond the termination of my tenure upon approval of this plan of adjustment. The Court Process also shares the input of creditors and recognition of their legal rights. I look forward to answering your questions. Thank you. Finally, mayor perez. Mayor perez thank you, chairman bishop, Ranking Members, and all members of the committee, for having convened this hearing and allowing us to share our experiences. I especially recognize our resident commissioner, who now is our advocate for recovery. I come to you as mayor since august 18. I received a very special welcome in my office. My municipality is diverse. We have upper income neighborhoods, industry, shopping, a military post, but also working class neighborhoods , Public Housing projects, economically distressed communities, and hard to reach rural areas. There was damage to every aspect of infrastructure and the economy. In the immediate aftermath, besides the collapse of power and communications, and today, we still have from 75 to 80 of our families without electricity. Our municipality suffered major damages, Three Bridges washed out and another four compromised, resulting in 15 to 20 families having no vehicle access to their homes. Several roads collapsed. Most of our rural areas lack Water Service due to pumps being offline. 3000 families lost their homes or had it severely damaged. It was a challenge to respond, but we stepped forward. And from the joint effort of puerto rico and federal Government Agencies, over 30,000 families have received food and water supplies, but these have been always reliable. The city has received 10,000 gallons of diesel fuel, but we used almost 3000 every day. We are being assisted with disposal by engineers. Work is being done and we are grateful for the response of the administration and congress, but more is needed. Municipalities are the First Responders. Being closest to the people, but with most of our business is our businesses closed, no power or water or fuel, how do we pay our workers and expenses . We have lost a lot of revenues. Congress passed legislation that provides up to 4. 9 billion support for puerto rico, precisely due to the needs of basic Public Services functioning in the face of loss of tax base. The government has been granted an equivalent of almost 20 of its budget. The municipality needs the same benefits to continue providing essential services that our people need. Another need is disaster Housing Support benefits that can extend for at least one or two years. Currently available housing vouchers are too low compared with the number of families who lost their homes and are living with a family or with a neighbor. Another is caps on housing rehabilitation. So that families may rebuild with greater resiliency. Is truly an expansion similarly, an expansion of section 108 funds, so that municipalities can Better Direct them. In a situation like this, it is important that funds are used effectively. This cannot end in more bureaucracy. I believe god put me in this trying time at the head of a city of 100,000 people to do them justice and make a difference. We are called upon to do justice and make a difference for the 3. 4 million u. S. Citizens in puerto rico. It is not a time just to put on patches, but to make permanent fixes, looking toward the future. We cannot move the island away from the caribbean. Congress and the Administration Must move to help our people. Members of this committee, federal help has enabled puerto rico to survive and start our recovery, but more is needed. I encourage you to listen to our governor and resident commissioner. Thank you. I thank all three witnesses for your oral testimony as well as your written testimony. We will now start the questioning process. Since we were originally going to have two panels, and now we have one, i gave our witnesses extra time. I appreciate mr. Mayor being here as a representative. Thank you for the specifics you gave us. Im going to warn members, you are not going to be as nicely treated. You have five minutes. Ask a question and give 30 seconds to answer it, or dont ask it in the first place. Im going to go first, if i could. So you are responsible for me. If i go over five, shut me up. Ms. Jaresko, if i could start with you, in august, there were some in the creditor community that had a title iii case to appoint a receiver done by the courts system. The Oversight Board appears to have embraced that particular idea with an independent oversight that is needed with the recent urgent motion to appoint the chief transportation officer. Why did the Oversight Board reject the request from the court and why do you believe the Oversight Board has the ability to appoint a chief transformation officer . Ms. Jaresko you are correct. At that time, in a set of very different circumstances, the board did not agree with the request. We see the situation today as different and requiring a new set of skills, resources, and additional focus. We no longer are going through solely a title iii process. We are responding to this devastation. For 40 years, prep has not served the people of puerto rico well. Our goal is to ensure that these shortterm efforts to immediately and quickly restore electricity are united with the medium and longterm requirements of making electricity not the achilles heel of a damaged economy, but a solution to a new, revitalized economy. Mr. Zamot, title five was supposed to help expedite the process without any arbitrary roadblocks. Do you see roadblocks prohibiting the construction or pending approval of critical projects that we could address in some way . Mr. Zamot thank you for the opportunity to answer. This is a great tool for economic recovery, but it is incomplete. We would appreciate some clarity on the powers that title five gives to the coordinator. Theres a number of issues, for example the ability to follow permitting processes and ensure they are executed properly, the ability to ensure that title five projects are actually compatible with the rest of the entities. And finally, how do you incentivize additional investments in area that are critical to puerto ricos economy . Do you think these require statute changes to give you that authority to expedite the issue . Mr. Zamot i will defer to the committee on what the solutions would be. A clarification on the powers of the board would be appropriate. Fair answer. Mayor, can you share with the committee your experience working with fema in the aftermath of the storm . Mayor otero at the beginning, it was hard because no communications. We just had fema at san juan and it was very hard for the rest of our mayors to communicate and to receive some help. After that, i think it was the best thing, they found some people, and the help is getting better, and the water, the food, and all the help from fema and the corps of engineering is getting to our municipality. But at the beginning, it was very hard. We were expecting that maybe some municipalities of some areas will be good. The communications were down. Roads were blocked. It was very hard at the beginning. Can you just ive got 56 seconds. Communicate the challenges you are still going to face Going Forward with the state, the board, and federal agencies in your community. Mayor otero right now is how they are going to respond to give the benefits to the families. Weve got thousands of families living with their families or with a neighbor, but that is not permanent. There is a cap of 30,000 to rebuild their houses. If we are going to rebuild and make them the same as they were, were going to be here maybe next year, maybe next week, i dont know, maybe in a month. Thank you. In the nine seconds that remains, pronounce your community for me. Mayor otero guaynabo. It is near san juan. Thank you very much. Thank you, mr. Chairman. I also want to thank all the witnesses for their attendance, and for being here to give us more information and answer our questions. Ms. Jaresko, the plan last year contemplated reducing puerto ricos annual debt payments by 79 . In the wake of Hurricane Maria, advocates in puerto rico and for puerto rico are making the case that that devastation means the 79 should be kicked up to possibly full debt cancellation. Should we anticipate that the board will be considering further Debt Reduction in the revised fiscal plan under ms. Jaresko thank you. It is very difficult for anyone in puerto rico to see the future at this stage. So much depends on you, the congress, the administration, and how much funding will be appropriated for puerto rico. We will begin this fiscal process to determine how the island can manage governance, whether or not there are Funds Available for a variety of needs on the island, including repayment of the debt. Faced with the liquidity crisis we have today, and the requirements youve adopted, we will require longerterm liquidity funding. In the shortterm, this will be difficult for creditors. In the future, much depends on your response. Another question, if i may. Do you or the board hold a view that, relative to title five, waving or eliminating additional environmental safeguards or regulations will accelerate the recovery in puerto rico . You and mr. Zamot as well . Ms. Jaresko i certainly believe that further expeditious permitting is a requirement. I want to underline that it is both federal, commonwealth, and municipality permitting that needs to be expedited for any private Sector Investment to become a quick recovery. Do you think that is needed . Mr. Zamot my view is that Economic Growth and fast tracking projects is not inconsistent with being good stewards of the environment, and we have a robust process within the working group to ensure that the residents of puerto rico if i may follow up with you, you straight the proposed trash incinerator as a project that could come to fruition. I see an example of why title five in this instance doesnt work. Public comments about the project are overwhelming in opposition. It is opposed by those mayors groups. It was stalled in part because it couldnt get a permit to drain 2. 1 million gallons from a wetland. Farmers and residents concerned about the effects on their health. It could undermine recycling programs. It flooded during the hurricane. We have a before and after situation on the screen. And released hundreds of tons of toxic ash that could release into surrounding neighborhoods. And it requires a major loan from the federal government to go forward even though it is privately funded. Is that what we can expect in terms of title five critical projects . Mr. Zamot there are many voices in the democratic process that voice their concern, but there are any number of voices on the positive side. We dont see this as a power project. It is really a Waste Management project. Puerto rico has a crisis in Waste Management and landfill use that has been identified by the epa. The epa has been supportive of this program. I live in massachusetts and the process in place right now is to assess risk factors. Under title five, we would waive the process of risk factoring. How would you contemplate assessing risk . Mr. Zamot this process already came with its permitting in place. Thank you. That is not the answer. Thank you, mr. Chairman. I appreciate your commitment to making puerto rico more successful, and no one should question your commitment to that. I share your disappointment that all the invited witnesses were not here today. Mr. Zamot, i would like to ask about Electricity Generation. Hopefully you can help us on these questions. Is it safe in assuming that pretty much 100 of the electricity generated in puerto rico today is from burning oil . Mr. Zamot i would say it is 96 . There is approximately 4 that is renewables. As we know, fuel oil is very expensive and dirty. Mr. Zamot that is correct. I like the plan. I think you said by 2040, 50 renewables, 50 natural gas through liquefied form. Have you identified investors who are willing to make that Huge Investment . Mr. Zamot there are a number of investors that are bullish on puerto ricos longterm prospects. We in the board and in my role as coordinator received a lot of proposals, a lot of questions about how people can bring Innovative Capital solutions to benefit the reconstruction of the grid and the people of puerto rico. I would urge you to keep pushing in that direction. I dont think nuclear or coal is going to be a solution. Renewables are great, but to provide that much is unrealistic. I welcome the discussion about lng. Another issue possibly, the jones act. I want to commend one of our representatives who is here today for speaking out on this issue. I think it is a problem for puerto rico. I would like to find a solution to the jones act problem in general. Does that affect lng imports . Mr. Zamot were looking at a fuel mix that really provides a predictable cost curve in the out years for that fuel and we believe that a proper gas mix in conjunction with renewables offers that opportunity for puerto rico. Our goal is to get that price at the meter below a certain point. That is going to act as an engine of growth. Would the jones act come into play for liquefied natural gas imports . It can be a real restriction. Mr. Zamot we believe that any measures that Congress Takes to ensure the cost of shipping fuels to puerto rico is reduced is a positive step towards rebuilding the economy. I would be willing to look at that and i think we should look at that. Maybe just a very narrow exception to the jones act, possibly. Just as we need to look at environmental regulation waivers. Everyone is not going to be happy, but if we want to see puerto rico succeed and thrive, i think those are the kinds of hard decisions we have to be willing to make. The last thing i want to ask about is that 800 million project. The Ranking Member referred to it, burning waste to create electricity. It is my understanding that that would be privately funding and would not meet government subsidies. Mr. Zamot that is correct. It is privately funded. Some of the capital structure includes federal loans. It relies on relatively new technology that is respectful of emissions. Thank you for your great answers. Other witnesses, if you want to weigh in, please do so in the last 45 seconds. The jones act of the vision of cost of the island. I think some changes have to be made. To the jones law and other laws. Mr. Chairman i yield back. Thank you. Understanding, this is dovetailing on the Ranking Members questions that the areaerator of the builtin that was previously contaminated by Battery Recycling land. It was flooded during the hurricanes. As the area been tested . I do not as specific details of what work has been accomplished to date. We do know the Company Planning that work has done mitigation prework. Do you mind sending some answers to this committee . Plan to the energy prevent the landfill being by the jurgens by future hurricanes . Visavis the question please repeat the question. When and how does the company plan to bury the toxic ash generated by the incinerator . Mr. Zamot that is being currently discussed with the current puerto rico administration. Mrs. Napolitano how many puerto rico municipalities refuse to send trash in the incinerator . Mr. Zamot the question to that is many because that represents a threat to current Waste Management in puerto rico which the e. P. A. Has identified as a critical need to address. Mrs. Napolitano how many hospitals in puerto rico has seen their power restored . How many hospitals have seen their power restored . Mr. Zamot in puerto rico, maam, i dont know the answer to that but thats not a lot right now. I think we still have several hospitals that are operating on generator power. Mrs. Napolitano the mayor mentioned the percentage is 75 to 80 without restored power. How much longer do you think its going to take . Mr. Zamot maam, we really dont have an answer to that question. If confirmed by the courts, i plan to work closely with the corps of engineers, with fema, and our assets on the ground. Mrs. Napolitano do you have an estimate . Mr. Zamot we dont have an estimate. Mrs. Napolitano and the question i have is the additional wave of people of people going to the states. Is the Oversight Board taking this into consideration . Ms. Jaresko yes, of course. One of the efforts in the fiscal Plan Development is to create an environment where people will be able to stay, receive the social support they need as families, whether thats a proper education, access to health care or Living Conditions. And so every effort is being made in the fiscal plan to ensure that the environment is such that people wish to stay at home and have the ability to stay at home as well as businesses staying to generate jobs. Mrs. Napolitano but so far they havent been because they dont have power. Ms. Jaresko well, that certainly is the absolute number one critical problem for both people and businesses today. Mrs. Napolitano then another question has to do with the documented deaths. What assistance has the federal government providing puerto rico mayors to provide a more accurate count . Of the deaths . Mayor otero for example, in guaynabo we dont have any deaths but the government is the one giving the numbers. Right now there were over 50 deaths. Not during the hurricane. After the hurricane now its over 50. Mrs. Napolitano but the mayors have been reporting them . Mayor otero yeah, yeah. The mayors have been reporting them. But through the hospitals and through forensic science. Mrs. Napolitano also, there are reports that residents have drank toxic water. Have Water Testing begun . Ms. Jaresko i apologize. Thats not information we have access to. Mrs. Napolitano why not . You are the mayors. Ms. Jaresko no. I am the head of the Oversight Board. Mrs. Napolitano but its important for us to know all these answers. Thank you, mr. Chair. Mr. Bishop mr. Wittman. And congratulations for being a voter. Mr. Wittman thank you, mr. Chairman. Id like to thank our witnesses for joining us today and please express to the people of puerto rico our thoughts and prayers. I know its a very challenging. We appreciate what youre doing here today to give us a perspective. Mr. Zamot, you laid out the framework on where you see things going with the restoration of power. There are two elements of that short term and long term. Give us a perspective because there are areas that are existing on generator power with intermittent fuel there, sometimes theyre up and down. Give us a perspective on your estimation there . And also the longer term. We know theres Capacity Generation and generation plants and electrical Distribution System. We know before it was antiquated. Give us your perspective why is the generation capacity . Is that relyable and up to speed now . Is it just a matter of modernizing and building the Distribution System . So if you can give me those two layers . Where are we giving that interim to get that distribution built . And where is the time frame where you think the Distribution System is and when they will be built and become functional . Mr. Zamot thank you, sir. Your first question. The corps of engineers and fema are doing the Damage Assessment right now. That will be accomplished we expect in the next two weeks. I can broadly tell you that the big issue right now is distribution took a massive hit on the island. We know transmission lines were affected. Some of the long haul transmission lines, three had significant damage. The real issue is on a very, very vast distribution network. So what were finding is the last mile problem is pretty significant. Actually getting folks power from community substations and the like. As far as your second question, what about generation . One of the issues we have in puerto rico is historically we had generation in the southwest but demand is predominantly in the northeast. We have a mismatch between where the generation is and where the population is. New Technology Allows us to actually do that in a better way while being respectful of the environment, noise. Those are solutions we are seeking with fema, the department of energy and private capital. Mr. Wittman in your estimation, how long do you think that will occur . Generation capacity, distribution capacity, in your best judgment . In your professional judgment, how long do you think that would be . And give us an idea of the phasing of that. And phasing of that. Obviously it will be built in phases. Generation and distribution. Mr. Zamot sir, it would be difficult for me to give you a date. I will tell you this. Its absolutely critical of incorporating nearterm recovery activities with a longterm plan. What we need to do is essentially start, not just bringing some of the distribution and wires up to code which would be an improvement in puerto rico but now start making the tradeoffs, the costbenefit analysis and tactical situations. Ill give you a quick example. The hurricane coming from the southeast has a big transmission line going to the north. It is possible that repairing that transmission line will actually be costlier than actually having generation built close to that town and the metro area and those are decisions we would seek. Mr. Wittman timeliness is key here to get that system back up in as quickly as we can. Obviously its food, water, shelter, electricity is part of the shelter element there so the timeliness of this is key. I think making sure theres an emphasis there and the urgency of what needs to happen with this and maybe like happens in the military realm, you can preposition some of that stuff. It seems to me you could buy supplies beforehand. Power poles are something we need. Wires. Can you prepurchase that and get to the island and when youre ready to go you dont have to wait for mobilization . Mr. Zamot thats a longterm fix. We need a better approach to repairing the island. Its not building and technology. Its also preparation to make sure we quickly recover from these types of events. Mr. Wittman mayor otero, having been in your shoes, i know thats where the rubber hits the road. Give me your perspective. What do we need to do here to help the citizens of puerto rico get back to the basic elements of food, water, shelter as quickly as we can . Mayor otero first of all, we have both problems. Generation. For example, in guaynaba, you have a lot of places ready but now we dont have generation. So if generation comes to the metropolitan area we will have 10 , 15 , 20 of our families in their places. As i told you, there is a cap in fema. Theres some laws that have to be amended for the health, for the families and they could go back to their homes. But if we keep on putting patches, we are going to be here next week as i told you or next year because we are in the caribbean. So we need to do permanent things over there in puerto rico. Mr. Wittman thank you. Mr. Bishop ms. Bordallo. Ms. Bordallo thank you very much, mr. Chairman. My questions are for you first. I want to thank you for your service as an air force officer. Many territories like puerto rico and guam given limited resources on the island are forced to make do with outdated infrastructure and legacy systems including substandard electric grids, transmission lines and power plants. Mr. Zamot, can you speak to the challenges this presents . Where are you today that you werent right directly after the hurricane . Are you, say, 5 better, 10 in better . Mr. Zamot maam, it would be very difficult to answer that question. I think there is incremental improvement as far as understanding the magnitude of the damage. Ill give you an example. Initial reports were that the transmission sector of the grid actually took greater damage distribution. We are now, based on the very hard work of fema and corps of engineers, the distribution side, especially the last mile, was really where the ms. Bordallo so power is the top essential. Another question i have. This has to do with rebuilding better and hardening our infrastructure for natural resources. I think my colleagues have mentioned that. All u. S. Territories are prone a to hurricanes, typhoons and cyclones. Guam is certainly no stranger. We have going through typhoons at 200 miles per hour. Now, when rebuilding after Natural Disasters, we must always seek to rebuild better. Thats what happened on guam. We dont have people now in shelters after typhoons. We call typhoons a blessing because we build better. No longer in wood and tin roof but we build in concrete. So can you give me some idea . Is fema giving funds to rebuild as was or are they are you going to be able to seek funds to build better so you can have concrete structures . Mr. Zamot maam, the second case. So we have a situation where were rebuilding to code under category b of the stafford act. We are working closely with fema, the department of energy and other agencies to make sure we can use a variety of public assistance grants to actually build resiliency into the system when we build it better. So it is clear thats going to be a mix of federal and private funding at some point. We are working on a Transformation Plan to do exactly that right now. We have a meeting with our team this week and we hope to have the initial Transformation Plan by middle of december. And ms. Bordallo and this is not just for san juan but for other outlying districts . Mr. Zamot yes, maam. Its actually a wholesale reimagining, if you will, of the grid. Number of best practices we have from industry tied in with the Puerto Rico Energy strategy which has already been developed. At least as of two weeks ago with the governor sent as his priorities for rebuilding. Ms. Bordallo thank you. Im glad to hear that. Can you give me an estimate how many people have left puerto rico and are now living in new york or some other states me mainland . Ms. Jaresko yes. Up to 100,000 at this point. Ms. Bordallo 100,000. I want to close i strongly support efforts to secure additional federal resources for both puerto rico and the Virgin Islands. As they rebuild from recent hurricanes. I know. Ive been through many of them. And i also hope that i want to say that the residents of puerto rico and the Virgin Islands are american citizens. I think this is one point we forget about. And they deserve nothing less than our full support in this committee and in the full congress. So i yield back, mr. Chairman. Mr. Bishop thank you. Mr. Mcclintock. Mr. Mcclintock thank you, mr. Chairman. All of us have been appalled by the devastation in puerto rico. Stories have been heart rending. In your resident commissioner has kept us focused on that these past few weeks. And we do recognize a very important responsibility to respond to the cost of the Natural Disaster. Thats our social compact as a federal union. But in dealing with the Natural Disaster, we are also confronting the fact there was a preexisting fiscal condition of the commonwealth that was not due to acts of god but rather acts of government. A lot of very, very bad decisions by the elected government officials of puerto rico and also perhaps a lot of bad decisions made by the federal government over the years. The jones act was just mentioned as one example. The federal governments responsible for the acts of god and the acts of the federal government, but its not responsible for the acts of the puerto rico government. Can you offer us some guidance on how we separate these two responsibilities . Ms. Jaresko yes, sir. When we were charged initially with implementing promesa, we adopted a fiscal plan for 10 years that brought the commonwealth back to structural balance without any additional federal funning. That required on the part of puerto rico extraordinary measures. It required a right sizing of the government by 30 , cutting 30 of costs. It required over 10 years reducing Health Care Costs by 30 . And we were on that path prior to this devastation. So i think if we look at the original fiscal plan, for example, the budget of this year that implemented that fiscal plan, you have that baseline. What it looked like and what it could have been prior to the is hurricane. Unfortunately, this devastation makes some of those measures today impossible, and it creates a situation where the uncertainty makes it hard for us to determine exactly what type of measures we need to get back to that structural balance and thats why we asked you and youve graciously given us a shortterm window. And given the population outflow and given the fact that businesses, some are continue to be close because of lack of electricity. Others had their workers leave. Some are waiting for a tax solution and mr. Mcclintock i understand the liquidity concerns. Again, we have to recognize part of those were preexisting and the result of bad decisions by the puerto rican government. During the hearings on promesa, i understand is 100,000 fled the island since the disaster but the fact many were fleeing from it before. During the hearings on promesa i pointed out that puerto rico is the cruise ship destination. It should be the gem of the caribbean. People should be flocking to it, not fleeing from it. Again, not acts of god but acts of government. What can the federal government do long term in terms of the overall policies . The jones act have been mentioned. Federal changes that could restore the prosperity that puerto rico should naturally enjoy . Ms. Jaresko first, it would be the response of the devastation. I think the extent to which you help rebuild the Public Sector and fema and h. U. D. And other agencies are there indeed. Regard reform, you lead to design something that encourages u. S. Companies to stay and even grow their manufacturing operations in puerto rico. Puerto rico should not be penalized. Mr. Mcclintock my time is fleeting. I very much want to get the full answer to the question, not only from you but from our other witnesses. Could i ask you respond to that in writing . Give us your suggestions on what the federal government can be doing to restore the natural prosperity that the island should enjoy. The final question is to mr. Zamot. You mentioned Electricity Generation and heavy reliance on renewables. I imagine that means solar and wind. My experience has been those are the most expensive forms of Electricity Generation in part because of the relatively low output but also the intermittent nature that requires Ready Reserve power to back up. Why in a combined power and economic crisis would you insist on the most expensive and least productive electricity sources . Mr. Bishop you have four seconds to do it. Mr. Mcclintock could i get that answer in writing . Mr. Bishop yes. Mr. Costa. Mr. Costa i think the witnesses get a sense there is a lot of concern about not only the devastation, the lives that have been lost in puerto rico but also the response from the federal government which i for one feel has been lacking in terms of the coordination. We all know that Natural Disasters are devastating to the communities that they impact. Whether they are the hurricanes in the caribbean or tornadoes or earthquakes or fires that we had in california. The response though on behalf of the federal government, where we have a responsibility i think should always be the same which is we should do the best on behalf of american citizens and i think thats why this oversight hearing today and future efforts are critical because members of Congress Need to understand that we in fact are doing our best. If were not doing our best, then what its going to take in fact to provide that support necessary. On behalf of people of puerto rico and the u. S. Virgin islands. I spent a bit of time in that part of the world and those islands are beautiful. The people have always been the fabric of this country. My thoughts and prayers are with those families. Mayor, i want to ask you, as a disaster and youre not i think unfamiliar with these hurricanes occur regularly in the caribbean, what has made this so different than previous examples that you may be familiar with in puerto rico . Mayor otero well, the thing is before hugo, george, there are some parts of the island, the communications, they were good. Partially good. And some places on the island were working without a problem. Right now we have the 78 municipalities devastated. Mr. Costa it took out the whole island. So the puerto rico has been unable to provide the response it had in previous disasters . Mayor otero because of that. Mr. Costa same as local government. You have been limited. Mayor otero yeah. I used to be mr. Costa what would you ask to do in the short term and long term . Realize we do triage in the short term. In the long term we have to be smart about our ability to get puerto rico back on their feet along with the u. S. Virgin islands. Mayor otero in the longer term, we have to work with our infrastructure. And as said before, if we rebuild in concrete, we wont have this problem. If we just do the same thing, we are going to be here next week, maybe next year. So we have the solution. We have to work with it. Mr. Costa mr. Zamot, as the revitalization coordinator, i can understand where some of the questions youve t have at you won hand. Given the responsibility that you are going to have, you begin to develop an interim and longterm plan. And how you implement those longterm plans. Mr. Zamot we want to make sure we have clarity of purpose between the agencies that are responsible for immediate mr. Costa you are working on that now. Have you developed a price tag in terms of what you think its going to cost . At the end of the day, to the mayors point, if we are going to do some sound investments, we have to be clear about how much money its going to cost and do you have the resources . Mr. Zamot we are looking at that right now working with the corps of engineers and fema and the department of energy to get a proper roundup estimate of mr. Costa and how long do you think thats going to take . Mr. Zamot my understanding is at least two more weeks. Mr. Costa all right. Will you be able to provide this committee in two more weeks or in a month what you think the costs are going to be in the interim and the long term to do the kind of things the mayor is suggesting we need to be doing if we are going to get puerto rico and the u. S. Virgins back on their feet . Mr. Zamot we should be able to do that, sir. Mr. Costa i think its important for members of this committee to understand because there will be a supplemental and we have to figure out as we deal with the situation in texas and louisiana that we do the same for the people in puerto rico and the u. S. Virgins. Mr. Zamot yes, sir. Mr. Bishop Virgin Islands. Mr. Costa u. S. Virgin islands. Yes. Those who us sail in the u. S. Virgin islands refer to it as a pretty part of the world. Mr. Bishop i am not touching that line. Mr. Pearce. [laughter] mr. Pearce thank you, mr. Chairman. Thanks to each one of you for being here and i think each member of the committee has expressed their concerns for the situation and our united desire to help restore power and just restore the conditions that are basic to human life. Mr. Zamot, i think you ran out. Overtime to call an can answer so you toms question. Mr. Zamot its about mr. Pearce can you raise your microphone up just a bit. Mr. Zamot can you hear me now . The question if i remember is integrate renewables and why are we integrating renewables . Thats puerto ricos own developed Energy Strategy. They developed this for 2040 that renewable is gas mix. Renewables frankly is a big private investment effort so these are actually vendors from private industry who bring their own capital to the table and can actually provide power at competitive rates to the grid. And the issue is how do you integrate that and be a resilient mix what we see and the government sees as predominantly gas for the remainder. Mr. Pearce are those private funds, do they receive some sort of tax credit or anything . Mr. Zamot sir, i would imagine that some of them may but i dont have any specific detail on that. Mr. Pearce i am talking from the puerto rican government . Mr. Zamot i do not have that information, sir. Mr. Pearce so the utility is the absolute important thing to get restored. In other words if you are going to pump water, it takes an hour, electrical power, just every basic resource now. Now, understand that the Power Company had filed bankruptcy prior to the storms. Whats the status of the kind of the underlying economic state of the company or the agency . Ms. Jaresko 9 billion of bonded debt prior to the hurricane devastation. That debt was why we ended up filing title 3. The fiscal plan process that i described that we will follow for the commonwealth, we will do the same for prepa and we will have a sense what that looks like Going Forward by middle of december. I cant say right now what their Financial Capacity will be. Mr. Pearce prior to the hurricane they were not paying their obligations. They had filed for bankruptcy, is that correct . Ms. Jaresko yes, sir. Mr. Pearce one of the problems i see, just as a former Business Owner taking a look at it, one of the reasons residents had to pay such a high rate is certain entities didnt have to pay for the electrical power. One of those would be the hotels. So are they still exempt from paying their power . Ms. Jaresko each of the Economic Development plans that puerto rico implemented over the years had individual tax agreements. Mr. Pearce i am just asking about the hotels, are they still exempt or not exempt . Ms. Jaresko some, yes. Mr. Pearce now, also cities were also exempt. City governments were exempt prior, according to what i read . Mr. Zamot thats correct, sir. Mr. Pearce mr. Otero, is your community paying for electrical power . Is that something you have an exemption for . Mayor otero we have an exemption but we have they dont pay us or taxes and rything mr. Pearce i understand. The exemption ends up lying on the backs of the consumer. Mayor otero they dont pay us. We dont pay them. Mr. Pearce so, again, looking at it from this end, we will do what we have to do to help you out but at some point the system has to work inside itself. Ms. Jaresko, how much if you could tell us the checks would be today what that would be . Mr. Zamot . Ms. Jaresko i cant tell you. I myself am waiting for the floor assessment from fema so i cant give you an assessment. Mr. Pearce so one of the problems that is being faced by the Utility Company is evacuation of experienced personnel. They were retiring and moving on. And were not able to hire experienced people. So whats the status of the Human Capital . Have you got the resources internally to fix and run the system if we get it back operational . Mr. Zamot sir, we need all hands on deck to actually recover the system. Mr. Pearce but my question is, are you finding the experienced people to hire inside the system . Mr. Zamot we will need additional people, experienced people to actually do the work. Mr. Pearce i would interpret that as kind of a hesitant no that you are not anyway just significant problems, again. My heart goes out to you. I yield back, mr. Chairman. Mr. Bishop mr. Sablan. Mr. Sablan thank you, mr. Chairman, for having this hearing. Two things. My district is known as typhoon alley. I represent an island thats about 400 miles in distance from the northern most part to the southernmost part. Thats like from san diego to san jose, california, almost. And im very interested in the gentleman from california, mr. Mcclintock, on what the federal mcclintock on what the federal government can do to help puerto rico and the rest of the territories to pick themselves up and move on is one of the things we need to do is look at medicaid. But having said that, because this is examining, challenging the role of financial oversights, my heart goes out to the people of puerto rico and the destruction. Ive seen typhoons like that. Id like to yield my time to the daughter of puerto rico, ms. Velazquez of new york. Ms. Velazquez thank you so much, mr. Sablan. Let me take this opportunity, mr. Chairman, and the Ranking Member, to thank you for giving us the courtesy to participate in this important hearing. Ms. Jaresko, former senator nieves testified before the house energy and commerce committee, in his insightful remarks he said, quote, as most Puerto Ricans sadly understood after Hurricane Maria, the lack of a strong, Resilient Energy system has the potential of killing people and destroying the economy. And we know that is real. So, to that point, i want to highlight some key troublesome statistics. 35 of Small Businesses in puerto rico have still not resumed operations due to power outages. 10 of puerto ricos Small Businesses are expected to close their doors entirely. 100,000 people have left the island since september 20. My question is, how are you going to continue funding the island as more and more businesses close and people continue to leave . Ms. Jaresko initially it will require liquidity support under the Community Disaster loan program. Over time we will have to determine how many of those people who have left have left for good. How many will be returning. We will have to determine and estimate how many of those businesses have closed can reopen or new businesses reopen with the support of s. B. A. , for example. The work we have is try to rebuild an economy that can be balanced. That is the charge. Ms. Velazquez the same goes to the question of bank bondholders. How do you see them getting repaid . Ms. Jaresko i dont have how much or what period of time. That will be defined by a longer debt sustainability analysis that we need to complete looking at 30 years. Itself. He fiscal plan ms. Velazquez what are you saying, 30 years . Ms. Jaresko we have to do a 30year sustainability analysis before the end of december with the government. Ms. Velazquez and the way things stand today, it may take over 50 years for the bondholders to expect to be repaid because there wont be a tax base left in puerto rico . Ms. Jaresko as you know prior to the hurricane it appeared impossible and thats why we were in title 3 to repay the creditors. Today the situation is gravely worse. Ms. Velazquez thank you. Mr. Zamot, you have expressed in the past your preference to privatize the electric power authority. While i understand that it is in the best interest of consumers and businesses alike to depoliticize the public corporation, i am not fully convinced that the only way to do so is by selling off the grid to the highest bidder. Can you explain the boards vision for puerto ricos Energy Future . Mr. Zamot yes, maam. What we are trying to do is the board is trying to consider all options to the future of puerto ricos grid. Privatization may be one of those, but capitalization is a large part of doing this so the federal government doesnt have to rely on footing the bill. Ms. Velazquez and in that Energy Future, do you foresee Renewable Energy playing an Important Role . Mr. Zamot yes, maam. In accordance to puerto ricos own Energy Strategy its a large part. Velazquez thank you. I yield back. Mr. Bishop mr. Thompson. Mr. Thompson mr. Chairman, thank you. Thank you to the panel. Really appreciate you talking about the important issues that impact all those american citizens in the short term and long term. Ms. Jaresko, the use of microgrids will allow the island to build back a stronger electrical system so there will be fewer points of failure if another hurricane would hit. Today in puerto rico, most of the generation is on the south side of the island and the load is on the north of the island and with two sides connected by transmission lines. Locating generation closer would alleviate some of the vulnerability in the transmission lines opposed to the current system. What do we need to do to ensure at the very least were Building BackCritical Infrastructure like hospitals, ports, emergency shelters with more Resilient Technologies like microgrids . Ms. Jaresko ill yield to mr. Zamot sir, we are working right now with fema, department of energy and other agencies to examine exactly that question what are the best solutions, best practices out there so we can actually build in resiliency and actually leverage some federal programs that allow us to do just that so we dont incur this tremendous cost the next time another hurricane heads to puerto rico . Mr. Thompson mayor, in the wake of these devastating hurricanes, congress surely interested in working with you and with other officials on the ground to provide relief, again, short term, looking long term in terms of sustainability to puerto rico. My office, specifically, worked with constituents who have family in puerto rico to convey what congress, fema and the National Guard are doing to provide relief to those that are hit the hardest. Moving forward, what can we do to ensure that relief efforts are being used in the most efficient and impactful methods . Mayor otero you have 78 mayors. And we are the First Responders. If you give us more participation and decisionmaking, we are the first face the people sees and the First Responders for the emergency. So all we ask is for that, for us to be there and to receive the help because everything that comes through fema, through the corps of engineers go through the municipalities, from us to the people. So you have 78 mayors that are willing to help fema, to help congress, to help the administration to do their job. Mr. Thompson thank you. Through your experiences, revitalization coordinator, you mentioned the successes of privately funded improvement projects. You mentioned your ability to provide broader Economic Development is limited. How can Congress Expand your abilities and help you provide stable, reliable and costeffective power to the people of puerto rico . Mr. Zamot sir, i think i would defer to any specific statutory language to the committee. But greater clarity on what the authorities of the revitalization coordinator and broadly promesa and the board would actually be very welcomed. Mr. Thompson just one question for you. Certainly the devastating effects of Hurricane Maria have left thousands to access to thousands without access to power and water. The equipment is on the average 44 years old and based on technology thats even older, maria gives us the opportunity to bring puerto ricos infrastructure into the 21st century. How can Innovative Energy technology such as fuel cells that utilize our nations resources, clean burning natural gas be used to revitalize the Puerto Rico Energy grid . Mr. Zamot sir, we would be excited to bring all those solutions to the table and incorporate any of those good ideas, those fantastic ideas into our Transformation Plan. We are working very closely with the government of puerto rico. With prepa. Who actually has provided a lot of technical insight into this Transformation Plan. Our focus is on achieving the goals puerto rico has set for itself in their Energy Strategy and that type of new technology is clearly a part of the future. Mr. Thompson thank you, mr. Chairman. I yield back. Mr. Bishop thank you. Ms. Tsongas. Ms. Tsongas thank you, mr. Chairman. Thank you to our witnesses. I think its important to remember we are having this hearing today because it has been 47 days since landfall of Hurricane Maria and yet our fellow americans in puerto rico are still enduring a humanitarian crisis. The electricity blackout is now the worst in our nations history. Many still do not have Safe Drinking Water and constituents tell my office that communication is extremely limited. Some people are still having difficulty contacting family members in remote parts of the island. I have to say that in my district about a week and a half ago, we had a serious storm which left many of our constituents without electricity for a day or two and so many said i cant stand it after a day or two. What on earth is it like in puerto rico, especially if you compound that the access to Safe Drinking Water . One in five of my constituents identify as hispanic or latino and 40 of them are from puerto rico. So their interest in the health, safety and longterm Economic Prosperity of the island is acute. And that is shared by many of my constituents who watch with dismay as our federal government has taken so long to respond. And to address that, since the hurricane struck, ive seen a tremendous response to help our fellow citizens. Volunteers in the city of lawrence organized a major donation drive for clothing, bottled water, toiletries and other necessary supplies to be shipped to puerto rico. They just wanted to do whatever they could to help. A Bipartisan Group of elected leaders created the massachusetts united for puerto rico fund, which is collecting donations and distributing money to relief organizations working directly on the island. And so far they raised over 2 million from over 1,500 individuals. And the private sector has responded to the crisis as well. For example, a Solar Company in my district donated an offgrid Solar Power System and batteries to a Family Medical Clinic that has been without electricity or clean water. All wonderful actions but really designed to try to offset our slow the government, the federal governments slow response. And i received a letter from the massachusetts black and latino legislative caucus urging congress to support increased relief efforts for puerto rico. And so with your permission, mr. Chairman, i ask that this letter be entered into the hearing record. With that, ms. Jaresko, in your written testimony you said, you go so far to state, quote, without unprecedented levels of help from the United States government, the recovery we were planning for will fail, unquote. And you have said in your testimony this morning just what is at stake and how important it is we respond in a way that help moves puerto rico forward. Can you give me a sense, a realistic sense of the support you would need from the United States government to help puerto rico recover in a way that does put it in a better place Going Forward, not to just take care of the near term of tragedy and crisis but help position it for the future . Ms. Jaresko are you asking with regard to what the board requires or puerto rico . Ms. Tsongas i would say the board would assess it. Ms. Jaresko 100 billion in damages. Some will be covered by insurance funds and some is private sector. The Public Sector needs to be rebuilt. The key is electricity. Thats why the board has made the appointment of mr. Zamot as a chief officer a priority. The other things will above and beyond that, the board believes they have the authority to continue to implement those fiscal controls that are required to bring back structural balance. But to the extent that the congress can provide clarity, we believe we could avoid much lengthy Legal Litigation and costly litigation when there are differences of opinion with regard to our authority. We think that will help ensure a quicker and more efficient recovery as things move forward. So that is one. The second is on liquidity assistance. The congress has approved a short term. We are looking forward in the supplemental to longterm support for liquidity. Long term meaning more than the next year, as we described the reasons for the revenues collapsing and our expenditures remaining relatively speaking staying the same. Third, i would add, i believe the board has an Important Role in the longterm funding that congress will appropriate it to make sure it aligns with the priorities Going Forward. Mr. Bishop mr. Gohmert. Mr. Gohmert ms. Jaresko, if i understood you correctly, you said returning puerto rico to normal depended on quick and efficient return of electricity. But isnt it too late for it to have been considered quick and efficient . I mean, were still hearing its not i would have thought we were way past the quick part of returning electricity. Do you still have hope its going to be quick . Ms. Jaresko as quick as is possible. I myself have no electricity where i live. 12 hours generator for in the evening. My point is the longer it will last mr. Gohmert how long have you been without electricity . Ms. Jaresko day one. We are a little past 50. Mr. Gohmert so i would just suggest perhaps if your idea of quick is somewhere beyond that, that ought to be readdressed. I understand that the governor has been resistant to the idea of privatizing the puerto rican electric power authority. But when i look how long its taking to return power, i mean, it kind of looks like prepa is puerto ricos it is to electricity is what the v. A. Is to quick and Efficient Health care for veterans. Its just not i mean, i cant imagine it being worse if it were privatized. What are your feelings about privatization . Id like to hear from you, ms. Jaresko and then mr. Zamot. Ms. Jaresko we consider it one of the options Going Forward. There is a question to see whether its privatization of the entire power sector meaning generation, transition or distribution or bringing in private sector to compete and bring down the cost and bring up efficiency of electricity. We are looking at all of those as we define this fiscal plan for prepa. Mr. Gohmert i said in the past and still believe, i mean, puerto rico has the potential of being the hong kong of the United States where businesses would flood in there, but even though puerto rico pays no federal income tax, obviously the local taxes are even higher than federal income tax. But so its just been quite an anomaly. You got great people. Hardworking people. And one of the most beautiful places in the world. And yet the people are desperate for help. Can you put your finger on specifically what you think would return electricity the quickest . Is all your faith in a small repair company from montana . Mr. Zamot sir, rebuilding the grid will take coordination of effort and clarity of purpose and a unified management and leadership structure. We currently do not have that and that is why the board has asked to name a chief transformation officer. Mr. Gohmert how far away has it been mr. Zamot i have been named but awaiting from the court. Mr. Gohmert are you waiting for the formal authority . Mr. Zamot i am waiting for the court. Mr. Gohmert do you know how happen . Ore that will because it seems if its that important to getting power restored more quickly, that it shouldnt take that long to have a meeting, grill you if they have to all day and then come to a decision. How long are you looking at before you get that authority, if you get it . Mr. Zamot sir, i do not know. I know immediately upon approval i am ready to work immediately towards marshaling all those efforts. Mr. Gohmert i understand that. The question is when will you get that opportunity . Ms. Jaresko the Court Hearing is the 13th. The judge may or may not decide that day she may postpone. There could be appeals based on whatever the decision is. Thats why in our testimony we said if congress mr. Gohmert is that totally up to the judge to set that date . Ms. Jaresko she has set the date of the 13th. Its up to her to decide. Mr. Gohmert no one has any authority to move things on quickly . Ms. Jaresko no. We agree if you believe the power that promesa has under title 3 we would welcome clarification and ratification of mr. Gohmert is her caseload that overwhelming she cant possibly get it before the 13th ms. Jaresko i cant answer that question, sir. Mr. Bishop mr. Lowenthal. Mr. Gohmert pitiful. Mr. Lowenthal thank you, mr. Chair. Thank you for all the witnesses being here and helping us to better understand how to accelerate the ongoing recovery of puerto rico. You know, one of the things that really stands out is how sad this is for the residents of puerto rico, how things in terms of their perspective have moved slowly. All the 70 of people that are still without electricity and how the restoration is going to take a long time. And how much of the population lacks clean Drinking Water. And hospitals still dont have power. Its quite a picture you lay out for us. Some of the things that really have struck me is two of my colleagues have raised the issue that, well, maybe some of the problems what we need to do is have exemptions or really get rid of the jones act. Im not sure i believe any of that. That the jones act is really a problem. Id like to know, before the hurricanes, maria and the other hurricane, was there any concern about the jones act before this . Ms. Jaresko yes, there was. It was as well in the Congressional Task force report. There have been studies on it. It does add a level of cost to the island which we could do without the additional cost. I cant say at the moment that the hurricane struck this was a critical issue because the ports were limited in how much capacity they could intake. Mr. Lowenthal thats what we heard. The real issue was not so much the jones act but the issue was getting goods from the ports out because there was not a Transportation System or infrastructure that could handle it. And there was really isolation of getting from the ports to the communities. Can you comment on that . Ms. Jaresko what i can comment on is i have never seen when i lived in ukraine during war, during revolutions, i never seen a situation with more complete total breakdown of all communications and the structure of the business environment. You couldnt function. There were three days where i could not make a phone call to let anyone know we were safe. The roads were blocked and flooded. There was no communication or internet. That was right near san juan where i lived. I cant imagine other areas that were directly hit on the incoming. This is a situation that i think no one could have prepared for and it raises just extraordinary questions how to deal with an island that completely collapsed. Communications, electricity, water, completely collapsed. People could not communicate. Even to bring bus drivers, Truck Drivers to the ports to help bring the product out of the ports. So it is incredibly difficult situation. Mr. Lowenthal thank you. Mr. Zamot, i want to change the topic a little bit and talk about the trash incinerator project. Could you tell us right now prior to the hurricanes, was there any issues in puerto rico about a coal ash problem and what to do with the coal ash and where it was being stored . Mr. Zamot sir, thats an issue that government of puerto rico is currently addressing and the board was not involved. Mr. Lowenthal so you do not know whether there any problems with coal ash . Does anyone know has there been any problem with coal ash . They were able to utilize the existing kind of landfills toget rid of some of this toxic coal ash . Ms. Jaresko i am aware of the problem. I am aware also of the environmental protesters and the issued they raised. Mr. Lowenthal so there was a problem before all this about coal ash. So you understand that. So now we will increase the toxic coal ash. Where is it going to go . If there were not landfills before to deal with the coal ash, how by increasing that problem, how do we deal with it . How do we solve it . Mr. Zamot particular vendor proposed this project has been coordinating with the government of puerto rico for a number of years now. Its their assessment and the government of puerto rico actually agreed in some written documentation this was actually decreasing some of the outcome of some of this Waste Management and therefore the government of puerto rico had actually given their support to this effort if they met some of the required federal permitting guidelines which it is our understanding they did. Mr. Lowenthal well, im not quite sure. It seems like you are trying to solve problem about trash to energy or creating another problem, huge problem in terms of how to get rid of the toxic coal ash that already existed on the island. With that ill yield back, but i am not sure this is a resolution or rather it may solve one problem but it may create other problems. Mr. Bishop thank you. Mr. Labrador. Mr. Labrador thank you, mr. Chairman. Thank you all for being here. I appreciate it. Having been born and raised in puerto rico, this has been something thats devastated my family, has devastated the people that i love and i thank you for your efforts. You know, theres an effort by some of my friends on the other side to say that the federal governments response has been inadequate. Would you say that the federal governments response has been inadequate . Ms. Jaresko i think everyone would agree they wished that things were better today in puerto rico and faster. But i dont think i am a judge as to what could have been done differently. Mr. Labrador correct. We all wish things would be better. I think you said in your testimony there was a complete breakdown of Communications Like we have never seen before. No one could have prepared for this. Thats different than saying that the response was inadequate. In fact, colonel michael valle, an air force officer who was born and raised in puerto rico and been in charge of some of the efforts in puerto rico, he said any claim that the response is inadequate is just not true. In fact, he told the Huffington Post, i want to make sure this was not a conservative publication, he told the Huffington Post as a puerto rican the problem has nothing to do with the military, d. O. D. Puerto is getting to rico. The problem is distribution. Its one of the problems we had from the beginning. That there was a complete breakdown of the things that were happening in puerto rico that no one could have foreseen. You wanted to respond. Ms. Jaresko i want to add, some is Standard Operating Procedures. If you take your Standard Operating Procedures from a land mass like the mainland and you put them on the island where communications failed it doesnt always work. I dont think my job is to assign blame but do what we can all do together to make this recovery faster. Mr. Labrador how do you view the Oversight Boards role in the Recovery Efforts . Ms. Jaresko i believe the Oversight Boards efforts is important. It can make it more speedy, create confidence for those funding that recovery effort. Number one, integrating it with the fiscal plans. Number two, integrating it in the title 3 cases. Number three, providing the oversight role that promesa gave us both with contracting and other areas. Mr. Labrador i am trying to read between the lines in your testimony. I am hearing for more calls for tools for authority and i need you to be specific. I need you to be straight with us. You have a very Important Role. You stated that prior to the hurricane, the board had the authority to execute its mission and deliver on the underlying mandate that government set with promesa but with the devastation you allude those tools may be inadequate. So please tell us what is the rd currently does the board currently have the tools necessary to facilitate efficient and effective recovery . Ms. Jaresko i will try to be clear. I believe the board has the tools and promesa gives us the tools. That said, when there are disagreements, the use of those tools ends up in costly and time consuming litigation. Today more than ever that time and that cost is not helping puerto rico. So we ask for clarity of the tools that we have. Whether it is in the appointment of a c. T. O. Through title 3, whether it is the implementation of our contract policy review or whether or not it is the implementation of the fiscal plans in full when certified. Mr. Labrador so what else do you need to be successful . Ms. Jaresko i think we would appreciate a legislative affirmation of those and or conditioning of appropriations on those powers as you see fit. What are your immediate shortterm goals for prepa . My immediate shortterm goals are to reach out to all of available resources and integrate those in a coherent manner. We need a better strategy to prioritize the regions and sectors and clusters that we need to revitalize to repower, to grow, and give a electric power to the people. We need to ensure that we are open in reaching out to the agencies to bring in broad support, not just targeted support. You have longterm goals for prepa . Greg be strategy is in accordance. It is 50 renewables, 50 gas. Regional grids, resiliency. I am sorry i did not ask any questions but mayor otero, thank you for what you are doing for the island and the puerto rican people. Thank you, mr. Chairman. I also want to thank you for the opportunity to travel to puerto rico. It was an eyeopening experience to hear not just from your elected commissioner and be briefed on what is happening, but to see for myself. I am extremely disappointed at how much we have, as a federal government, i think, neglected just a basic infrastructure oversight within the territory of puerto rico. The amount of rebuilding that will be necessary to restore puerto rico is staggering. My visit reinforced my concerns that we may be rebuilding to an outdated standard that will not sustain a storm to the strength of Hurricane Maria, category 5. It is my understanding that puerto rico has not updated Building Code standard since 2011, when they adapted 2009 standards according to the cocounsel. A lot of the buildings were built long before these things can into implementation and were grandfathered in. We expect to happen when they are hit with a category five . The Scientific Community agrees that storms like maria are likely to become more common. This is the new normal for puerto rico and the Virgin Islands. For puerto ricos economy to recover and grow, congress will need to step up and assist the island much more than it has in the past. If puerto rico were a state, it would rank last among all states in support from the federal government in competitive federal grants, last in health care spending, and funding. I worked in the city of los angeles. One of the basic responsibilities as a mayor is to practice an emergency plan. Department,lice department, city hall, lawyers, fema grants, everyone coordinated. We quite a needed with ourselves, the state, southern and northern regions. You did not have a chance because cell phone towers were down, so fema provided you with a Satellite Phone. Mayor otero they didnt work. Ok. Today i am finding out the Satellite Phone you are provided did not work. Mr. Bishop, i think we need to have a real conversation and take people to task. Maybe a televised Public Meeting is not the proper place, because we dont want to be accused of politicizing the problems in puerto rico. The bottom line is that leadership is not there. When fema arrived, they had no one to coordinate with, not from the Governors Office, not from the regional offices, but they have to build an infrastructure. Now we have a threestar general, buchanan, there. I looked at the maps. We drove with him for several hours in the back of a van. I saw the maps. All of the roads had been cleared. The problem is every day that it rains, there are landslides in the hills. The next day after a good storm, you have to go back and clear the same roads. They are having to redo things they have done over and over and over again. Who ordered the light poles that you need in order to bring back the infrastructure, and when was that ordered . Did texas get ahead . Did florida get ahead . Did the Virgin Islands got ahead of puerto rico . It seems like you have been last in line every step of the way. What do we expect from having you appointed to this position, mr. Zamot . And you have 20 seconds to answer. [laughter] thanks. How will it be different from what we had before . Mr. Zamot i will need more to answer that question, respectfully. Maybe we can do it in writing. Actually, i appreciate the questions, because we need to realize that we have another round of hearings with the Governors Office coming in next week. Some of those should be directed to them. I do appreciate the fact that what the board is doing has some specifics, especially on oversight, and maybe even contract issues, and the contract oversight we have not talked about before, but you hit on one of the basic points. That is why i wish there had been a couple more witnesses that wouldve been here today. Mr. Tipton. Thank you chairman, i would concur. We need to have conversations in terms of the late shift on the ground and in terms of preplanning. It is not a new issue to come to puerto rico or the Virgin Islands. I would like to start with miss jaresko first. You talked about the timing, when the disaster expenses are incurred, and when fema reimburses. You talked about femas direct payments, which was not considered in the original estimate. I would like to get more clarity on that issue. How are the reimbursements working now . Ms. Jaresko at this time, for the short term, we were pleasantly surprised by the fact that fema was advancing funds. The last number i heard was over 350 million to the commonwealth, prepa, so that was part of it. The second part of the change in liquidity estimates had to do it with the fact that fema was directly contracting with the army corps of engineers, which did not run through the liquidity treasury single account of the commonwealth. Those digits in the short term were important and explains why the cash on hand in the commonwealth is higher than what was forecast it in the beginning. Going forward, i would expect it to be a local share that remains 10 unless you deem it possible to waive that local share, and a necessity for the commonwealth to front the money and reimbursements be made later. Just in terms of some of the accountability, not transfers from fema to the corps of engineers, but to the commonwealth, are there protocols to make sure the resources are going where they need to be going . Ms. Jaresko i believe the power of the board will ensure that contracts are ensuring market promotion as written in the law as well as compliant with the fiscal plans. The key element is that contracts have to be compliant with federal regulations and be properly reimbursed to not have a major adverse effect on the commonwealth, and that is where the policy review will help. Rep. Tipton and that is what you spoke to with random sampling below the levels . Ms. Jaresko correct. Rep. Tipton are there other steps you need to take to make sure that the board can estimate accurately the cash the territory will need to avoid a liquidity crisis . Ms. Jaresko i think having as much knowledge as possible about the intention of congress and the federal government in terms of longer term liquidity funding that we can apply in the fiscal plans, and then measure against it as well as the longer term supplemental for emergency assistance. Measurenot be able to against it if we dont know what we are getting, so the knowledge is important for us. Rep. Tipton one final question. You wrote that the board has proposed legislative language. Why does the board think that certifying these requests is important . Ms. Jaresko it gives confidence to everyone that in fact the liquidity you are funding with taxpayer dollars as a result of hurricane disaster, and not as a result of not implementing other economic policies are fiscal reforms that need to be implemented in any case. I think it provides a baseline and guideline if the board is certifying those requests. Rep. Tipton thank you. Mr. Zamot, the whole set of in terms of the electrical grid is obviously very important to the people of puerto rico, but im also curious from the point of view of those of us who have a different set up where the government effectively owns it. Listening to the mayor, they dont charge, they dont pay kind of a unique structure. Are there any legislative, regulatory regulations to seek private Sector Solutions to expedite this and be able to actually get something that will be sustainable . Mr. Zamot the fiscal plan that prepa is currently in in title iii, and we are developing a fiscal plan for, will address a lot of those regulatory options, and also addresses attracting private capital for a number of potential solutions to the challenges. We see the Transformation Plan is not just being the wires and asset base, but also the structure of the organization, anything from management, governance, economic impact, and beyond. Thank you. Thank you, thank you for being here. I have visited a couple of times for a wedding, and its a lovely city. I am a veteran and marine and a member of the Armed Services committee. Fema is often supported by military efforts. With that in mind, i would like to highlight some of the differences that occurred between the u. S. Response to the Haiti Earthquake, not part of the u. S. , in 2010, and the puerto rico response following Hurricane Maria this year. In haiti, there was overnight military unit deployment. After hurricane rina were you, it was five days before federal officials arrived. In haiti, 8,000 troops were there in four days. In puerto rico, support reached the level in 10 days. One week after the storm, a member of congress encouraged the pentagon to coordinate a coordinated military effort. A side note, i actually got on the phone with north, about five days later and i still had not put on the necessary assets and had not coordinated with fema what needed to be done. And in haiti, within two weeks we had 22,000 troops outside. But in puerto rico, and the two week mark, we only saw about 9000 military personnel on the island. Notwithstanding the fact that hurricanes, unlike earthquakes, offer much better advanced planning efforts. We did not see that. Mayor, wouldnt you have preferred that the administration offer the most robust planning possible . Mayor otero for most mayors, we like to see faster. Thats what we said from the beginning. The help is coming through. We would like to see it faster. This is the first time for fema and the government of what puerto rico, facing this devastation. Yes, we would like to see it faster. That is why it every mayor has been saying what specifically can be done to improve coordination between civilian authorities and the military . Mayor otero i think the most difficulty for us was the whole devastation of the island communications. If they could come in and establish or assign someone from the military and fema to each municipality, i think we are all learning how long did that take for that to occur . Mayor otero i dont know, maybe three weeks. What is the distance between san juan and guaynabo . Mayor otero 10 or 15 minutes. Area. In the metropolitan it wasnt any problem to move but it was a problem for them to get three weeks to get to you. I drove there from san juan. On a good day, it is an hour and a half. Especially because i speed. But in a helicopter, considering this is an american municipality, it takes 10 to 15 minutes to put coordination in, but it took three weeks to get someone to your city. Is that what you are telling me . Mayor otero not to my city, but two other cities. For example, how long was that neighborhood separated . Mayor otero maybe 20, 21, but that is important for the mayor and how it. We are the First Responders. As soon as the hurricane hits, and it ends, our people were on the roads. Let me make this clear, im not accusing you or the mayors of puerto rico of being derelict, i am accusing the federal government and fema. So if theres any delusion that somehow what occurred in puerto rico is normal or sufficient, they are wrong. People died because of this inaction from this administration, and the fact that anyone thinks it is acceptable is disgusting. If this had occurred on the mainland well, it did occur in texas. If we had done this kind of inaction, we would have generals stripped of stars, fema administrators fired. The idea that it took that long for some of the fema coordinators to coordinate with the municipality, it is ridiculous. Thank you, mr. Chairman. Earlier, there was discussion about the jones act. I want to answer some of the comments mr. Lowenthal made earlier. This has been fascinating listening to people talk about the jones act. Did any of you know how many to servectually rico that were nonjones act complaint . I can answer that. One. It required more time to deliver goods to puerto rico than domestic. This is a firstyear prices in miami are 23 higher than they are in san juan. Miami than in san juan. This is such a disservice. We can continue to sit here and Makeup Solutions in search of problems, or we can focus on Real Solutions that are needed. I also want to remind you, gao did a study. It could not determine that the jones act caused increased cost of prices in puerto rico or otherwise. Im going to try and stay focused on things that are Real Solutions. I want to ask your question. Got back from puerto rico last night. It was a fantastic visit. I learned a lot. It was great to meet with you yesterday. Can you talk about your thoughts on the state of puerto ricos infrastructure and economy prior to the hurricane, and the impact . Ms. Jaresko in terms of electricity, it is clear it was neglected for decades, the maintenance had not been done, and the investment was not made. The that, we had clear sets of problems with wastewater treatment. In terms of governance, that is why this was put in place. In terms of fiscal controls and structural balance, thats why the congress put it here to work on those problems prior to it. Thank you. After hurricane sandy, 95 of electricity was restored 13 days after in new york. 11 days after, 95 present was restored in new york i believe it was 23 days after hurricane katrina, 123 mile an hour winds, we had 75 of electricity restored in the new orleans and louisiana area. The disparity is significant. We had 3000 miles destroyed, ultimately 28,000 miles of transmission destroyed in louisiana. I want to totally change gears. The governor recently proposed a law to address emergencies in disasters. Part of that law would allow basically eliminating or waving sales tax in puerto rico. Are you aware, or is that on your radar screen . Were you consulted . Ms. Jaresko we were not consulted. I am aware it has been a problem because of the lack of electricity and the collections of the use tax. As the electricity comes back, the projects should also return. So you were not consulted. You are not aware on the front end. So, if ultimately the governor certifies this as in compliance with the fiscal plan and you determine otherwise, what happens . Ms. Jaresko i would hope they would consult prior to putting the policy in place, because it is something that can have direct adverse fiscal effect, and could not be in compliance with a fiscal plan. If they certify that it is, then we have a situation which could potentially lead to a difference of opinion in terms of what the role is, and it is difficult for us once it is certified by the government as being in compliance if we disagreed to reverse that. Can you say the last part again . Ms. Jaresko if the government certifies the executive order or lot is in compliance with the fiscal plan, it is difficult for us your hands are tied. Do you think congress should revisit that in something you believe undermines that, that you dont have the ability to help reset that . Ms. Jaresko i think its clear that the intent was for us to be able to stop things that were having an adverse effect on the plan. Mr. Chairman, enclosing, i want to jump back to the jones act. Jones act is a National Security issue. That is why president obama, president clinton, both the president bush and the secretaries of defense, joint chiefs of staff, and many other military and National Security leaders continue to support and defend the importance of that law. With that, i yield back. Thank you. Thank you mr. Chairman, thank you to the witnesses who are here today. I want to understand the backdrop by which we are dealing this is not intended to address the hurricane clearly, it was to address the economic turnaround in puerto rico. Uses the tools are fine but would you would like to see is legislativehind the mandates. Yet, mr. Zamot, who is really interested in doing the part that you thought was critical, you also said the electricity falls into place and then Everything Else will, i guess the domino effect is that things will get better. But mr. Zamot said in his testimony that he feels theres not enough. He has three steps in his testimony on page three, and says basically im sorry, he is on page three. He says first to bring all available resources to restore power on puerto rico as quickly as possible, secondly to develop and implement a transportation plan, or prepa, and the nearterm recovery activity, and to ensure that the utility exits from title iii. Title iii is the debt. Weve come full circle. The debt is about 74 billion. That is just the outstanding bond debt and so forth. How are we going to do all of this where one of the major priorities of the recovery of the electrical grid how are you going to do that when 74 billion is not going to go away . Ms. Jaresko just to clarify, prepa has 9 billion of the 74 billion, the rest is the municipality. I think the reason the board decided this difficult time to appoint mr. Zamot is to bring these processes together because they can no longer be looked at in separate silos. We cannot deal with the bankruptcy and title iii separate from the transformation of the energy sector. How we deal with the private sector has to be in the physical plan, then we have all this federal funding hopefully coming to rebuild quickly. Im just try to understand. You have 74 billion. I understand 9 billion is prepa, but youre are saying the electrical restoration is the most important. So mr. Zamot, when you talk about exiting title iii, are you talking about 9 billion or the whole 74 billion . Mr. Zamot we will talk about addressing prepa under title iii, and exiting title iii meaning that we have a legally enforceable way forward to transform the electric utility, and part of that is the renegotiation. Is ms. Jaresko and it is the 9 billion amount. But title iii is the hold debt. Title v is what gives you your to give you the plan. Mr. Zamot title iii is in large but to do with bankruptcy it provides the board with a plan. To transform these entities. We incorporate the Economic Developments of title five into that. If we were looking at how to get the electricity back as quickly as possible, it would be to exit the 9 billion debt, that would be one of the first things to do, then all the different plans of the title five can take place, is that a correct statement . Mr. Zamot not exactly. To exit and get the power back on, we need tactical actions on the ground through fema money, grants, whatever it may be, but there is a separate process in renegotiating debt and coming up with a plan to do that under title iii, called the plan of adjustment. So how much money is that . Thats why you are here. How much money is it to actually mr. Zamot we can provide you with those details. Thank you. I yield back. Mr. Chairman, i thought you had something to say ms. Jaresko i wanted to add that having a firm plan of adjustment gives the new private sector new investments some sense of stability and certainty as they make new investments into the electricity sector. Thank you. As i look at all this, it comes down to two key issues that are important to all of us. One is to make sure our fellow americans in puerto rico are receiving the Emergency Care they need at such a time like this, and secondly to make sure we are good stewards of the federal resources that are going there. That kind of provides the umbrella for everything within this discussion. I guess within that context, let me ask you this, and thank you for being here today. I know that tasks that are currently facing puerto rico, and by extension, you and the board, are drastically different than they were before the hurricane. Of course, when congress put this forward, there is no way we could have seen a hurricane like this either. With all of that, should this committee be comfortable with board membership, with you, the associate advisors, all those that have been hired in light of a new task you are dealing with now . Ms. Jaresko i think we are blessed with the quality of the board that was appointed. The expertise on the board that varies from dealing with other municipal restructuring, to dealing with running municipalities and governments, dealing with complex situations and difficult disasters. I think the staff and the board have the experience and dedication you would need and is required for the situation. I think it terms of hiring, we have had to hire additional staff to meet the contracting policy needs. We dont want to get in the way of government doing business. We want to do it in a quick and efficient fashion. I think we are capable of doing that and we are on top of it. So you would say from a transparency perspective to this committee that we should feel comfortable with where things stand in terms of leadership . Ms. Jaresko i believe so, yes, sir. Based on a Committee Hearing we had in march, there was a significant complaint that came forth of the failure of the board to meet with them and understand the technical challenges of prepa. Its my understanding that the creditors actually offered prepa a fiveyear holiday debt forgiveness. The board chose rather to go with bankruptcy. Considering the hurricane and where we stand, do you think that was the best decision . Ms. Jaresko i think the negotiation was one where people could differ. I think the board and all of us should be happy we did not enter into that agreement, because given the situation, the cost would have been an unbearable burden for the electricity. I think we have established a new dialogue with the creditors and the decision to take prepa into title iii. I think were on the way to find some event will serve puerto rico and answer their concerns. We have had that dialogue and will continue to have it. We have federal mediators that work with us. You still feel like it was the right decision to make . Yes sir. I have not been able to find much information on the debt restructuring director. Yes sir. A little bit of his background . Who is he . He is a puerto rican financial expert. He has worked for city citi as well as other banks. He is working as my deputy in this area because we have, as you have noted, a enormous amount of work. Can you share with us committee how much he is being paid . I cant tell you but i will it to you in writing. Thank you. I yield. I happen to sit on Homeland Security and we are supposed to have hearings on the federal response and fema response and it has been canceled three times. Its been completely unacceptable that that has happened. Im glad to hear that we are having a herring today on this. I wanted to echo my colleagues concerns about the difference in response between the Haiti Earthquake and in puerto rico. There have been several articles, the facts are there, you can understand. The fact that you had over 300 military helicopters within two weeks in haiti and only 40 within eight days in puerto rico i think is one of the many statistics out there that shows the difference, which is why i want to make sure to ask question about why this has been happening. I think there has been a huge disparity. I think the response has been inadequate. I think we need to be not just loud on this but to make sure we look at all of the options to help puerto rico recover. I want to highlight whats happening with the water situation. We have heard instances where towns have been so desperate that they have found hazardous sites were there has been water and people have been pretty from them. I dont understand why we are not talking about this. The power thing is very important and we need to focus on that. Did you see the 20 of people without Drinking Water believe the federal response government federal governments response is inadequate . If you asked those people, they will say no. If you ask the mayors, we will send some indifferent. I dont want to cut you off but i want to get through some of my questions. That was the answer i thought you would say. You mentioned in your testimony that 80 of families in your district are without electricity. In most in rural areas also like water. Are you satisfied with the rate of progress in getting electricity and water out in your areas . No, not at all. Thank you. I yield the remaining time to my colleague. I think the lady and the chairman. Toxic coal ash, you dont know any controversy in puerto rico about toxic coal last . We have seen reports. You have to be pretty blind to not already know there has been a huge controversy. Your board does in proof impose a supremacy. I would hope that you would talk to secretary mills act. You seem to have a different perspective than he does. The money is not in order to do something with Waste Management. The money is to create energy. Correct me if im wrong, you said that the purpose is one of Garbage Disposal and not for energy. How do you see it . Garbage disposal or energy . The governor of puerto rico has a letter out and they consider that planned to be both a provider you said primarily. About 2 of the aggregate political demand. You said it was primarily yet they are asking for loans between half a million and 750 million half a billion and 750 million. Considering that part regarding those 2 billion, i dont see how we are going to do that. I want to focus on this issue with you. Do you believe that the control board has such power that you do not have to take into consideration the concerns of the duly elected mayors of the cities that will be effective affected by the incinerator . The statute provides for a public you believe your supreme, kind of a dictator. Thank you, mr. Chairman. I want to thank the chairman and all members of the committee. I think it is important for congress and all members to go there. Its totally different when you receive report and actually look at the people there. People say that the roads are clear, they are not. I was there yesterday. We have more than 18 bridges that would rush away with the were washed away with the rivers. We have a lot of roads closed. We still face a lot of challenges. At this time, 67 of our people are without power. I think that is unacceptable. 20 of the island is without running water. A lot of issues with communications. How do we make things change on the island . One is how the staff will act and are permitted to make fema and the government work with the rebuilding process. For that, i want to thank my colleague for letting me join him and file a bill that will make a direct amendment to the stafford act in the area of allowing not just repair, infrastructure, but actually going into the new century in terms of new technology. Rebuilding, not repair. Puerto rico cant have that. For that reason, i am also disappointed that im not seeing the prepa executive director. I think we need to know more. When u. S. People what their main concern is at this time, its that they do not have access to power. We can continue to see more than 100,000 people leaving the island every day. 1000 people leaving the island every day. If we do not have a nation with power, we are having hospitals working with generators. If we dont have access to electricity, we may lose our Manufacturing Industry or pharmaceutical industry or medical device industry. And that is more than 32 of our gdp. We are not tackling those problems. Not having here the prepa director means we dont know what is happening there. In that regard, i will ask that the board, you say that the board has the power to name a chief transformational officer to take over the management of prepa. I noticed that governments and legislatures against that. You filed a motion in the court to allow that to happen. Do you have the power or you do not have the power to actually named the coordinator of the board . We believe we do have that power thats why we filed a petition in court. We believe we have that power under title iii as any representative of the debtor, the board is represented of the debtor, to name a chief restructuring officer. Then you do not need any change in the law . You dont need any new power to make that happen . Thats the question this committee is asking. What do you need in terms of helping the people of puerto rico to recover . We believe it will help us move more quickly to restoration of power. That is the only reason the board took this position. In terms of what we need, the judge can make a decision. The reaffirmation of the congress are conditioning of further preparations of this would be helpful. Is would be helpful. I have plenty of questions that five minutes will not make so submitted in writing. I want to thank revisited gonzalez for being on all these trips down there. I can you use a more time we get there. But we have a couple speakers. Mr. Soto, you are recognized. I represent the orlando, florida area and we have hosted 90,000 Puerto Ricans in florida and care deeply about the recovery. I know i do not have to convince the people of puerto rico that femas response has been inaccurate. They are living a nightmare. However, prepa is part of a problem. Its been a vehicle of political patronage for decades and has exhibited gross incompetence. It has been mired in debt. Prepa is failing the puerto rican people. I encourage this committee, along with our governor and the Puerto Rico Legislature to embrace three principles. One, embrace renewables. Two, rebuilt with resiliency. Three, an act critical reforms. For embracing renewables, we must continue on of having 50 of our energy by Renewable Energy. We take up the task of innovators like elon musk and others to look at solar and wind and biofuel. We have an season long year long growing season in puerto rico. This can be an energy model for the 21st century if we invest correctly. We must rebuild with resiliency. We must build an infrastructure that withstands future hurricanes. It puts power lines underground when appropriate and in other places using cement poles rather than wooden ones. Lastly, we need to enact reform. I would like the legislature to pretty prepas daily monopoly. Florida has both private and Usable Energy systems in our florida system. This is common throughout the United States. I encourage you all to set up bridges to be bit out and allow utilities to be able to bid. If they build bid, they have to pay for part of the rebuild. They should be meeting these renewable standards. I worry that the federal government along with the puerto rico, government is not going to be able to pay for this on its own. What is the total cost of the rebuild . We are looking at that right now. We do not have a final estimate. The estimates are broad. Will it be north of 50 billion . For the island in total, there are some estimates suggest that. Is it reasonable to think that the federal government along with the commonwealth government is not going to be able to pay that all it . I think it is only reasonable to have a mix of federal and private dollars for that recovery. Do you think mayor such as yourself in other disabilities will be interested in bidding . The thing is, right now, there is a fiscal problem in the municipalities. That is why im saying take care of the state government. Now you have to see the municipalities. We have lost revenues. We have lost our businesses. We have problems. We are the First Responders. Is a possibility in the future been in that . There is. You think that this would have to be part of that vision if we are going to be able to rebuild a more resilient grid in puerto rico . Yes sir. That is still a solution for puerto rico right now. In the past, a single monopoly has not worked. We also have a responsibility to the taxpayers your helping to rebuild, hopefully very quickly, to make this as efficient and resilient as you have described. I encourage this committee to work with the governor, the legislature, and the message board. The promessa board. I yield back. Cracks we are coming close to the witching hour. I want to make sure that everyone who is not yes that not yet addressed has a chance to do so. Mr. Brown. Two weeks ago i had the chance to visit puerto rico. I do want to take the time to thank you for your role in addressing the financial ability of puerto rico area mr. Mayor, i want to thank you for your leadership, particularly in this very trying time. When we were on the ground in puerto rico, eyewitness challenges that Puerto Ricans face every day and what it will take to rebuild a stronger puerto rico in the aftermath the storms. We visited a town in the interior of the island where homes and infrastructure were extensively damaged. Many residents struggled without power or access to clean Drinking Water. They do all they can is one another. Its been a month and a half since Hurricane Maria ahead. As we have heard, more than 60 are without power. More than 20 of the population does not have access to a source of clean Drinking Water. Close to 5000 continue to live iclose to 5000 continue to live integration authors. In temporary shelters. 21 of 51 Sewage Treatment plants are down. The people are resilient but they feel isolated and got. I cant begin to describe in words is frightening, erie dealing that i got when the sunset and darkness to send it darknesshe sun set and descended and completely encompassed this small town. It is frightening. It is no wonder people feel isolated and gotten. The number one priority must be relief and Recovery Efforts will allow you to get back on their feet. Then and only then after ensuring the immediate needs are met can we commit to the longterm recovery. I get that it is overlapping but i would hope our discussion today, whether it is nepa or the jones act, that should not influence the more immediate concern. We will have to reconstruct the power grid. Doing it a new and better way. We will focus on building resilient and sustainable infrastructure. We will ensure Building Codes that are minimized to resist will be enforced. Our focus today is on the dire situation on the ground to provide Puerto Ricans with every federal resource they need. That includes the Oversight Board and the government. Avoid controversial and unaccountable contracts. Like white fish. You cannot turn this around overnight. We have to remain focused on the immediate needs of our fellow americans. I will yield. Thank you very much for being i here. You tell us your annual salary. 96,000. What is your annual salary . Is a matter of public record. It is in the public record. Can you tell us . The board found a competitive ompensation of three and 315,000. We are running low on time. I like your bill. Your wide it, let me get some urisdiction as well. Doesnt always go to a different committee. Youre recognized. Both of you. [no audio] for inviting us today and all your work, i thank my colleague, jennifer for her work. Do you believe the financial oversight of the Management Board is subject to the oversight power of the congress . You believe the board is accountable to congress . Yes sir. I am very disappointed in the letter that my sister and friend rote on august 22 expressing her concerns were the lack of transparency and supervision over spending decisions made by the board has not been answered. We had an answer for you but were waiting to complete our audit. We want to attach the audit to the response. I appreciate that if things get somewhat to normal we could get a response. Absolutely. As a result of Hurricane Maria, with the Board ChangesResponse Plan on the island . How does the plan to improve the finances of puerto rico a time when the government has very little if any revenues . The board immediately with its petition to fully enforce the fiscal plan and made a statement that it will not look into rias stating that until these the first year. We look at improving the revenues, the number one issue is electricity. The focus of the board is in employment of a cto and getting electricity back for all the reasons you have described. We need Revenue Generation that can have tax revenue for the right of the government. We will look at all measures of the next few months in terms of compliance and reduce expenditures were possible. In the end, we will have to be looking at the population in puerto rico and how we can assure that we can provide the Government Service necessary. To provide liquidity that we cannot generate. You were appointed coordinator by the board and you have to titles of the board. I supported her appointment as cto but i do have some concerns about you upholding collectivebargaining agreements. What do you hope to accomplish in your new role . How do you plan to make prepa more efficient and honest . Your creative plan. It will be a legally binding ocument. Among the options are a number of uses of private capital for hat. We see any of those options is compatible with current labor practices. We dont want to micromanage but keeping us informed is very important because eventually we get asked questions to. In our District Center of the nation. History has a way of asking questions even if you are not there. Mr. Mayor, thank you for all you do. I cant imagine being a mayor or governor at this time. I know that there was a feeling that you are prepared, both the mayor and the Central Government. Looking back, is there something you as mayor could have done to be more prepared . And the Central Government could have done to be more prepared . Or was so devastating that you never saw that coming . We are all going to learn from this and after this he will sit down and establish a new form to receive this storm. This is why were asking you for help. We have to do things differently. I have one last person that has questions. Thank you for calling this hearing. I am coming to this as someone who has experience and training in humanitarian disaster elief. Im a graduate of the Harvard School of public health. I focused on humanitarian exacerbate humanitarian disaster aid. I was the medical director for a displacement camp in haiti. Ive seen firsthand the challenges that arise in the middle of a humanitarian crisis and the importance of having clear leadership. He importance of making sure everybodys participating. I also understand there are two phases. The one to prevent loss of life and the one that you are involved in which is the longterm development, infrastructure, development, so we can have economic revitalization and keep the population in puerto rico. The topic im hearing is your thinking longterm in ways that ill help rebuild puerto rico and make it less honorable for the next hurricane that we know is going to come at some point in the future. Let me tell you what i found two weeks ago. I did a Needs Assessment based on my training experience. He people in puerto rico are very hardworking, humble, appreciative individuals who despite the Living Condition they are in our helping one another with everything they have left. The men and women are doing an exceptional, good job within their own departments. Im very proud of the work they are doing. Mayor, who is in charge . Name me the person in charge of overseeing the entire operation. Promessa and fema. Who is in charge . For many areas it is still unclear. Fema Officials Say that the puerto rico government is in charge and the highlevel levels in the puerto rico government Safety Measures in charge. While there are countless men and women on the ground doing meaningful work, a lot of work is doing in silos. Right now, the Central Command model is not effective for the type of crisis in order rico. Everybody is concentrated in a Convention Center in san juan. The people on the ground, the First Responders, are dealing with problems they keep arising with electricity, food needs, shelter and what we need is to change the structure, hatfield command post with everyone involved and have less bureaucracy, more flexibility, more decisionmaking control to that when there is a new challenge you can respond in a rapid manner to do with the crisis. Having said that, mayor, what do you think about that idea of having field command posts out of the community rather than all of it being done in Central Command . Thats what i said. You would be in favor of that . That is one of the best ways o bring resources to bear. I saw that when i was with the 82nd airborne. They had all the takeholders. We were able to address needs. We Work Together in a collaborative method to save lives and move resources into the community. I see that is lacking in puerto rico. That can be resolved if we change the coordination. We have several things that need to go on here today. Let me break the rules and give one more minute to a few to say the last statements. Then we have to go. One last minute. I will ask, what is your annuals salary . 625,000. What is the total cost of the imposition of the jones act . You make three times of what the chair of the Federal Reserve makes. How can you run puerto rico without knowing the cost . Do you know when the johns act was in a minute . No. In 1920. You dont know the cost. Many economists have suggested that the cost is between 350 to 400 million a year. If you multiply that, you can see how miniscule the 74 billion would be. Can you provide us with the total salaries . We can do that in writing. And how many people are assigned as bodyguards. Thank you mr. Chairman. I was just in puerto rico last weekend. For the first time i was able to see my family. They were where the hurricane made landfall. It looked like someone dropped a omb. Still, they are waiting for people to show up. My brother got surgery on his houlder was moving debris. This is going to be a very painful and long recovery. People are not even discussing the emotional threats and tall that is taken on the people of puerto rico. People are leaving because they feel they have no other option. People are coming to florida, ohio, pennsylvania, new york. Theres no hope. There will be no hope if you dont have accountability. I hope that you do your job and make sure the taxpayers money are protected and that we use that money to rebuild puerto rico. Please, thank you. We had a witness to build us bailed on us last minute who could have been answering those questions. You have motion . Are you going to . Make your motion. I make a motion that the following letters be placed in. One from the hispanic federation. I will give you one minute. I think the greatest heroes in this are the people puerto rico. Theyre the people with the eart and doing all they can to survive this difficult time. I want to thank all the personnel who are working there. Theyre doing all they can to recover. But we need, as congress, to make many changes in a lot of federal laws to provide services. That is because our condition of the territory. We are not receiving the same amount of funds. The same amount of attention. Would like you to submit in writing all your proposals for tax reform, health care reform, infrastructure reform. I need that all in writing because we cannot continue to discuss things in the air without having the right information for everyone. I thank you all for being here. I think our guests for joining us in this committee. I think the three witnesses. The board as well as mr. Jamaat. I think we have heard very clearly the importance to go forward. Whitefish was not discussed here but i look at the board in the future because there is a procedure that must be reviewed. To solve this problem in must be done with coordination and nonadversarial concept. The board is not going to go away to your job is finished. We have to recognize that. We want to make sure you have the tools necessary to do hat. Lets face it, the greatest the future of puerto rico. That has to be the first thing. Under rule 30, Committee Members have up to three days to submit any of the questions. You get the joy of answering those questions and you have 10 days to do it. Thats life. With that, i want to thank everyone for being here. We want another sequel to this next week. The governor and his staff will answer the same kind of questions. We are adjourned. The house ways and Means Committee continues work on the republican tax reform plan today before sending it to the full house for debate and votes. Watch live coverage this morning at 9 00 a. M. Eastern on cspan 3 and cspan. Org and listen live using the cspan radio app. Cspans washington journal live every day with policies and issues that impact you. Coming up this morning, well talk about president trumps trip to asia. Well look at the results of governors races. The Political Editor for national journal. Rob whitman will offer his perspective on president trumps trip to asia and u. S. National security interest in the region. Be sure to watch live at 7 00 eastern this morning. Join the discussion. President trump delivered an address to the south Korean National assembly as part of his 12day trip through asia. He spoke about north Koreas Nuclear program. [speaking foreign language] [applause]