[inaudible conversations] thank you. The committee will come to order. The committee is meeting to receive testimony of the status of puerto ricos construction and recovery after recent Natural Disasters. Beginning with of the hurricane in 2017, a series of earthquakes that occurred and that just this past september for any Opening Statements and the ranking minority member over their designees this will allow us to better hear from our witnesses sooner and help members keep to their schedules. Therefore i ask unanimous consent all of their members Opening Statements be made a part of the hearing record and submitted by 5 p. M. Today or whichever comes first. Hearing no objection, so ordered. The chair may also declare a recess subject to the call of the chair and without objection, the member from new york is authorized to question the witnesses in todays hearings. After permanent members have had that opportunity. As described in the statements, documents or motions submitted and h nrc, members physically present should provide a hard copy to distribute by email. Members are responsible for their own microphones and members may be muted by staff to avoid inadvertent background noise and finally, members or witnesses experiencing technical problems. I now want to recognize the vice Ranking Member, the vice chair if he has any Opening Statements. Hearing none the, let me turn to the vice Ranking Member of the committee. Thank you, mr. Chairman. I appreciate the committee doing the hearing and actually taking the time to the update. I think its important what we are doing today. I think puerto rico has faced many [inaudible] i think we are having some technical problems. We are not able to hear the commissioner. Can you hear me now . Now i can. Many because of the heroes and for example we are talking about the money coming from hud to do an update that is one of the main issue was we are facing because in the situation sometimes [inaudible] with a lack of maintenance during all those years and may require doing an upgrade and that means not just equipment updated by decades but also in terms of the administrations and counsel. One of the issues for the local Companies Since 2017 have not only [inaudible] many of them saw firsthand what was going on. After fiona, a few members of congress as well saw what happened but the results of been slow. The first were announced only lead 2020. Getting the money out is a situation where one third have been dispersed. Why is that, i think the government officials can get that money out. With that i will yield back. Let me recognize you for any Opening Statement or comment that you may have. Thank you and i think everybody for being here today and i do look forward to continue work to ensure that puerto rico has a stable footing and also look forward to the day when we are all in person back in the hearing room again and we are not doing remote testimony or voting. As we see again the trouble that we often face with technology. I believe that obtaining Financial Stability and repairing infrastructure and ensuring access to affordable and Reliable Energy for the residents of puerto rico set the island on a solid and prosperous path forward. I appreciate the ongoing and tireless work here in congress on behalf of the residents of puerto rico. Devastatingly, landfall september 201st, 2022 crossing the Southwest Corner of the island it brought 85 miles per 85mile perhour winds and heavyn the island. Almost unimaginable rainfall. Totaling 32 inches and 72 near the southern coastal city. If we can figure out how to move that from puerto rico to california, that would solve a lot of our problems but we dont have a lot of that technology yet. The storm with the already fragile grid that have been passed but never repaired or upgraded in 2017. Early october and i traveled with of the resident commissioner to puerto rico and met with the governor that im glad to see here today. To learn about the Recovery Efforts underway and to assist damages in several municipalities firsthand. It was reassuring the amount of progress that had been made and less than three weeks after fiona made landfall but to restore the critical infrastructure, homes and communities after the devastating storm and flooding. Federal agencies need to continue working with the puerto rico government and municipalities to recover from the Natural Disasters that have impacted puerto rico. We should strive to increase the resiliency of the islands so that when the future Natural Disasters quicker recoveries and less damage. The Power Authority has been plagued for decades with issues leading to inefficiencies of operations. For the electricity transmission and distribution system. Thereve been several challenges and we need to Work Together to ensure a grid that provides affordable and reliable electricity to the people of puerto rico. As i said before i support and all of the approach. In any way that we can i yield back. Let me recognize myself i want to begin by thanking my colleagues for taking the time to join us for this whole Committee Oversight hearing in the postdisaster reconstruction and power grid development. In the last five years puerto rico has been affected one after another and the litany is there and everybody is aware of the latest being september 2022. The to the compounding effects of Climate Change especially the increase in the frequency and the intensity of hurricanes storms. In puerto rico we will also discuss the legislative proposal designed to provide. We will hear from local government officials although the administrator was unable to join us today i want to thank the Biden Administration for its Rapid Actions to ensure the resources it needs to recover from previous Natural Disasters. After Hurricane Maria, the impacts congress appropriated a disaster for the territory but the reconstruction process moved slowly, very slowly. For almost three years the Previous Administration was giving dollars for projects on the island. Further although they provided significant support the agencys response to the structural issues including the territories financial situation. The Community Organizations and small businesses. In june, 2021 the energy grid was transferred from the Power Authority to private operator which was tasked with rebuilding the grid and since then puerto rico has been, has not seen an improvement in the frequency in their duration. The local government was conducting oversight to operate, maintain and modernize the electric grid. Additional accountability is necessary. The residents of puerto rico deserve a Reliable Electric Service to increase the resilience of the government of puerto rico has significant infrastructure investments. This includes prioritizing projects to modernize the grid to a more reliable system for residents thats decentralized and less reliant on fossil fuels. They dont have the funding to go it alone and at the federal disaster that had been appropriated is so far did not provide the resiliency to the most vulnerable populations. Im seeking to include in the post emergency supplement 5 billion for the department of energy to provide the storing systems for low income households and households with people with disabilities. I want to thank the secretary granholm for supporting the proposal and amidst the blackouts caused by the hurricane the preliminary study from the lab of Renewable Energy found the high exposure four times the amount of energy that it needs for solar power. Now i want to welcome all the witnesses. Thank you for joining us today. We welcome your insight and recommendations. Now i will turn but first let me remind all the witnesses the fiveminute rule will be more aggressively monitored. We have a lot of witnesses and its a voting day. Going back to the districts of their homes and so in order to maintain as much participation by members. I hope everybody sticks to that rule and i would remind members as we go forward. Now let me introduce the witness. Sir, thank you so much for the time to be here and you are recognized for five minutes. Thank you for holding this hearing about the recovery of puerto rico. Im pleased to report they are emerging from a challenging period with strength and optimism evidenced by the islands economics as the economy recovers we are working to ensure the Energy System is reliable and resilient in seeking fair treatment in medicare as well as congress and the Biden Administration have committed to significant resources to the islands recovery after the 2017 hurricanes, the subsequent earthquakes, the pandemic and the most recent hurricane. As of today, 70 . Out of 12,000 eligible families, more than a 60 families have had their homes rebuilt or received housing vouchers. In addition over 2300 residences were under construction or preconstruction. Fema has obligated over 91 of the funding allocated for emergency work projects at almost 20 has already been dispersed. We now have 2,132 projects under construction for a total cost of 800 million and over 1600 1600projects over 1. 4 billion e in the permitting process and should Start Construction soon. The electric system is one of the highest priorities. We are committed to moving away from fossil fuels towards Renewable Energy and converting the fragile and integrated grid into a resilient and interdependent one that consists of the businesses without reconstructions underway. With multiple substations repaired, thousands of streetlights were replaced and solar customers connected. Also, 90 Energy Products are in the design plays, 51 have been approved, 40 projects under construction. 1000 mw and utility projects including 200 megawatt Battery Storage are in design and construction and about to finish a process for additional Renewable Energy project that will generate 1000 mw and Battery Storage. In addition, we are installing solar and Battery Systems in all homes rebuilt under the are 3 program and al located 500 million of funding for assisting low income households in acquiring solar panels and batteries. Moreover work has begun to deploy 1. 3 billion in dr funds for microgrids and Energy Storage systems and remote communities and First Response agencies. However given Hurricane Fionas recent impact on porto rico our electric system has suffered additional damage. After i requested Emergency Assistance to stabilize our power system, fema agreed to provide resources to assist puerto rico in its Power Generation capacity and improving transmission and distribution of energy, the plan proposes to install temporary generation, highcapacity generators and to perform shortterm repair work in our generation plants and electric grids. This will allow puerto rico to concentrate all efforts on advancing the transformation and modernization of its electric system while our people have stable service. I ask this committee and congress, providing 100 match for Energy Related fema projects, giving authorization to fema to adjust estimates of approved projects given the recent increasing cost of Construction Materials and supplychain disruptions, the stafford act to authorize fema to consolidate a single award of federal assistance, with other members of congress to out locate 5 billion in directed funding for residential solar Energy Systems on the island. Finally i must remind this congress that even after the successful restructuring, puerto rico will remain integral to our century long status question as a result, the people of puerto rico voted and show statehood, congress should call for a vote on the political future of puerto rico and commit to implement in the will of the majority. After all, that is what democracy is all about. I thank you for favorably reporting hr 8393 out of this committee and urge congress to approve it, thank you. I will pass it to myself at this point and ask the Ranking Member if he has any questions for the governor. Thank you, mister chairman and thank you, governor, for being here for your testimony. We know both Electricity Generation and transmission distribution were affected by Hurricane Fiona, the wind and rain knockdown powerlines, supply lines were interrupted as we noted when we were in puerto rico. Based on the information that you have, was the power loss primarily the result of downed powerlines or lack of Electricity Generation or some combination of the two . Where would you say the most emphasis is to be placed . It is a combination of the two. Luma estimated the damage to transmission and distribution grid could amount up to 4 billion but at a minimum it will be 2 to 3 billion for repairs that need to be done. You are talking about mostly lines failing, falling polls that need to be replaced, switches, breakers, transformers damaged, among other damage. In the case of generation, some of the generating unit suffered damage because of the excess humidity they were exposed to and i understand the amount of the damage, involves a number luma estimated for repair of the distribution grid but it is substantial. Fema at my request came to puerto rico after fiona and made an assessment with the corps of engineers and epa. They visited us, 35 facilities, substations, critical substations and they confirmed, 2 weeks ago they gave me a report with pictures and everything, the damage about had taken place and fema has agreed to come in and assist in increasing Power Generation for period of time which could range between one year, and a year and 1 2. This is important because right now because of units failing, generation units damaged, we are barely supplying the demand that our people, our constituents have. We cannot repair the units or give them regular maintenance as they should. Are you talking about or youre fired units . Im talking about all of them. Fema already agreed to make repairs, what we flew over which is a bunker did plant, and another plant that is mostly or should be an lng plant, the san juan plant, and in the case of a bunker c oil burning plants. San juan i have to move on, governor, you brought a lot of points i would like to discuss more. We talked about lng exports and you said youve got to places where you can import or bring ships in with lng but because of the jones act and because we dont have lng, you are having to buy the gas from sierra leone or maybe you told me another country. Mostly trinidad and tobago, far from what you mentioned. We could be using domestic produced gas coming out of the gulf, but also when we look at having an electric system that is more affordable, more reliable and cleaner than the bunker oil, theres been a lot of emphasis on offshore wind, solar, but to give that base power it seems like there would be more of an emphasis on building gas plants and figuring out how to get domestic gas there from the gulf of mexico, provides clean reliable, affordable power when we are rebuilding the system. You have a lot more discussion about that. Let me quickly respond because it is something you should know with all respect. The Energy Bureau of puerto rico just authorized a request for proposals to heaven puerto rico a 300 mega lng plant privately financed. It hasnt trusted the authority to handle the process request for proposals and i envisioned that process will start at some point early next year so we will be seeking a private lng plant at that level. Thank you very much. For your knowledge. This hard and fast rule has been broken as we speak. I recognize my colleague from arizona. You are recognized. Thank you for being here today, about puerto ricos resilience and disaster reconstruction and proud to work with you on this issue during my recent visit in the aftermath of Hurricane Fiona. Being present on the ground and same situation firsthand it is an important step understanding how to be most helpful moving forward and to note the continued question of puerto ricos statuses hundred federal assistant programs for years and continue to do so until it is resolved surpassing the status act out of this committee was a step in the right direction and we should Work Together to bring it to the 4. A couple questions. Number one. Hurricane fiona was only the latest in a series of hurricanes and Natural Disasters impacting puerto rico in recent years. What changes did the government of puerto rico make to improve Disaster Response after Hurricane Maria . The fema administrator is the one that has priced us because of our response to fiona. Coordination she saw in puerto rico between our First Responders and fema can be used as a model for the rest of the nation. She also said that for example they have warehouses which supply in puerto rico, four of them now, in maria, fema, one warehouse, much better stocked to help our people. The way fema works is they step in if our local agencies, municipalities are not able to supply the needs of our people and coordinate ngos, they didnt have to use much if at all of those supplies because we were taking good care of our people. The area where i have to admit there is still a lot of room for improvement is power in puerto rico because when a hurricane happens there is a black out, that is to be expected anywhere. There was a huge black out in florida just recently. The question is how soon can you restore power which is an essential service . In puerto rico, basically, it took luma about 2 weeks to restore 50 of the power, one week roughly. A little more than one week to restore 50 of our Power Generation. Two weeks, 75 . Three weeks, 95 . 100 by a month. That to me is too long and the reason, we have an integrated system which causes, when there is any major disruption the system shuts down to protect itself. We dont have what is called in the energy field black start units which means our plants cannot restart unless they have Battery Systems allowing them to do so without being connected to the grid. It sounds nonsensical, the plants generating power need power and a lot of the old plants dont have those. Part of the work that we will be doing in the near future. We need to improve our Energy System and we dont have this power disruption for so long after we will always on the subject, what is the plan for energy that you are putting together to meet it by 2025 . A lot of things are ongoing. I mentioned that we are devoting 1. 3 billion of funding for distributed energy, remote communities in puerto rico and critical public facilities. The first that we will be installing takes care of her Major Medical center, there will be a grid for that because it is a critical facility but the process will be outstanding in early 2020, in january 2023. It is about to happen. We are devoting 500 million of see bdg mid funding for incentivizing, low income households to have solar panels and batteries at home, we expect to reach 25,000 households doing that assuming the cost of those Solar Systems for them among other initiatives we are doing. You are recognized for 5 minutes. In a moment im going to yield the remainder of my time to the resident commissioner, Jennifer Gonzalez cologne. Her dedication to the islands legendary. A few brief comments. Pedro pierluisi, i enjoyed serving with you when you are a resident commissioner to congress. I enjoyed meeting with you and your office recently on a visit i made to the island, good to see you again. The federal government has made fixing the energy grid of puerto rico and the Us Virgin Islands a top priority since hurricanes maria and are met, yet government run utilities remain mired in debt and mismanagement. 150 million for building an lpg terminal and prepa owes for work performed immediately after the hurricanes and despite actions by this committee, they are still in bankruptcy. Its time for the islands to pay their debts and with that, i yield the balance of my time to the gentlelady from puerto rico. Thank you for yielding the time. Always available. Good morning. The biggest challenge puerto rico is facing his unstable conditions of the grid in the generation plant and we all know that home. Congress has provided puerto rico and fema allocated funds. And also received, for enhancements. Im concerned a lot of this funding is allocated but not dispersed, can you explain how youre getting that money out of federal agencies, and ive got another question. For three years the spending in puerto rico was emergency spending by fema. For three years, hud hadnt authorized us to use much of the funding that we referred to. In late 2020, basically fema allowed us to act access 9. 5 billion we have for the electric grid and generation systems. In may 2021, was when fema changed its bureaucratic procedures to expedite access to this funding. Since then, fema has been working closely with us. It is streamlined its environmental, Historic Preservation review and now the projects are moving forward. I mentioned the numbers, 40 project under construction. In addition, fema has allowed us, has given us access, allowed us to get 50 of the cost of the project in advance, so the cash flow to start the projects can have advanced of 25 of the cost of the project and as soon as they spent that in accordance with requirements, 25 more, that is a game changer so that is new. In the case of see bdg are, by the beginning of 2021, only 100 million had been spent, now we are to one. 3 billion and the secretary of housing will explain to you, to members of this committee all the initiatives that are goion we are getting, momentum is there. I envision a very busy 2023 with thousands of Construction Projects on the way. You are requesting an act to authorize fema to consolidate against Hurricane Maria and fiona for the federal assistance so that would mean the issue of why we need such amendment, this amendment is going to be burdens that you are already talking that fema is working with you . That is another measure to streamline product requirements. Managing these factors at the same time, maria and irma along with fiona which cost damage, some of the projects we are working on for maria related damages, it is nightmarish. It makes the life of fema personnel, our counterpart in puerto rico much harder so that is why we are requesting consolidation which is been done elsewhere. Thank you. The gentleman yields. Let me now ask, going down the dais, mister soto, if you have any questions you are recognized, sir. Thank you so much, chairman, governor, welcome back to the Natural Resource committee and thanks for always being so accessible. For ricoh faced many challenges, Hurricane Maria which we saw together, Hurricane Fiona which thank you for hosting us down there and appreciate your strong response to Hurricane Fiona. We saw flooding particularly in the south so we take your comments very seriously about the need to adjust the fema funding to recognize Hurricane Fiona has exacerbated some of these problems but thank god for the strong response we are seeing and quickly recover from that. The Disaster Relief funding is there, that is the positive news and we are finally seeing it start flowing so i was excited to hear that 70 of the fema Disaster Relief funds are there and how critical thats going to be. First question has to deal with luma and power, you inherited a luma contract and you are doing your best to manage puerto ricos Energy Distribution with them, making sure that we can improve the grid. Why do you think the contract and extension by luma is vital for keeping puerto rico on the path to more resilient future and what would be the consequences of canceling the luma contract if that were to happen . First thing i have to say, Energy Transformation law which was approved on a bipartisan basis in 2018, law 120 which is the one that says we cannot continue doing more of the same relying on a state owned monopoly, we need to do a Publicprivate Partnership for transmission and distribution and generation and flip the two so theres no monopoly in puerto rico, luma was awarded this contract after a very detailed and exhaustive p3 process. The attorney general of puerto rico explained every step that was taken before the contract happened and actually i knew it was the proper procedure for the contract and that the contract had no legally invalid clauses and so on. I knew it and understood it but it is great the head of the p3 authority requested this opinion from the attorney general and i welcome all of you to read that opinion because it explains the process. Explains the contract and it validates it the same way a federal judge, in the bankruptcy process has so far validated it as well. A lot of said out there but i have to say that first, secondly canceling that contract is a nightmare. We have 1. 5 billion people in our electric system being served by electric systems, changing luma from one day to the next, even transitioning luma out for for a year or a year and 1 2 would disrupt the service we are getting and belay the transformation you are following up on and the reconstruction you are following up on because our law would require i start a new p3 process to substitute luma. That to me is out of the question. Luma come december 1st would have two options as i see it, continue rendering services under 15 Year Contract that was entered into, thats one option, waving some conditions that are set in that contract, or continuing to Render Services under a submental agreement that was entered into because of the bankruptcy process until the bankruptcy process ends. As simple as that. That will be announced at some point before december 1st but nobody should expect that i will allow if i can help it for a major disruption of our system, just because some people didnt like the p3 process that happened before i assumed office and dont like the contract that was entered into and it is the law in puerto rico. Thank you. We know you will continue to press to hold them accountable and make sure we continue to get puerto ricos electrical grid back to Reliable Energy and yield back. Thank you, mister chairman. Im fully aware the purpose of this hearing is to deal with postdisaster reconstruction, and power grid relevant but the reality is every time we have a hearing here, it is one of 2 things, and it is happening here again today, it is coming here with hands out asking for more money or asking for statehood. It is no secret i oppose statehood for puerto rico and im not alone in that position, no secret many people in puerto rico want statehood but there are many compelling facts and arguments that need to be considered and the bill that this committee forced through, hr 1522 had intrinsic flaws in it. The bill did not allow for example puerto rico to remain a territory. It couldve pieces of legislation allow for all possible options and that is a pretty significant one that was absolutely left out, the bill had questionable rules that would have forced the people of puerto rico to put laws into their constitution that they had not agreed to. The bill also did absolutely nothing to solve the debt crisis they have been facing, had they voted to be independent, would have made things even worse for the new country financially and what disturbs me more than anything is this committee rampant that piece of legislation through the process through, without having hearings on the legislation itself, that is unacceptable. When dealing with Something Like statehood, that should be well thought out. It is a meticulous process, its not something to be rammed through, nor is it something to be dealt with without any serious thought and just say lets vote on this, lets move with it. It is absolutely not the way to deal with it but that is the common way that this committee has dealt with this issue in puerto rico and quite frankly the puerto rican commonwealth has been suffering for quite some time with issues that have majorly impacted the residents thereof in negative ways and have halted their future progress. I was here in 2016 when the puerto rico oversight management economics ability act, i was here, some others were here at that time as well. And here we are 6 years later puerto rico still does not have a balanced budget. Theres been progress made and im not going to imply otherwise. I know theres been progress made but we are not even close to having a serious discussion about statehood. There are so many issues and we are playing games with the issue making it happen without serious hearings. The government must take response ability and fix the major issues facing puerto rico before we even begin any serious discussions here about statehood, and this committee right here should be holding more hearings about the statehood, the status, i dont remember last time we had a hearing to deal with it. That should be a priority if we are going to continue. In order for us to move forward on any issue regarding puerto rico, we see more growth from the government, the terms need to be met, the bonds need to be rated by major Credit Rating agencies. I believe this committee has done puerto rico a great disservice by passing legislation right here without even holding additional hearings and i call on this committee to be responsible in that regard and lets have hearings on the status, quit playing games with this and move forward with it and with that i yield back. Before i recognize the gentle lady from new york. That was not a question. Time is up. At some point i would like to make a brief reply. When someone asks a question you can use that time. I will be respect full to whoever asks me a question. Not on my time. Let me enjoy the prerogative of the chair for a little longer please, governor. Short comment. The american citizens of puerto rico did not come to us with their hands out. They came the same way the people that suffered disasters in florida and in texas came to us, for relief. This reconstruction is tied to that relief. This is not a situation of charity. This is the situation is a situation of mutual support for american citizens regardless. With that, let me recognize the gentle lady from new york for 5 minutes. Thank you for holding this meeting, governor, welcome. We are talking about Disaster Relief and hurricanes because of fiona, because of maria, irma, and fiona, you have money available to pay costs for the reconstruction of the electrical grid. What are you doing to ensure the money will be used to help the people of puerto rico as quickly as possible and not allowing any way a windfall for bondholders that will ultimately benefit vulture funds . Or question has two components. In terms of what we are doing to expedite this, the moment i came into office and the Biden Administration came into office we started removing bureaucratic obstacles there were, marcia fudge and Diane Griswold, i tell you, this is a new day and fema is allowing us to get 50 advances for a project so that will help. Another thing we are doing. Lets go to we will not allow in any way this will allow me to talk about promesa, wiese restructured the debt of puerto rico, we restructured most of the public data that was outstanding successfully. 80 reduction for the government of puerto rico. But it is still pending and Oversight Board along with the government of puerto rico, we are doing the best to reach a consensual agreement. The board needs just a better plan of adjustment, proposed plan of adjustment december 1st to the federal board. Allow me, governor, i have a question. I want to take my word that im not going to support any restructuring that is not sustainable, that is not affordable, that is the track record i have so far. I wouldnt worry. You are telling me that you are going to fully litigate all pending Matters Regarding prepay before you agree to a settlement that will burden the people of puerto rico with unaffordable electricity and a detrimental deal but will further increase costs and only benefit vulture funds . My answer has to be it will depend on the nature and expense of the settlement. Because actually there were outstanding strains before we got 80 reduction in the commonwealth that were settled so i cannot rule out that there will be settlement negotiations along the road but i give my word that im not going to allow them to end up with the debt burden that is going to end up causing extraordinary increases, unacceptable increases in the cost of electricity in puerto rico. It has got to be affordable. You are telling you will not support a deal that will bind the people of puerto rico with a bad deal for the next 30, 40, 50 years . Yes. Okay, because Puerto Ricans cannot afford it. Agreed. So governor, are you going to move forward with a 15 Year Contract regarding luma that does not include financial penalties for poor performance or strong and independent oversight . The 15 Year Contract provides for either penalties or bond payment depending on lumas performance, the Energy Bureau will be publishing the metrics that will apply to lumas performance once the 15 Year Contract is in place and actually, when that 15 Year Contract is in place, the fee that luma gets is considerably less than what we are paying now, the way this works. December 1st, on december 1st as i said before, i see two acceptable options. Either luma starts rendering services under the 15 Year Contract with no payment methodology set forth, or luma agrees to continue rendering services under the supplement agreement until the bankruptcy process ends. Those are the two options. I dont want to even think about the third option which would be to cancel the luma contract and get luma on a transition out of puerto rico. What is your government if i may, the time is over. We can circle around. I yield back. Thank you very much. Miss williams, youre recognized. Thank you, mr. Chairman and Ranking Member for holding this important hearing. I simply would like to yield all of my time to congresswoman gonzalos. Thank you, mr. Chairman, i yield back. The chair recognizes representative gonzalos cologne. Thank you for yielding the time. It is necessary to make clear some issues here. First, he is entitled to his opinion regarding the status of the island but he does not live in port arica, he does not represent the island which nobody from the island bought them for him to make the discussions in the other ones elected to do that job is the governor of puerto rico who is sitting there, and me. Hes a democrat, i am a republican, both of us are respecting the will of the people of puerto rico that voted not once but twice committee times to reject the current territorial status. What we are supporting is what the people of the island voted for, and that is statehood. That is democracy, right . Everybody can have their own opinion but coming here to this committee saying many things about the islands, the main issue before our problems, financial problems, thats the root of the problem. We couldnt be needing any situation if we are not treated as equal under the law. The us congress can do whatever they want to with the issue of puerto rico and we are still facing a lot of things like the state of louisiana, florida, texas there were had by hurricanes as well. Why treat puerto rico differently than the way you treat other states in times of need . I am sorry i am bringing that issue but i cannot be silent when somebody is entitled to their opinion but not respecting the will of the people of puerto rico. Having said that it is important one of the issues we discussed is there are many hurdles for the island to manage federal funding because we are a territory and you were saying a few minutes ago you were asking, you were requesting power barges in highcapacity portable generators, how long those generators are going to be online . The fema regional coordinator for the fiona disaster anticipates the barges could be contracted for within a month or 2 or 3 months in that timeframe. You would remain in puerto rico, and and to give stability and continuous transformation where they continue rebuilding the grid, improving plants and repairing the plants in due course giving them the required maintenance. Thats why we need additional generation. Let me say something. To finish that question. The installment of this will reduce blackouts. It should help incredibly because we are talking 600700 megawatts of additional generation capacity. By getting barges and affordable generators, at the corps of engineers has affordable generators but they can also lease or contract for additional portable generators. Fema estimates there will be 7 of the portable generators, 3 barges, 7 generators, we should be having 600 to 700 megawatt additional capacity. That the game changer that will allow us to repair, continue repairing and improving existing generation plant and the grid because we need to keep in mind what we need is stable power while we transform our Energy System. This committee did not pass hr 1522, we passed 8393. So with that i yield back. Gentle lady yields back and the chair associates with the commissions remarks, the gentle lady is recognized. Thank you, chair, and governor, for coming in and joining us here. I am heartbroken about the difficulties you are experiencing in puerto rico, what the people have endured with the disaster and pain of the aftermath and at the point you made in your testimony that i have suffered and my communities in new mexico, we can appropriate the funds sought, signed bills into law but when the funds dont make it, to help reduce and resolve the problem on the ground, we have not finished our job and we need to keep raising the issues. Would you share a bit more about what has been the failure to actually getting the funds that have been obligated . We will be able to expand, they are in charge of the cb dgr funds in puerto rico and the fema parts but let me give you the long story short. It took fema until 2020, maria happened in 2017, to actually give us access to the pumps, most of the funds. Also for a couple of years fema was handling the disbursements and was in puerto rico. Finally in 2019 if i am correct, if not i will be corrected later, fema allowed them to handle the disbursement but we need to audit you before you actually can disperse. It was a free disbursement audit. When Diane Griswold came into her office to curb a couple months until may 2023 to remove that altogether, for the disbursements process, and that changed the landscape for us. We see a significant increase in disbursement. In cb dgr there was a Grant Agreement imposing quite a lot of restrictions on us and when the secretary assumed office it took her a couple months, april 2021 to remove that Grant Agreement or the strict requirements senate. It is undeniable in our use of funds. You just described part of the issues that we need to look at as a congress, there are statutory constraints and we are dealing with many more disasters and we will need to have congress address limitations of fema to deal with the disasters, what the stafford act right now cannot do the communities need, administratively big changes can be made in terms of removing the bureaucracy and having things move quicker so i think those two, not necessarily the jurisdiction of this committee that we need to look at. Another area i would love and ask that you supplement your answer with those who are behind you with expertise and with a supplemental answer, you re dealing with on the ground. And fema does not deal with fire but we are suffering in the southwest is going to be fire and we need fema, but would love you to ask, tell us from the ground this is what we think the stafford act should be modified, and also i have run out of time but im very concerned about the inequities we are going to see if we dont modify with regard to the nutrition programs and those kind of things, we do sit on relevant committees and think that is going to be important to address. We would like to be included in the snap program. It is only fair we get the same assistance as fellow american citizens. Every citizen should be treated the same. The gentle lady yields back, the chair recognizes the commissioner. Thank you, mr. Chair for recognizing us. We were talking about the situations between fema, many people of the island following this hearing are always complaining that every week we have a lot of blackouts and i explained it myself. I want to know about the draft loans, was rejected earlier this year and in the financial oversight management board, as recently indicated the increased number of customers who intend to go off the grid is going to impact the cash flow, cash they have available for any settlement and Public Opinion is strongly against the idea of seeing their future utility bills paying for active service but a charge to pay the settlement regardless of what they consume. My question will be in your view, how the completion of the plant affect the Recovery Process of the island in the long term and if that will prevent them from investing in their infrastructure . Having plan of adjustment confirmed by the federal court is essential because it would stabilize finances and make it a better counterparty to any entity that deals with it. Now, you mentioned loss of revenue if we turn to Renewable Energy sources like we are committed to because of our Energy Policy law. Im not concerned about that and let me explain why. On the one hand, people who have solar power will reduce the cost of energy for themselves and they will pay less through the system we have, no question about it. On the other hand people having, using electric vehicles will be consuming more power because instead they will be spending electricity and the Transportation Department of the fertile hwy. Authority approved the plan for stationing electric vehicle chargers on all the major highways in puerto rico so in addition, the way this was envisioned is we will be shutting off traditional generation plants as her noble energy comes into the system and we have 18 projects right now already approved by the Energy Bureau and the government of puerto rico to add roughly 850 megawatts capacity to the system from solar power with 200 mw Battery Storage. We also have or will be having one thousand megawatts in Additional Energy projects, and what is going to happen once we keep adding Renewable Energy production, will be shutting off plants that generate savings, this cannot be viewed as revenue from customers and not and then having it be in precarious Financial Condition if you generate the savings related to this transformation that is ongoing there shouldnt be any financial issue and the lower the debt needs to be the better and thats what i will be keeping an ion. Your to have ago, luma took control of the administration. What they are doing to ensure luma improves its service and the performance metric . There is oversight on luma from so many quarters. I personally do oversight, my chief of staff does oversight. I have an assistant chief of staff on Energy Affairs doing it as well, and we have a p3 authority which is the administrator of the contract doing oversight as required by the contract. We have the legislature doing oversight, mayors doing oversight. If anything bears oversight all over the place. What we are doing is ensuring the luma improves its service and reduces the duration of the disruptions we are facing. Yields back. Thank you, mister chairman. Are you receiving me okay . Yes, thank you. As you know, we are in solidarity with the people of puerto rico. You mentioned additional time to remark on comments directed towards statehood in puerto rico and the Financial Condition of puerto rico, i would like to forward 3 minutes of my time, if Mister Velasquez is here, i would like to yield my time. Thank you for your courtesy. I will be brief. Part of a comments i heard deal with procedures that were followed in this committee while i wasnt a member of the committee so im not in a position to comment on that. Our resident commissioner commented on that and i know others could as well. But i have to reply to a couple statements that were made. The first thing i will say is most if not all territories that have become states were underperforming the states financially and economically in one of the reasons they aspired to become states was to do better for starters, secondly, all of them didnt have the vote for the president and Vice President , didnt have voting representation in congress, they were aspiring to become states because they wanted to have full democracy, to think you can put that aside just because you are facing a public debt issue or facing a recession in puerto rico misses the point altogether. The second thing i will say is theres been a lot of progress in terms of the public finances of puerto rico, two budgets including this one are clearly balanced by the Oversight Board we have including the payment of debt, the debt of the commonwealth of puerto rico has been restructured as well as principal Government Entities in puerto rico. We just had two fiscal years with economic growth, 2021, one growth coming after a 3 reduction in gnp, 202223, 4 growth, and this one is on the same track, tourism is booming, manufacturing is increasing consistently, we have the lowest Unemployment Rate in history, Labor Participation has increased by 5 . We have right now more people employed in port rico than ever since 2009 when puerto rico had half a million more People Living in port rico, the statistics are there. If anything what we are proving is the successful management of the Government Support rico and its economy and this is not only to the credit of my administration but the people of puerto rico and economic sectors served as well. Having said that we do not get the same deal in key federal programs like medicaid, medicare, ssi, and snap. No question that would help us economically more financially, which would be Something Else congress could do. We are not coming here to ask for special treatment. We are coming here to be treated the same as our fellow american citizens. We were treated the same in terms of the Pandemic Response and what and up happening is puerto rico was on top in terms of vaccination. We proved when you treat us equally we can do as well or better than anybody in the states. Thats why you always see us saying remember we are american citizens, proud american citizens and we want democracy and a fair deal. For the first time, mister chairman, theres still time running on my clock. If there is no further comment, mr. Soto would like the remaining time. I think the gentleman from guam. Great to see you speak so fashionably about something we feel strongly about. We have two historic 45 our hearings on the status of puerto rico followed by a historic confluence on allowing for statehood, along with options for independence, not to decolonize puerto rico, we are working to the last minute to ensure a floor vote on that legislation. Thank you for your leadership, and the leadership of representative guns dollars cologne. The gentle yields. You are recognized, mister abernathy. Thank you. Governor, i have been enjoying your testimony. I would like to continue the line of questioning concerning your request for the allocation of 5 billion in directed cbd gr funding for residential solar. Can you talk about how that money would be used to enhance puerto ricos Energy Resilience . This was the chairmans request along with several members of congress and i support it. When i add up what we are doing in terms of promoting solar Energy Systems in order rico, incentivizing distributed energy and microgrid, when you add it up, i am using it because it is my goal, roughly 2. 2 billion of cbd gr funding for that purpose which is cbd gr funding is used to install solar panels on all homes rebuilt in puerto rico newly constructed because of damage suffered by maria, caused by maria. Are used arpa funding to provide incentive systems to small and medium businesses in puerto rico to install solar panels and Battery Systems in their facilities. Less total bedlam that because this is where my concern lies. The cbdgr action plan for puerto rico Energy Systems, the plan is to great 159 microgrids within the island to increase the resiliency of the energy infrastructure. But residential solar to increase resiliency would have to have a much, much finer array of microgrids because 159, this is still a large area. I am asking about how this is going to increase resiliency because im concerned just putting a solar panel on a residence, if you are dependent on that connection to the utility, to prepa, cycling increase resiliency someone in what the plan is. Okay. Let me just say this. Loomer has provided for the interconnection of 33,000 new Solar Systems in puerto rico and they are interconnected. Theres technology that depending on who is the installed the system and who owns the system you can have like virtual power being generated in puerto rico added to the system in a systematic way. Thats good but it does not increase with the use. I believe it does in the sense that youre making households more selfsufficient. They have Battery Systems. They can go through thrl disaster without losing power if they handled the system adequately. But let me say more. Its my call, im devoting 500 million of funding to provide basically Solar Systems with batteries to roughly 25,000 low income households. Why am by supporting the 5 billion proposal of the chairman and others in congress for more Solar Systems . Because do quick math. If we are doing, if were reaching 25,000 households with 500 million worth of cbdgr made funding, if we get earmark funding at the two of 5 billion, you extrapolate it. Its ten times more so than your talk about 250,000 households. Let me reclaim my time. Let me ask you, please make sure that when you greet the action plan for the funding if you get it, that you create enough microgrids to make it so that it also increases resiliency. Thats the purpose of dr funding, right . Is supposed to theres of the pools of money for residential solar. Your point is well taken and i know part of what luma is doing is making sure that all these systems can be interdependent. They cant instead relying on the grid they can be on the corporate one thing were doing with industrial scale i yield back, mr. Chair. To be clear on the proposal, for solar and batteries, its the initial batteries where the resiliency comes from primarily. Thats an essential part of the proposal. Let me now turn to mr. Tonko. You have five minutes and thank you. Thank you, mr. Chairman, mr. Ranking member for holding the steering and mr. Governor thank you for joining us today. It was an honor to serve with you and its great to see you. It is so important that everyone has access to clean, affordable and reliable electricity to power our homes, our businesses, emergency Medical Centers, Water Treatment plants in so many other critical facilities. But Natural Disasters continue to severely damage puerto ricos centralized electric grid causing extended outages for the entire island. So mr. Governor, what are some of the Economic Impacts of an extended islandwide outage for people and businesses in puerto rico . Theres no question that when you have a power outage it has an impact on businesses in puerto rico. As i said before, it took about, you know, two weeks to restore 75 of our power after fiona. For two weeks im sure a lot of businesses were not operating. We saw in the month of september a downward movement in our gnp, and thats come in or economic index activity report, or activity indexes. And thats not surprising. That the way this federal emergency measure programs work is that they provide individual assistant. So by the month of october, already fema had this burst over six and a Million Dollars which to individuals, sba was assisting businesses. And so the economy i have no question, i have no doubt that in the month of october its recovering and then well continue our course. So the combination of a bigger response to recovering from the blackout and the fema assistant will ensure that this is not going to be like maria. Maria, it took puerto rico, back then it took prepa back then and it took fema back in 11 months toto restore 100 power of the item. This is night and day. One thing, mr. Tonko, that i didnt mention, i wanted to mention it because it is important. We do have industrial scale Renewable Energy projects ongoing as we speak. What we are considering doing is when you have a solar farm, lets make it grid in that area. Lets have that solar farm provide the power for the households and businesses in that area. And right now i mentioned there are 18 of those projects ongoing. You know, continue increasing. There are many things we can be doing. And by the way, the amount of private investment in those 18 projects that im talking about is about 1 billion. So its not a small amount. There are lots of things ongoing at the moment. Some of it is using fema funding, using cbdgr and made funding, but some of it is actually incentivizing the private sector to come in and add Renewable Energy to puerto rico, with the goal of producing 40 of our energy from renewable sources by 2025. By the way, this is working, i am confident that we could reach that goal by 2025 because there are a lot of projects in the pipeline, and if this 5 billion earmark happens, you have to add it all. You need to add solar Power Generation of households, businesses. You need to add, and my people will keep you this later on, d you need to add with this industrial scale renewable projects will be generating, and add, add it all, and hopefully reach the Renewable Energy portfolio standard that we have set in our goal. Thank you, governor. Im thrilled the department of energy recently awarded funding to General Electric in my district to develop and demonstrate the new Microgrid Technology in puerto rico. It would automate the process of leveraging power for one microgrid to restore power to a nearby microgrid, perhaps one serving a hospital or critically underserved community. This project will be researched and worked on in my district creating local jobs and innovation, demonstrated in puerto rico. It shows modernizing puerto ricos grid is essential for ensuring the health and safety of our fellow americans on the island. It also is mutual benefits for communities all over the u. S. So i look forward to seeing this and similar projects advance help bring about a clean and just future for all of puerto rico. Thank you. Without i yield back, mr. Chair. With that. Thank thank you, mr. Cha. Governor, i wouldnt want your job. Just saying. So under your debt restructurin restructuring, the debt was written down in january from 34 billion to 7. 4 billion, a big portion of it, and then the office of management and budget created a plan that puerto rico is supposed to be following. I miss apo with his plans. Im a lawyer. Ive entered into, i helped structure Debt Repayment programs for many, many different clients, and consistent performance under the plan is essential if the plan is going to work. Youre referring to a plan of adjustment . Im sorry. Was are you referring to the plan of a judgment that was confirmed by the federal court pgh yes or in reducing the value of all bonds by 16 in the Debt Service Payment by 32 . A judge confirmed the plan for general obligation l bonds reducing the debt from 34,000,000,000 to 7. 4 billion. Thats 4 billion. Thats what im referring to. Then as a condition of such reduction there was a plan, a certified cisco plan for the commonwealth of puerto rico. What im concerned about is the report that was used, issued in the fomb 2022 annual report where the board noted the puerto rican government has struggled court struggled with the implement the reforms and rg on this implementation in a timely manner r causing progress to be inconsistent and incomplete with any reforms either delayed or not occurring. And he goes on to talk about, we could talk about the implications of this as when it comes to trying to obtain money from fema, which the structure you for two a couple of times with the money is actually given up first and then reporting follows. I also have here a report fema effectively manage Disaster Case Management Program funds in hurting maria recovery services. They found fault the office of special general found fault fema operated. I have had occasion to work with United States because oregon which im from suffered dramatic fire lost several years ago. The way that we finally made it work fema can i say finally, thats not the right word. They work rapidly to help but we have systems in place in a state of oregon local systems, county systems, all kinds of systems that are set up to appropriately respond. As i read this report that does not appear to be the case for puerto rico. I said that without knowing. Im just like some conclusions from these reports. But why really would like you to address is the fomb is 2022 annual report where it says that puerto rican government has struggled with implement an reformss and reporting on this simple notation in a timely manner causing progress to be inconsistent, incomplete. White is at report say that . Can you explain why, i dont want an excuse. Want you to call up the cause of the delay. Well, actually the first thing that i was is some of these reforms of the fiscal plan provides for require legislation. And, but the Oversight Board doesnt have the power to impose legislation. So the fiscal plan, to the extent it requires legislation, it depends on the will of the legislature for that to happen or not. So thats the first question ill say. Some of the reforms call for administrative action. There have been undeniable progress in complying with board requirements. The transparent to use in puerto rico you have never seen before. Free Financial Statements audited Financial Statements have been published since the beginning of my tenure, and we will be uptodate by may of next year. All our Financial Statements, audited Financial Statements will be published. Thats an incredible progress for puerto rico. The board complained about legislation that recently was approved in puerto rico, providing specific vacation leave for private sector employees as well as some of the rights to our labor force, which actually we had before it was reformed several years ago. The board complaint, went to court. That case is this cache is pending. I suspect some of the board complaints relate to that particular legislation. But in terms of my administration, dealing with the board, wear have an effective relationship. We dont agree always and there are disagreements, but there has been an improvement. Thank you. Thank you, governor. I yield. I recognize the gentleman from chicago mr. Garcia, your recognize. Let me, for the representative speaks, uses his time,re we have both are going to be called pictures also an announcement that my sidele of the aisle will be, involves the speaker. And so at some point soon, maybe in 20 minutes or half an hour, im going to call the recess so that we can attend to those things, the speakers announcement and the votes that even called on the floor. This hearing isnt going fast, nor should it come so we would be back and will continue at that point with whatever is left. Left. But by now mr. Garcia your recognize. Thank you. Thanks, mr. Chairman for holding this critically important hearing to address the Political Economic andnd structural neglet that puerto rico faces as it tries to rebuild. Its been five years since Hurricane Maria devastated puerto rico. Reconstruction many projects were poorly managed and funding insufficient and funds have not been dispersed then of course there was another devastating storm in september with Hurricane Fiona it is important to look at this last five years. We have to apply those lessons. We have to build a power grid and we need to prioritize so with that in mind i like to ask the first question so in 2011 you created by executive order the reconstruction counsel was supposed to help the recommendation and the permits for moving in an efficient manner. There were two comprehensive report so let me ask what is the composition . I cannot tell you from the top of my head that is a representation and the Homebuilders Association and with the college her engineers and architects and mostly all of the entities that deal with the Construction Industry and they advise us regularly to the council i also created a reconstruction Government Committee currently chaired by my chief of staff that meets regularly to follow up on all reConstruction Projects. So there has been a significant change in the speed of disbursement since my administration came into office that is undeniable. This seems like a significant opportunity for Civil Society groups and the rebuilding process and it is essential for developing solutions for those that they are meant to serve what efforts have been made to include municipalities or civil groups for participation . I know and secretary of housing could expand we are using a considerable amount of funding for planning purposes and the ngos are assisting us but in terms of municipalities were going out of our way to provide funding and actually the proposal that we gave to fema with a 25 percent advance for the cost of reConstruction Projects initially was intended for the municipalities and 75 percent with fema funding come from municipalities but that wasnt happening because they did not have the cash flow. You have to understand that it works on reimbursement. We didnt have the cash flow to higher engineers and architects for the permitting of the projects. We convince fema to give the advance and it has been a total success now fema has allowed us to expand that agencies and ngos. That is making a difference. And we look forward to hearing from them. Thank you chair for allowing the opportunity to ask questions and for public service. The electric grid is so fragile every Natural Disaster seems to cause widespread Power Outages and the achilles heel of the electric grid is lack of redundancy. So what progress are you may gain toward rebuilding the grid with more distributed energy . First let me say we need the inadequate reserve in terms that we dont have at the moment because of plants feeling are in need of repair thats why what fema is doing now to increase Power Generation and is like giving us breathing room while we keep rebuilding the system it makes all the sense in the world so we are going at a expeditiously. We already have 1000megawatt renewable projects and we also have one is about to be launched with the capacity from renewable from solar sources along with 500 megawatts with Battery Storage it is industrial scale projects but also we are submitting or issuing a process in january to use one. 3 billion for micro grid distributed Energy Initiatives for critical facilities and the first one we will have it is a micro grid with Medical Center so we will continue doing that but having fema support on a shortterm basis as well as up to 50 percent advance of funding will make the difference. I heard there were issues with the advance payments and they were based on estimates and puerto rico has to pay the gap. That is a different issue. Yes, we are using section 428 of the stafford act. Fema agrees with the recipient of puerto rico as the estimate of the cost see you have to live with that estimate. Even if they are rendered obsolete by inflation . Period thats what were calling for congress to adjust the fix cost estimates due to the increase of materials and supply chain disruption. So fema reading reimbursement or advance Payment Program are sufficiently mindful of the fiscal needs of puerto rico. We still need to improve them. One pending item is the flexibility that fema should have with the fix cost estimates that has been agreed to a couple of years ago. When inflation is not what we were facing and with that disruption of supply chain what the pandemic and thats why i have asked the committee. When i took a tour with you i noticed most of the housing i saw was informally constructed so how do we avoid construction and the same fragile form . Will they be built with greater resilience . Fema is funding a Public Affairs campaign and the Public Education campaign encouraging people to build up to code and comply with our construction code. Is there enough funding for that quick. We got a decent amount of funding to do that at least 50 percent of the households are not code compliant and fema is trying to be flexible to provide assistance to owners of those households. Thank you for being with us. The plan to expand or repair or remodel the schools one of the things i found streaking this year there were many schools that there are many schools that of not been rebuilt or repaired since they were damaged back in maria, 2017. Is there a lack of progress, are what do you see for that 500 schools . A lot of progress in fixing structural issues in our schools. We have some earthquakes as you may recall in early 2020, and one school totally collapsed because of the sign of its structural columns, to structural design. Weve been using fema funding up to comments close to 600 schools already that had those structural issues. We have 2. 2 billion of fema funding to either repair or rebuild schools, or build new schools. And that is an ongoing project. The working capital advance, the department of education is requested, my recollections are spirit, a bit more than 40 million in this, in the form of a working capital advance which will help it launch higher, again, engineers, architects for the design and permitting of the schools. Thats an ongoing project. Let me ask you one of the question, governor. Pathway, a timeline to where its not just a particular interest of mine, its something i heard over and over in puerto rico about the schools and their safety and their availability. I think that would be of interest i can supplement my testimony by giving you a status report on the department of education and infrastructure projects. Thats what im getting at. Luma, renegotiations, looking at the contract. And one of the things that is noticeable, perhaps you could correct me if im wrong, is that the benchmarks that are set that have to be attained by the private contractor, you know, for additional money, thats the target, those of the benchmarks one of the things that to me is a glaring is theres no consequences for not meeting certain benchmarks. There are consequences. In the contract that exist. Was well, whats happening is this, the 15 Year Contract provides a payment methodology that includes either bonuses or penalties, depending on compliance with the metrics that the Energy Bureau will be setting. The current supplemental agreement does not, and the reason is because we have this bankruptcy process ongoing. Because of the uncertainty involved in having a bankruptcy process for prepa is the parties agreed, meaning the p3 authority, prepa and luma, age to enter into the supplemental agreement that simply provide luma a fixed fee for its services. And the Energy Bureau, along with the p3 authority, monitor luma performance and periodic report the energy does, how luminously in terms of the metrics and the metrics that so far thats not confusion though, governor. I think we need to clarify that. Because the opportunity to make some corrections, although many people cry for the end of luma as a provider, and those voices are not only on the island, they are also here in congress. Its providing that information where our reading of it or at least the staff and my reading of it, the downside was there was no consequence. They are wrong. If they are wrong you can provide it. Well keep repeating that. Loom is represented at this hearing so you can ask them directly, and i am sure that we can also supplement my testimony to give you the appreciated. In terms of the requirements on luma and with that we are overseeing luma. Thank you, governor. Iq for your testimony, and were going to call her recess so that those of us that are interested in hearing from the speaker will do so and take the vote and then come back and begin with the second panel. I apologize for the delay but that was inevitable given the structure of the day and all the stuff that is before us. But governor, again thank you for your time, and i think the attempts of sony members of this committee that also has to do with the time that it has taken. I appreciate that. There been a lot of interest in this topic and a really appreciate them on behalf of the people of puerto rico. And to your credit and my credit, we can count on time. Appreciate it. [laughing] [inaudible conversations] [inaudible conversations] [inaudible conversations]