good morning everyone. the committee will come to order. we are here this morning to review on going recovery efforts in puerto rico and the u.s. virgin islands in the wake of hurricanes irma and maria, as well as efforts to rebuild it electric grids on those islands in a smarter and hopefully a more resilient manner. we're over two months removed from when hurricane irma devastated st. thomas and john on september 6th and it's been nearly 60 days since hurricane maria hit st. croix and puerto rico. just a little over a week ago that senators cassdy, franken and i along with senator carper who was just here and senator harris as well as some of our house colleagues visited both st. thomas and puerto rico. i want to thank both governors. for your hospitality. the time you gave us during that visit. it was incredibly important i think for all of us to see to be on it ground and to be hearing directly from you and those that you are working with. i know that some other members of our committee have travelled to puerto rico previously and i thank them for that as well. what i think we certainly observed is the destruction is still very, very evident. when you consider the totalality of it recovery work that still needs to be done i think in a word it can be said that it's overwhelming. it's one of those where do you even begin moments and i think we certainly felt that in puerto rico, we felt that in usvi. i mentioned when we were there in puerto rico that i've seen my share of natural disasters but really nothing like this, nothing like the scale that you see when you see an entire island that has been devastated as we had an opportunity to be up in the air and fly over some of the impacted areas in puerto rico, it seemed like we never left an area that had not been not only hit but devastated in terms of the impact we've put some posters up on the dis here. over to the -- over to my left here is a solar field that we flew over in puerto rico. you can see closer to the front the panels that remained in tact. and while the resolution isn't that good, the impact to the raise in the back, it just looked like somebody smashed through them. in front of senator cantwell here are solar panels afield that we saw when we were in puerto rico driving by, but again seeing the impact there. right below senator cortez is a picture of some apartments that we drove by in st. thomas. where the buildings had been just blasted through from one side to the other. so a clean sweep through these apartment buildings. it was just extraordinary. below senator hinrich, you can see some of the devastation again in puerto rico. the blue tarps are certainly coming to be a symbol of the devastation that we see post hurricane, not just here in the caribbean, but certainly as we've seen the devastation following harvey in houston and in flflorida, but i think you c see just how these properties have been impacted in a way and in a manner that is just again devastating. below senator franken is an area that we toured where the road had been taken out by land slide. not only did we see this particular scene but another area where the only access to some 200 roads had been cut off by horrible land slides stranding homes on the other side. we had the opportunity to visit with another woman whose home was on the other side and she had not been able to visit her home. since the urhad cane had happened. a very, very touching story, one that i think all of us will remember for a long time. but i think we also recognized while we were in puerto rico looking at the damage from the land slides and appreciating that particularly in the interior where you have such mountainous areas that this is still the rainy season and with the number of trees that have been taken down, that slope stability during the rainy months is very uncertain and so the damage that we're seeing today may not be the it damage we're daeling with in days and weeks from now knowing that more can happen. again very, very, very sobering. and when you look at this and realize that these pictures were taken just last week, it is clear evidence that there is much, much, much to do. but as daunting as the recovery effort is, i think it's matched by the spirit of those who lived on the islands. and we saw that, we felt that. i have -- i don't know whether i'm doing promoting here or not but while we were over in puerto rico, we were reminded that there is a resiliency in the people, members have been given a can of soda this morning that was manufactured and bottled in puerto rico with the hashtag that says where's puerto rico, which is puerto rico strong. so i thought that was pretty cool that even in the mitdest of all this, they were coming together. they were working to remind each of us of the resiliency of the people of puerto rico, people of the u.s. virgin islands that this is their home and to reif had force that we need to do what we can to epihad rebuild these islands. today's hearing will also look at ways to make the electric grid more resilient to future storms. i think we all agree it makes no sense to rebuild these grids to prestorm conditions as the stafford act currently requires. puerto rico's electric grid wassawas already an quated befeore the storm hit. so why would we rebuild it to that standard? i've talked to bodies on the other side of the aisle. congress needs to provide greater flexibility in how stafford funds can be used. i'm going to help implement that change. we also know more urhad canes will impact the islands. we're going to see poles that will break, roads and bridges that will wash out. residents will face flooding and mud slide. communities with ilbe disconnected from each other and a central grid and some of that is the reality of living on an island in a tropical location. but again the questions that we need to be probing are what can we do about it now? for right now, right now restoring electricity is the immediate priority. it's been out for far too long. and it is harming the health of both local residents and their economy. and when i say health had, i think about things like mental health. you tik about being without power for 60 days plus. think about what that means. we see pictures of kids who are trying to do their homework, using the flash light of their cell phones. but in puerto rico where we were schools were not open. schools were not open and have not been open for two months now. think about what happens just from an educational perspective. so when we talk about help, i think we need to be more expansive in our understanding of what the impact to these islands has been. these conditions are awful, they're tragic but they're also an opportunity for us to be working together to rebuild it grids in a smarter manner, whether bearing the lines where possible, direct current verses alternative, some other manner, i think we need to be looking at this going forward with a few things in mind. making the grid more resilient to future weather events and in case of damage from future storm, bringing that time frame for repair on the grid on par to what we see here in the united states. i think we recognize that anyone of the 50 states here, whether you are on the mainland or, like hawaii or alaska apart from the continental united states, nowhere would we accept the fact that the people, the residents have been without power for two months, particularly the numbers of people that we're talking about. but also we need to be working to bring down the overall cost of electricity, certainly compared to prestorm prices. we're fortunate to be joined by vaer distinguished panel this morning and we will have an equally distinguished panel as this one concludes. but these folks are here today to epihad us better understand the conditions on the ground, what more needs to be done at the federal level and what a future electric grid could be like like. i turn to senator cantwell for her opening remarks and look forward to a very informative discussion. >> thank you madam chair, and thank you for scheduling this imi important hearing. i'd like to thank all our distinguished witnesses for their thoughts today. it's been 56 days since maria struck and both the virgin islands and puerto rico are struggling with even the most basic needs providing drinking water and delivering adequate health care. this is onacceptable. the united states is a strong nation, needs to take care of its citizens and approximately 3.4 million united states citizens and over 100,000 united states citizens face challenges as we speak. the federal government needs to do more and it needs to plan in advance. inh ineckwtable treatment under medicaid and the tax code have dramatically harmed these economies. as a result they have suffered from economic contractions in recent years. in response to puerto rico's debt crisis, congress pazzed legislation from 2016. to be clear, i did not support that legislation. one of the reasons why is because it favored more of the interests of the hedge fund share holders than the taxpayers. but by far the most far reaching impact is to our electricity grid and this administration which has been responsible for restoring the electricity grid along with local partners needs to do more for the people of puerto rico. i welcome mr. walker here today, i supported your nomination and you and i'm sure you are it right man to epihad but youicide hear loud and clear that we need do more. the white fish contract in puerto rico raised particular concerns. it homeland security reviewing the matter and according to a wall street journal report the fbi is also investigating. the florida workers contracted by whitefish were paid $42 on an hour, lineman 63 and yet whitefish billed the government of utility $319 an hour. even if that figure is abnormally high because it ifcluded absorbitant charges for room and board, why would a contract specify a separate charge for room and board? it welfare of the puerto rico people to rebuild the island is my number one concern but i will not stop making sure that the u.s. taxes payer is not gouged in this process. let's be very clear about this. the reason why my state has many storms and many natural disasters, the reason why you have mutual aid contracts is to rebuild at cost. that is what a mutual aid contract is. rebuilding at cost. so the notion that someone comes in there to gouge the puerto rican government and the u.s. taxpayer charging them an exorbitant rate and writing a contract so it can't be reviewed properly was a great ifjustice to the u.s. taxpayer. when you look at how the situation occurred, we must understand it federal government here also feeds change its process. i have seen this time and time aagain in my state whether it's fire or a mud slide or failed communication systems can't even be restored to communicate to the public because someone is saying who will pay for this. so in the gap puerto rico made decision to go with an entity that gouged the u.s. taxpayers. it should have been clear from the very beginning that fema and the u.s. government would pay on those contracts and it should have been done with mutual aid at cost. so we're going to get to the bottom of this. if it takes a long time. why? because we never want to see this happen again. we do not want be to a country where interests of the private sector are patrolling the u.s. economy, looking for a disaster and then saying i'm going to go in there and capitalize on it. people should read and understand case law. case law on price gouging was this very instance. in a blizzard in the northeast someone came in and tried to charge more for snow blowers. why? because they knew people to buy them. so we're not going to put up with this kind of behavior in the united states of america. when people are in a crisis and a disaster, the u.s. government have had responded and said they would be there to restore it utility grid and do it at cost and thereby get the support. so we'll have lots of time for questions. there is a fundamental problem with removing the authority of the grid from it people and handing it over to an unelected oversight board. this was brought up in a court case yesterday. the mission is to achieve fiscal responsibility and access capitol markets which means playing nice with bond holders. this is not our priority, which is getting the lights back on and preventing a continuing humanitarian crisis. so those are the things we must understand as this debate continues. only a strong independent regulator can assure consumers pay low prices, they move towards a sustainable business model and that will be a very long process. i know our colleagues want to talk about how we modernize this for the future. but in the meantime i'm going to make sure the u.s. taxpayer is well protected and we do anything we can to flatten any kind of process that exists between bureaucracy and the government of puerto rico to make sure they're not having to pay 20 questions about financial assistance and aid. the answer should be yes and we should be doing it at cost. i look forward to hearing from our witnesses. >> thank you, senator cantwell. our first panel this morning will be led off by the governor of puerto rico. the honorable ricardo nuvar ez. he will be followed by the governor of the u.s. virgin islands, the honorable kenneth mack, we welcome you. mr. bruce walker is the assistant secretary for it office of electricity, delivery and inhad aerj reliability at the u.s. department energy. i will note he as been on the job here for about a month, i believe and as soon as he was sworn in, he was sent to puerto rico or he volunteered to go to port reek oo and has been there much of the time and on the ground. so i think we'll have a great deal to share with us this morning. and we're also joined by major general donald e. jackson jr. the deputy commanding civil for it u.s. army core of engineer that has been tasked to address the grid system there. in puerto rico. so gentleman, we welcome you to the committee. observe govern governors, we certainly appreciate that you have travelled to be with us this morning and appreciate your time. >> thank you, chairman markowski and ranking member cantwell. i would also like to give special thanks to senator mar kousky and all the members of both house and senate who have taken the time to come to puerto rico and bare witness to the island. it is impossible to describe the fury and viance to the people w did not experience. causing the full failure of the power grid, major damage to our water systems. airports rendered unuseable. roads and bridges were washed away and virtually all communications systems were shut down. i was there when we to rescue 2,000 people from roof tops when flooding reached massive proportions several hours after the hurricane hit. i saw mothers carrying their infa infants. i had to drive several hours northwest and through the mountainous regions to warn folks their dams could collapse because there's no other way to communica communicate. no phones, no radio, no water, no power. no business is open, lit logical access to roads. i flew over parts of puerto rico that look like a category 5 hurricane went through it. others looked like a bomb was dropped. i personally took food, water and medicine to people who had lost their homes. not with standing these challenges, we are resilient and making progress. we are moving from life sustainment to the recovery. water restoration is now at 90%. telecommunications is at 75%. almost all supermarkets and gas stations are opened. i called for an aggressive milestone to make sure we could do everything humanly possible to power puerto rico as quickly as possible and tomorrow we will have met our second milestone of restoring 50% of the energy grid by november 15th. 59 of the 60 -- 58 of the 68 hospitals are connected to the grid and we have started to stead a elopen schools. now we have 839 that are open. it is important to note that this event has no parallel in american modern history. with risk models categorizing this as a storm that caused 90 to 1$100 billion in damages. this was a total catastrophe. we have twin storms blasted through another state. a catastrophe would have inhad sued as well. i became governor with the challenging task of misplaced priorities and sufficient leadership. as you're aware long before the hurricane season had started in puerto rico and its people been battered by demographic challenges, i've worked tirelessly since taking office just 10 months ago embarking on an aggressive agenda. within six months, my administration has obtained it approval of the 10-year fiscal plan. although we've had our differences with it board, we have worked together. in addition we also implemented an aggressive array of policies for economic and social growth including a gold standard -- pensions reform and are currently working on a new government down sizing model procurement, reform and the transformation of the electric utility. even during the recovery and restoration process, we are focussed on developing a plan for future electric energy in puerto rico. we're working with members of the governing board to bring together top minds and provide best in class thinking on the future. and evaluating are options including public or private ownership, or a combination for the long term. we aim to revamp completely the delivery of electric energy in puerto rico. this includes aggressively incorporating alternative energy sources, creating frameworks for distributed energy sources, virtual power plants, and developing a robust regulatory framework that creates the right market and competitive signals to insure it's delivered reliably and at a sustainable -- i call on congress to approve an emergency supplemental registration that provides equal registration compared to what any state would have experienced. attached to my written testimony i have provided an extensive analysis and documentation of the devastation of the hurricanes and the federal resources necessary to build a more resilient puerto rico. worked along with third-party groups and organizations. in doing this i am had committed -- i commit to you today that i will lead the most transparent disaster reconstruction in american history. towards that end i have issued an executive order for the office which has been tasked with the suring full accountability for all state and federal funds directed towards the island reconstruction. the foster of accountability. we will create a recovery portal that will not only track the status of are ecovery, burt provide information to the public about how and where the funds have been used. this great country of ours has always prided itself on leadership, moral values and principals. it has also responded to extraordinary times. the whole world is watching. it is time to show we mean what we say. it's almost one and only one. it is time for our homeland to show we can walk the talk. as governor of puerto rico but more so as a proud u.s. citizen of this great country, i ask you to once again rise to the call as you have done so many times before. thank you, god bless you, god bless puerto rico and god bless america. >> thank you, governor. governor mack, welcome to the committee. >> members of the committee, thank you for the opportunity to discuss the damage done to the united states virgin islands suffered from two category 5 hurricanes. just 12 days apart. let me take the opportunity to thank you, madam chair and members of the committee and congress for visiting it u.s. virgin island. i waunt to thank it vice president for coming and seeing first hand the devastation in our territory and speaking with our citizens. i'd like the acknowledge in the audience today members of my legislature that are here led by the president, myron jackson and members of the cabinet as wel. but first and foremost on behalf of the more than 100 thousand resilient americans living in the united states virgin islands, let me convey our heart felt gratitude and appreciation for the concern so many fellow americans have shown to us during this difficult time. from the great leadership and support of our president to you, madam chair and the many members of the house and senate who came to see the devastation first hand to better understand the conditions we are living in, we thank you. we also thank fema for the unwaving support of our ongoing critical needs in the virgin islands and thank our ko kordinating officer. the needs of the citizens in a disaster than the united states of america. is the response all was perfect? no. but neither is the rediction of the outcome of a natural disaster. to our country, to our fellow citizens, to our national government the people of the virgin islands say thank you. covers i didn't travel here today to only express gratitude. i came here before you to personally ask for your help and your support in recovering. these storms brought 185 mile-per-hour winds that ripped leaves from the trees. pulling up century-old trees by their roots and eaturning our green hill sides black. utility polls snapped like match sticks and over 400 boats sunk in our harbor. nine schools, our two main hospitals and related health facilities, fire stations and police stations. were so badly damaged they had to be condemned. it delivery of government services. simple things we normally take frogranted. running water, cell phone services, electricity. a hot meal, remain unavailable to many of our citizens. more than 15,000 homes were damaged or destroyed. and virtually all of our power distribution was wiped out. power remains limited with power connections across the virgin islands at a mere 27%. on the island of st. john, our residents only started seeing power for it first time last week. can you imagine a community here on the mainland going without power for over six weeks? in addition to the physical destruction it's gren to a near halt, those that have reopened have reopened with significantly reduced services. and unsustainable cash shortfalls that we will experience now and if to the future. we have estimated that economic losses and tourism stand at more than $1.7 billion over the next three years. damage to commercial facilities stand at almost $1 billion. our recovery from these islands will take time and it will begin with a full understanding of the damages caused. we estimate uninsured hurricanef had related damages to exceed 7 $1/2 billion dollars. i have requested that amount in federal disaster assistance to address our most essential needs to return to normalcy. virgin islanders are resilient but we must do more to make our islands resilient. unless you want to see me come back here after the next major hurricane devastation of amer a america's paradise, we must build it back stronger and more sustainable than before. we must build it back stronger and more resilient to protect our citizens and the investment and consider our power distribution network. while we are optimistic that will be nearly fully restored by christmas but this. it's paying to rebuild this power distribution system in the virgin islands. we've already taken basic steps to improve the resiliency of the grid and to build it back using things like composite polls that can better with stand hurricane-force winds but we must go further. with your help, we plan to bury power lines on the primary and secondary road systems throughout the territory. and invest in a microgrid system that will add renewable generation capacity like solar and wind energy. it's not just power lines we need to approach differently. ermau and maria completely devastated our critical health care infrastructure, destroying our two main hospitals and affiliated health care facilities. today critical care is unavailable in the virgin islands. a critically ill patient in the u.s. virgin islands cannot receive care there. critical patients and persons requiring dialysis must be flown to the u.s. mainland for care. we were doing that after irma in puerto rico. butted now that our neighbor has been impacted, patients are now flown to atlanta, texas and florida. the funds we're seeking will help rebuild two main hospitals on st. croix, helping the u.s. virgin islands recover will require a serious look at our health care system as it relates to federal law and policy. health care funding in the virgin islands was under great stress, even before the two hurricanes. unequal federal medicaid funding, primarily due to arbitrary matching rate has imposed a severe hardship on the government finances. the virgin islands is physically disadvantaged because of the centers of medicare and medicaid services using decades old bench marks. our hospitals fee schedules are based on a 1989 fee schedule. so reimbursing of these publicly owned hospitals caused great distress to the finances of the government of the virgin islands. >> governor, i'm going to ask you to start wrapping here. thank you. >> regarding public safety we have lost our fire stations, police stations, emergency operation centers for disasters on st. croix. universities have been heavily damaged. while we apreciate efforts of fema, these prevent home from further damage. but it's not epihadding folks in homes without frames and without rules. so with each rainfall, families are being harmed. our citizens, american citizens have suffered terrible losses, dislocation and distress in the wake of these storms. vurmgen islanders understand and accept our responsibility. but we cannot do it alone. we cannot squander this opportunity to rebuild a better and stronger more resilient virgin islands to rebuild it quickly. if we do, we will only compound the suffering that so many of our citizens have endured. with your support, that will not happen. thank you for listening and for supporting your fellow american citizens in the u.s. virgin islands. >> thank you and know that your full statement along with everyone will be included as part of the record. >> i'd like to thank chairman, ranking member and the members of this committee for moving me favorably and expediting the conformation so i may go to puerto rico and the virgin islands to get a first hand account of devastation that was done. with permission of the committee i'd like t i'd like to entinter testimony. number one, it successes that i realized in my attending the virgin islands as well as puerto rico, the challenges that were faced and the opportunities we have go forward and speaking specifically to a number of the things that both governors mentioned, there are opportunities and we have an opportunity to take advantage of those. successes. the leadership provided boo thitwo governors sitting next to me was fantastic and the resilience and the heart felt strength of the citizens of both virgin islands and puerto rico was amazing. the calm on the island was outstanding. the key humanitarian challenges are continuing to be met with the leadership provided by the governors and i'd like to pointed out there were two critical components with the restoration that i think are worth noting. number one, prepa, with limited crews i've had made an early decision to have to tie the southern portion to the northern portion where the load is and in doing so they made a key decision to construct the 230 line from the south, pringing it up to the san juan area, the bay station. from down here, wrapping up where the line is, up here, all the way to here. what was important about that is that one decision and the efforts made by prepa with limited staffing enabled the power to be distributed to where the load was and in conjunction with the other big decision, which is the next slide the army corp, installed generators and that in conjunction of the rebuild of the 230 line enabled power for the northern portion. those two efforts were monumental given the facts and circumstances. the installation of this generator with the letting of the contract and the if had had stall and i was at palasae co. we fantastic support from prepa in coordinating it it, particularly with it coordination with the army corp. lastly, the work of the federal coordinating officers in the virgin islands and the governor mentioned bill vogel and his deputy haas and mike burn and his deputy the coordination that was set forth by fema was outstanding. in an effort to drive and work with it leadership provided by the two governors to my right. on the challenges i think you can see through a number of these pictures, the mountainous terrain was a key component where there was stress in trying to rebuild the transition system. lack of generation in the north necessitated the work be to done on the system. the logistics highly successful in trying to mobilize all it things necessary of equipment people and puhad aterial to get down for had and challenges to work through. it amount of fiber-optics on the island were a challenge particularly as they increased the wind sheer and therefore the damage to the poles and the water infultration to 18 substations, three of which were inundated to the point where they were not able to be energized. that leads me to my last component. very high level we've already mobilized the grid consorshm to look at work that has been previously done by labs and oakridge and looking specifically at things like modern relay, improved sensing capabilities. hardened control devices. secondly microgrid opportunities. we've already looked at and started the process to if stall 200 locations, representing 11 mega wats of power on puerto ri rico. that's where we had provided supplies. and we're doing investigation on now to add additioning microgrid opportunities and we'll also begin look at them in the virgin islands as well. the 18 substations, inundated, there's a flood mitigation program called 2414. we're looking at that for the reconstruction of the 18 substation. in conjunction we're utilizing noah to identify where we can put solar and identify -- take the mountains and use them as shieldings for the design and it slosh modeling for the virgin islands as well as puerto rico. so with we have to replace substations, we don't put them in an yare cruthat would be inundated going forward. also we have the opportunity with the high penetration to develop the black net and utalize it in the discussion here with this committee on the cyber security, real opportunity because of the density. integration of other generation renewable, that's a key component and add a level of resiliency because it wouldn't be able to be built from the south to the north and inevitably we'll see more hurricanes and lastly there are basic structural components we have the opportunity to do. i have folks at the bonneville power and wa, a do investigation on a tower constructions because the dead end towers on the transmission system, fundamentally were standing in the aisle. the others were more damaged and mainly because these towers are guide or anchored differently than the other towers. there's structural improvements available to us and the mod fwkz of the fiber-optic something we'll have an opportunity to take a look at. thank you for the opportunity to convey my thoughts and look forward to your questions. >> general jackson. >> ranking member cantwell. thanks for the opportunity to testify today. it core conducts two basic authorities. stafford act and law 8499. we support fema under the national response framework for emergency support function three. esf 3 provides temporary emergency power, debris management, if had frustructure can assessment, facility restoration and temporary housing. under 8499 through coordination and training with local, state and federal partners assisting them with advanced measures and preparing damage including eligible noneligible structures to prestorm conditions. they're mobilized across the command to assist local offices to respond to this event. the core has more than 50 specially trained teams that perform the wide range of missions that i just described. the corp can be kwiktly activ e activated for debris removal and temporary roofing. this year they have supported fema in support of multiple events if hadcluncluding her hu irma and maria. and hurricane irma in florida and in the aftermath of dev starting wild fires in california. the corp has received 59 fema assignments in puerto rico and the u.s. virgin islands. currently it core has over 1900 personnel in the region. as of this morning they have completed over 765 temporary generator insulations in the caribbean. this if thecludes 270 assessments and 176 generator installations puerto rico. under fema authority we're also assisting puerto rico with 1en had 50 critical, noncritical generators across it island. we have over 550 soldiers, and contractors dedicated to temporary power alone in puerto rico. they completed 12 thousand roofing installations and 8700 in puerto rico. requiring additional material construction report and added capacity and will continue to see improvement in both locations. corp debris subject matter are providing support to the u.s. virgin islands. we're working to remove debris and over 2 million cubic yards of debris -- we working with the oceanianic and local authorities to open navigation channels critical restoring commerce to reach effected communities. in puerto rico corp dam and levy teams inspected 14 levies, working closely with the puerto rico electric power authority to stabilize a spillway at the dam. they helped place emergency pumps to further reduce water levels, yet restore flow to a critical treatment plan that supports the needs of over 1 hundred had,000 people. the core was given under stafford act authority to assist in emergency repairs to the grid itself. the corp has established a general officef had led task force to over see work and provide technical assistance. the department energy has embedded experts in our team. unlike with our esf 3 mission, they do not have to be awarded contracts but has relied to compet tvlly build capacity to meet requirements. since receiving the mission assignment, ta have installed a power plant to stabilize the grid in san juan. and includes currently 3,000 miles of conductor wire and we contracted for 200 additional line repair crews flowing into the the island to assist the ongoing oefrts by prepa. and a power plant that will be to assist the facility. despite our heavy if had volvement in these response and recovery efforts. we also remain ready and poised to participate in future events. this concludes my testimony. thank you. >> thank you major general. we'll now have an opportunity for five-minute rounds of questioning. governors, one of the things that impressed me when we were in u.s. virgin islands, you relaid or shared with me that this is now your fifth hurricane. you have a little bit of experience dealing with disasters and you indicated that in anticipation of hurricane irma coming your way, you effectively had teed things up so in the event you were hit had, which of course you were, you could immediately move forward to basically push send with the request for mutual aid, indicated that alowed you to move quickly to remove debris and really get to work in an yare cruthat been incredibly devastated. we're looking at this hearing to not only learn about what we have done right where we have stumbled in this effort and also how to move forward from that but that's one thing that as i look at the two islands that were impacted both in considerable ways and in ported rico. mutual aid was not implemented immediately. in fact, i heard many times as we were traveling there that in fact the real recovery, the real recovery didn't begin until a month later. effectively october 30th when the mutual aid switch was flipped and the effort really began. governor, can you share with the committee why mutual aid was not advanced immediately. >> of course. thank you again for the opportunity. let me just take you initially through the time frame that was the two twin storms. we first got hit with irma at that juncture, for were some requests for information. for several contractors to come to puerto rico to attend to some of the challenges we had after irma. that of course was looking forward to just restarting without the energy grid without looking at the moment where we would have another storm. >> just so i'm clear did you not believe after irma that it damage was sufficient to have invoked mutual aid that you could handle that on your own? >> the results are there. the power authority actually picked up from 25% energy from after the storm. so there was work in progress and an alternative mechanisms to bring more support to the island. in comes maria and i just have to define what were the it first days immediately after maria. first of all we have no knowledge of the vast damage that was done in puerto rico because we have no communications. i mean i know it's hard to put yourself in that situation but puerto rico is relatively small island but it is -- to travel it typically takes a couple of hours. at that point we had had no communications, no radio communications, which we expected to have. at that point all of the roads were basically blocked. so our efforts immediately after the storm where to asesz the sif situation, get contact, establish logistics and going through a life sustainment phase. right after the storm as i mentioned in my initial statement emergencies ensued. we literally had to go -- i to take the position that i had to mobilize police officers from wherever they were, they were at risk of drowning and this happened several times because more water came through it as well. after came also the devastation and the potential announcement for which we had no communications with the people of that township so i to go in a car in a route that takes about an hour 1/2, it takes four hours. i went there so we could mourn it local authorities, the mayors of what was going on. >> i'm going to interrupt only because i'm out of time but it begs the question then obviously great deal of immediate urgency to save human life but in retrospect, would it have not been wiser to do as we saw in the u.s. virgin islands just push send and request that mutual aid? >> yes, we spoke about this, prepa will be happy to answer all the components and decision making that went for to that. but i want toed a add an element. when we were making that decision about bringing some of the additional assets to puerto rico, we had the offer from the corp of engineer that would allow us to restore the energy grid fairly quickly as was stated to us initially and that we didn't have to have a cost sharing to do so. right now as you know puerto rico is in a fiscal predicament that we had little liquidity to push forward. so having those two alternatives, we chose under the understanding that things were going pick up quickly, that energy grid was going to be restored, we chose the alternative that both fema and the core of engineer proposed which is let's do it through the corp and in collaboration with prepa so we can get going. >> we all have a lot of questions here. i'm going to go -- >> thank you, madam chair. you're right about that. i want to make sure we're working on solving the problems. is everything working seamlessly now as it relates to the army corp and to prepa and everything that needs to happen or do we still need streamlining? >> first of all it is public record i wasn't satisfied with the original deployment of the corp of engineer. i'm established again. we were under the impression this was going to start immediately. that we were at a 45-day time frame, otherwise of course we would have looked for other alternatives. having said that and thanks to several meetings we've had, now we've had three daily meetings on what's going on with it energy grid that includes prepa, the doe, the core of engineer. some of the stake holders so that we can push forward and meet the aggressive standard that we for puerto rico. so while again as i said in the onset i was not satisfied and i voiced it, i'm hopeful that the new mechanism can allow us to get to our objectives and what i ask the senate is covers to keep on serving, keep hearing us out and as it pertains to the past week, there has win an increase, a phenomenal increase in communication, more deployment of personnel to puerto rico and as i 125stated on our initial statement, our objective to get 50% by november 15th looks like we're right on target. >> thanks, governor. mr. walker, what do you do about this issue with it bond holders having a lead against prepa? so here we are trying to make this work from perspective of restoring the grid and we have a bond holder lean. so what are you going to do to make sure taxpayer dollars areabout just going to wall street instead of the grid? >> during my time in puerto rico that was a question that came up and working with fema and fema lawyers, they've worked through mechanisms that they feel confident the investments being made under the emergency restoration will not be attachable as they're actually grants. so the federal government, through fema, it's a better question to be answered by fema expert. but i had learned as much as i could in puerto rico. so i asked that question specifically when i was down there. there was obviously concern with the investment being made. but they believe that money will be protected. >> so do you believe that we need further structure by others in integration with prepa? because yesterday i'm pretty sure those bond holders were in court trying to wrangle this organization away from the government and into their pocket books. the judge denied that but i guarantee you this won't be the end to the situation. if you're saying today prepa has the full oversight it needs or no doe -- >> i think if congress appropriates money for permanent work that fema will have to make decisions with regard and congress will have to make decisions with regard to who's responsible for it. if congress appropriates money for permanent restoration. >> but do you believe prepa needs any other oversight by you? >> the emergency restoration is uniquely qualified. it's their system to restore the system and get it up and running. >> and you're a person who spent much of your time in this sector? >> i spent my if tire life there. and i work very closely with ricardo, on the next panel and prepa personnel in their control staff restoring the system and as i earlier noted, there were some very significant challenges making decisions to restore it system. prepa rose to the chalange and made decisions and started the work and as the governor noted, got back to almost 50% of the system. >> so you're standing by prepa in this and moving forward? >> i. >> and you will work with us on this large r issue of making sure -- this is not the last disaster we're going to see and i think we need work very hard to make sure someone that took advantage of the gap that existed between nautd having this full fema commitment and the fact that prepa made a decision then, look, we had our constituents gouged during the inron crisis. so utilities who had a must-serve requirement signed up for those exorbitant rates. it took us years to get out of it. i want to make sure we're stopping this kind of behavior and that we work across. and we're going to see many more disasters. and we're not going to be involved in this price gouging. by someone trying to take advantage of a disaster. >> senator cassidy. >> i'll return to the second panel with prepa. but my questions all relate to it. do you know how much it will cost to upgrade the -- senator franken and i have had had this conversation. what could you do in puerto rico and by the way, thank you for your hospitality. the idea is you could have a distributed energy system on the back side to when the sun doesn't shine and i was struck we went to a tesla facility but it rained every day since it went out. and they were running the generator fully constantly, which shows the limitation of the energy. important, useful, bought little limit said. needing back up. so first can i ask i know that there is already l and, g on but to what degree can your kurntd fossil facility serve as a back up? governor, mr. walker, you all have that answer. >> i can wait for it next panel. >> and do we know how much it would cost to upgrade that palaseca? >> in the long term or short term? >> in the long term. >> in the long term again i would pass that question to the prepa director. >> sounds great. and can i ask it progress right now of mr. walker you showed the nice pictures of those long-term transmission lines across the mounltens. where are we? 90%? 80%? >> both the 230 lines up to the middle island are on schedule to be complete by the end of november. >> okay. and what percent of the island is power backed? >> 49%. >> and san juan it looked pretty good, rel tvlly speaking but other community cans less so. >> right. rilt it's been continuously flowing. there's been ups and downs. we've had significant rain events but right now as we stated we had an objective of getting to 50% by midnovember and we're poised to achieve that. >> and general, i think it was a conversation with you. my sense was that the utility level renewables really didn't do that well. now that we saw the busted windows and the broken arrays, but the distributed energy did okay. and as i went around, an ecdotally it seemed those were in tact both by helicopter and by vision. is that a correct impression? >> that's exactly what i observed. depending on where they were situated with regard to wind flow determined how well they faired. >> got you. and for had wamr. walker, you s some of the stations being inundated. was that by rain or flood? >> both, sir. >> now, i'm going to ask something really stupid. but with the rain if undated, i assume -- i can imagine a flood because it comes in from the bottom. but rain comes down from the top and it seems as if a shield would have kept that protected unless the shield blew over. >> it wasn't the rain per se, on the station. it was the humiliation nof rain into these channels that went to the substations. >> was that a design flaw or inherent in any storm like this you're going to have that inherent problem? >> i don't think it was a design flaw. many of these stations have been there for many years. >> so the hardening you're speaking of would address this? >> yes, sir. >> got you. >> i'm not ignoring u.s. virgin islands. it's just that your problem seemed a little bit more manageable than those of puerto rico. >> i want to answer your question about the upgrade of the power situation. totally the rebuild and the resiliency would be about 850 million and i did want to point out that in the renewables we had two experiences. we newables by one vendor on one island worked perfectly. that entire field maybe 2% damaged. on another island with a different vendor and vendor for the it district court completely emasiated. >> st. croix was relatively un-effected? >> no, st. croix suffered tremendously in hurricane maria and john in the ureye wall of hurricane irma. part of the issue with it solar panels are clearly how they are if stalled. and who installed them. because we had great survivalability in 175 mile-per-hour winds and on the samile chbd just a mile away with a different vendor completely destroyed st. thomas. >> that's intriguing but i'm over time. i yield back. >> senator hinrich. >> i want to start and recognize congresswoman from the virgin islands joining us as well. i'm going to alow you to expand on the same line of questions. what vuyou been able to determage at this point the characteristics of the survivalability water r were so we can make sure in future that's if corporated? >> not as yet but this particular entity that is the third party provider their panels also for their private clients and in huge arrays, also seem to survive very well and that just indicates to us that in just putting these people hiring them, we've got to to be careful in terms of how they're installing them and what systems they are using because we had that different experience. >> it seems like there's probably something in the inhad junearing we need to look at and if had sure future installations learn those lessons. governor rosier, i want to ask you. you said the hurricane was an unprecedented catastrophe for puerto rico. but given the antiquated nature, it's also an opportunity to create a much better, more modern resilient electrical grid for your constituents. what do you want to see in terms of gen rashz, transmission, distribution? what would you like that to look like for your constituents? >> i would like tootoo be an opportunity to leap frog from 19th century technology to the van guard of the 21st century and what does that look like in puerto rico so? we have several flaws aside from antiquated power plants. most of our generation was done in the south. yet most of the people and consumption is in the north. so you lose about 12 to 15% in the transmission going north. it is time, it is an opportunity to rethink that. where do we have that generation and make it better. piggy backing on senator cassdy's comments, i think it's an opportunity to leap frog in renewables. i if vision also leap frogging to 25% renewables in puerto rico and recognizing that there are some mitigation strategies we need to put in place. that's why we have worked with the prepa governing board to have a gruch that can actually help us in the design and specifically looking where this can happen. events in puerto rico is very important. puerto rico's not flat, it's got a mountainous region. we'll be aggressively pursuing. it's a 90/95%. but that last mile always takes more time. because there are sort of remote areas of the island. this is an opportunity to make microgrids in puerto rico so that they can be sustained in different areas and lastly adding to this whole components, i think it's an opportunity to look at this from a top down approach with the collaboration of fema we were able to for the first time allow that either a power plant generator be added to the house or a renewable battery pack be add thootd homes in the step program. we expect there will be about 80,000 homes ife s introduced i step program. think of what that means if half decide to go with the a renewables. it means you have the starting conditions to think about a virtual power plant in puerto rico where you can have smart distribution of the energy and some days it might be cloudy in some areas of puerto rico. sun certainly in others as well and that can be distributed along side a, aof course a compliment of industrial-sized generation which i envision should start transitioning from petroleum-based generation which is costly and more harmful to liquid gas and so forth generation. so those are, in a nutshell what we if had vision the future grid of puerto rico to look like. >> i would just add to that. when you have retail electric rates in the mid-20s, that gives an awful lot of room to build that new distributed clean sgrid because when you have ppa agreements being signed in the u.s. for 4.5 cents a kilowatt hour solar plus shortage, that really creates real opportunities here to do that and do it in a way that serves your constituents without gouging them as well. >> i think it is an opportunity based on the margin, it differential. i'm sure that the governor as well over here has the same problem that can bekwm an opportunity. >> thank you, senator hinrich. >> thank you for the panelists for bringing your governors. thank you for your leadership. all of you. thank you very much for your leadership. governor, good to see you again. obviously a very meaningful viz toot puerto rico in the days following the hurricane and have an opportunity to see what happened to our fellow americans and tragic and of course this committee, this congress is committed to continued solutions of partnerships. i had raforeign relations committee markup. so i may have missed when you discussed this in your opening statements or question and answer sessions. what should prepa look like in five years, from a governing structure standpoint, whaticide it look like in 10 years? >> i think we need to transform prepa. i think everybody's in accordance. i think that prestorm we a strategy moving forward. it was a longer term strategy based on natural obstacles that we would see in terms of switching some of these power plants and so forth. but now based on the catastrophe, if we look at this as a window of opportunity to renew and make it better, i think that it's a phenomenal opportunity for it people of puerto rico. what will it look like? i certainly see collaboration with the private sector. what is that structure? it needs to be ironed out, flushed out and developed. i think we need to look at it best interests of the people of pouerto rico to work with that solution. we have a gold standard p 3 structure in puerto rico i thing can be powerful. >> in your mind is -- prepa and its organization? >> as long as it objective stays the same which is producing reliable, efficient energy at competitive costs. i think this should be a cleaner energy paradine. those are the critical components. i spoke a little bit about those at higher level and committed to getting the results for the people of puerto rico. we're very much an outcome grid. >> commonwealth -- the commonwealth's objective is to have 50% renewable energy. prior to the storm 2%. is this goal realistic? is it right? and how can we get information tochieve that goal? >> i think that statement was laid out by another person in another panel. what we are looking at is the current to increase to 25% and what post five year looks like depends a lot on what is the resiliency of the system, how does it work with some of our other needs industrially and so forth but certainly right now in the short to midterm we see an opportunity to leap frog in what our renewable growth effort was and get to 20 to 25%. >> and thank you and governor, obviously, my comments about puerto rico stand, u.s. virgin islands as well. thank you for your leadership all. i'm going to probably submit question for the rectoord you. mr. walker, you talked about understanding disasters, your experiences, key qualification for the appointment you were receiving. seems like we picked the right guy at the right time. how are these skills boo eing put to use in puerto rico. resources, rapid response, how are we moving forward with that and move towards actions towardsysilience in puerto rico. >> i spoke earlier about opportunities. and taking and lowering the costs of electricity and driving economic growth. one, it step program. we converted that over to be able to change that out. we're putting an opportunity for solar with battery pack, recognizing the additional cost can of maintaining the generator and long-term strategies. in addition we've already identified 200 locations -- >> if i could real quick. maybe we can follow up with this conversation. last question i want to get in was what do you need from this committee specifically to move forward with your job? >> i don't need anything immediately because all the things that are necessary are actually being done. so we've mobilized it modernization of the lab consortium. and people at the power, we've invokeled noah and it national hurricane service to do slush models for the resiliency for substations and the integration and back on the mainlands of puerto rico and virgin islands. governor mack mentioned some survived, some didn't. as we move forward and if congress decides to appropriate dollars for permanent work, lot of things will come. >> i appalls i. >> cutting off. >> senator franken. >> thank you, madam chair for holding this -- thank you for leading the delegation down to puerto rico and the virgin islands. and senator cassidy came along with us and good to see both governors. i had a different take way from senator cassdy on the tesla array at the children's hospital. it seemed to me they were during the day using the solar array which they admitted wasn't big enough because of the space that was there. but that powered the hospital during the day and did fill up the battery and the battery lasted until about midnight until it was down 20%. was that your understanding? >> yes, they were. the average load time they were working -- mind you it was a couple of days of a lot of rain they were still obviously getting some energy. but it was about 20 to 21 hours a day that it was working under the solar panel battery system and they would have -- >> and then they had generators after that. so two weekends ago we went down to puerto rico. last weekend i visited some minnesotas from puerto rico who want this done in the rebuilding done in a resilient way as i think everybody that were on the panel does. and in a resilient way that makes fiscal sense and the sfederal government must do everything it can to assist. the importance of resilience here is that we know we're going to see these storms. we heard this is a once in 200 to 1,000-year old storm. with climate change, that's not going to be the case anymore. we know that with rising sea level, you're going to see stronger surges -- storm surges. we need to build a resilient grid because these are going to be happening again and as the climate continues to warm, they're just going to get more powerful. so we have to build a stronger, more resilient grid. so i want to talk about that a little bit. we have been uctalking about a vision of this. how we do that. one of the things i want to ask about is the stafford act. because if we're rebuilding this under the stafford act i was wondering and anybody's thoughts on this about the changes in the stafford act that are necessary to build back a better and is the administration aware of that, mr. walker and any thoughts on that? >> i can comment a little bit on that as think there's two cri m comaco components as well. the stafford act makes sense because you just put something back up. but if you are investing a lot of money in something that's going to come down again. it's just not the best use for that money. and i would also add the component of -- there is this element of trying to evaluate how much damage was done pryer to the storm because of the storm or because of maintenance issues. here's it reality with the -- >> i don't have much time and i want to hear from others. sorry, mr. governor. >> i'd like the comment on that. one, it should really think about building stronger and better because it prevents future costs for reconstruction and in communities like the virgin islands and puerto rico, the matching component can be difficult and administrative wavers. we'll have a difficult time meeting our match at 800 or $900 million to have the reconstruction done as is. so i'll say those two issues. it should build back to with stand and it should really give some aditional flexibility on the cost share. >> before i run out of time i want to say the one thing that hasn't been raised -- it has been raised a little in terms of we want the power to be less costly. my understanding was 27 cents per kilowatt hour in -- >> 27 to 29 cents kilowatt hour on the u.s. virgin islands. >> that's outrages. >> yes. >> and if we want to keep manufacturing there, we have 10% of our pharmaceuticals come from puerto rico. we want those to stay there. one of the things about building this more resilient and sustainable and renewable is that we can drive that cost down and the second largest cost for those pharmaceutical manufacturers is energy. and so if we want to keep those businesses there, we want to keep those professionals for who are working on that, we need build a much, much better grid that isn't run on diesel. ye yes, there's definitely a place for lng for natural gas, but also for solar -- we make resilient and for wind. thank you. >> thank you, senator franken. senator lee. >> thank you, madam chair. thanks to each of you for being here today for this important discussion. we begin today's hearing with a certain amount of knowledge. we know a lot baut what's going on with prepa. for example expert opinion testimony has identified a laundry list of concerns with the it management and operation. let me yus list a few. staff have been hired without regard to experience and expertise resulting the failure of multif had year projects. we've seen widespread theft of power and billing failures. we've seen a lot of outdated infrastructure that as resulted in an abnormally unacceptably high rate of force and sometimes prolonged outages. we have generation units that are technically outdated. requiring the reliance on really expensive fuel. and we've got procurement practices that have focussed on a large number of small vendors with payments going out to over 14,000 individualentities. so mismanagement have plagued for decades. if we don't start meaningful oversight over every contract signed in the territories, particularly with these entities, we could be looking at decades of ongoing programs and perhaps decades of doj corruption proskugdss. so a lot of people might be tempted to look at this and think that the starry -- the story somehow starts and ends with whitefish. whitefish is of course important. it's significant. you it emplifies what has become all too common place in puerto rico and the virgin islands. a system in which public graft and economic corruption have become all too common. but it doesn't take a biologist to see that a whitefish doesn't swim alone. if we put out a trolling net we'll find a school of similar contracts with handouts, with graphs and with greed all at the expense of hard working families. and so i want to look for some ways that we can address this. now, governor roseo i would like to speak to you and make reference to the false claims act put in place during the civil war era and among other things he put in place provisions allowing private citizens to bring suit on behalf of the united states in the name of the united states for billing fraud. so let me ask you, governor, would you object to an amendment of the federal false claims act and allow things like tattoo be brought by citizens in such a way that we define puerto rico. we define the united states to inclood puerto rico. in other words to define territories such that they -- billing fraud cases could be addressed through the provisions of the federal false claims act? >> it's my view that anything that gets us closer to behavior and treatment of the u.s. citizens of puerto rico to the u.s. citizens that live anywhere else in the united states, i propose, i support. so having not looked in detail at your proposal, what i will say in terms of sort of a broad statement is i am in the vast majority of citizens in puerto rico are willing to be full participants as u.s. citizens in all respects. >> ifcluding this one. you don't see anything about amending the federal false claims act -- >> what i would ask is for equal treatment in general. let's not pick in certain ways. let's just get equal treatment for the people of puerto rico and respond to their claim. i want to answer some of the premise but yver eer been in o for 10 months and ran on an platform of transparency, recognizing there has been decades of reckless behavior and that we have to establish reforms. our administration has been breaking records in terms of how mini reforms we've established and one of those reforms we're continually working on is a procurement reform. so that's why when the whitefish situation came about, i took action immediately. even first of all i called for investigation, i called for any investigation and light should be shed on that manner. secondly i if stalled a procurement compliance officer as well. that will actually be working on the concepts of that procurement reform for puerto rico as well. so we are very much committed to transparency. that's why when we're proposing what puerto rico starts rebuilding and in the rebuilding process we're going to do this franz apparently. we're go doing this with control. we're actually working with the white house for controls and trance parns. so we're very much willing participants in that. >> thank you. i want to be clear fraud against puerto rico is fraud against the united states and should be covered by it false claims act. thank you. >> as well as equal treatment to u.s. citizens. >> with all due respect, i'd like to ask for two minutes to respectfully respond to senator lee. i want to be very clear that the virgin islands and port authority have gone to great lengths to deal with issues of fraud. we prosecute customers who steal electricity and water. we fire and prosecute employees involved in theft. we're in our third year where we bid out each year services for off island lineman if there's a disaster so we don't have to go through that in a hurricane. this year we simply pulled the trigger. we do that for debris removal, we do that for road clearing. we are making sure that the cast of power in the territory is what it costs to produce power and distribute it. we have no tolerance for graft, none for theft, none for employees being involved to enrich themselves whether in the water in port authority or in the central government and you can be assured be of this money that you provide we will if sure that contracts with vendors have penalty clauses, we require grade a bonds to protect the inertest of the people of the territory and the people of this country. we need your help for the reconstruction but we don't want any obstruction on the premise that we're planning to enrich ourselves or to use grafts or underhand tables or activities in the procurement process and you have my personal assurance that won't happen while i'm sitting in the office of the government. >> senator cortez. >> thank you. thank you madam chair and thank you to the panelists here, thank you and thank you for your comments today. i too have constituents in nevada who have loved ones in puerto rico and just as concerned not just about puerto rico but the virgin islands and we're doing everything we can to help the people there. so let me start with something that my colleague senator franken brought up because this was a concern of mine as well. my understanding of the stafford act, 406 e that limits disaster relief funds for repairing, restoring or replacing a facility on the basis of the design of the facility as the facility exists immediately before the major disaster. now my understanding is that then is that all of the talk that i've heard today which is important talk about new infrastructu infrastructure, bearing lines, looking at how to add renewable capacity, that is something that's not going to be addressed through it funding relief from the federal government. i guess i'm asking mr. walker and general jackson is that your understanding? >> that is my understanding. as i mentioned earlier we're doing emergency restoration work now. a number of things mentioned here f congress approves additional appropriations, those would be opportunities we could further build into. >> are you asking today. that's what you're asking congress today to be able to set up new infrastructure and do what we said today. because we know another hurricane is going to come through or some other disaster. i think it's the way the climate is today. is that from the governors? >> to amend that. can you repeat the question. >> sure. so the stafford act limits the amount of money for disaster relief for repair and reconstruct. it is not for new construction or varying lines. so are you coming today for additional funds outside of the stafford act? >> yes. yes, because on the stafford if a system isn't damaged it can't be touched. if it's cost effective, it can be mitigated but the whole power system is all connected and so we want to change to more efficient renewables, wind, solar. if the generation system hasn't been damaged, then we will have an exclusion. >> yes, we are. we recognize the limitations of fema funding. so we're asking for additional funding so that we can get that flexibility as well. and actually rebuild better. again, it is -- you can discuss whether it's a good idea or not on the merit of the energy and structure. but it's really just a bad idea to rebuild the system that is frail over again. spend the taxpayer money. because your going to have to do it once over again. >> thank you. let me jump and say everything i've heard about concerns with the energy grid i echo with my colleagues. but let me jump to health care because this is an issue i heard the governors address as well. are you doing everything we can to address the medical needs? what do you additionally need from us and are you happy with the federal response when it comes to providing the health care? >> yes, we need changes in the policies and the law. for example the match rate for medicaid is an arbitrary 45% for it territories. fee basing schedules and the services covered under medicare and medicaid are stuck in the statute because it's a territory. just as a simple example. i have medicaid patients with cancer. if i have a treatment for that patient and that one treatment costs $13,000. under it statute it cms only allows a $1,000 reimbursement for that patient. that means it central government is in at 12 grand and so the basing of the fee schedules for the hospitals and application for renewal complete accepted over five years old. we're back on a 1989 fee schedule for the hospitals. folks leave and go to the mainland for services but those who cannot afford it are severely impacted and then the central treasury of the government of the virgin islands have to suubsudize that care and transport patients and they for their services. we wauncht want to work with the committee to make adjustments. we want the medicaid match rate adjusts. you gave us $300 million eight years ago to spend over 10 years. 226 million of it is unspent because we can't afford to put the dollars on the table to make the 45% medicaid match. so we're saying wave it for three years. we can spend it out of that pool. remove the fiscal clip. i have more people requiring medicaid because of the disaster and we can cover it out of that allotted pool. >> i'll be brief because i share many of the concerns. accordable care act gave puerto rico a block grant for particular allowed time because we're capped. we're capped at $350 million. that gave the illusion for a couple years that we were spending about $1.6/1.65 billion. what we're asking right now is aside from having the limitations and the catastrophe of the storm, we're now heading on a medicaid cliff as well dropping us off from an effected $1.6 billion to $350 million. what are we asking for? to consider for a five-year path to increase that cap number to 1.6 billion for two years to have it 100% covered in puerto rico. >> and in hurricane katrina the congress provided these wavers on the match and the additional support on the medicaid and medicare side. >> thank you and thank you for letting me go over my time, madam chair. appreciate it. >> governor, you recently canceled the contract with whitefish and called for an investigation. is that still going on? >> it is still ongoing. i called for two investigations. one for the local in puerto rico and the dhs to do the same. and i called essentially upon are of the entities that can investigate to do so. listen, we are committed to transparency and we're committed to finding out the truth in this. >> and i take it if the investigation discovered any wrong doing there will be prosecutions so appropriate action to follow. secretary walker, you did indicate you stand by ability to restore the grid but in light of the ongoing investigation of whitefish as it governor just mentioned, perhaps should provide more oversight than waut you had indicated. i also want to note i think it is a good thing that you are working with our national lab to kp up with a more resilient grid and doing the modernization efforts that should occur for puerto rico. but a state like hawaii which is also an island state -- the kind of collaboration and developments occurring as a result of what rr happened to puerto rico i would hope would have an applicability to hawaii and even alaska. >> so hawaii quite a bit of work in resiliency. i actually have the written document with that and we've pulled on some of the work that doe actually did in conjunction with hawaii and heeko when they were putting that system together. i myself have been to hawaii several times on the underground secondary nett arar arary netwos to their overall system. so between the work that has been done previously in the labs, the work hat as the been done specifically, the fact i had a meeting yesterday where the hawaii projects were -- we were going through it reports and the documents specifically with regard to how to integrate things that were done that were successful and those things that weren't with the surgeon vileeneds and puerto rico. >> i know ihad hihas pretty significant vulnerabilities should something of that magnitude hit. i think -- i'm very interested in how that can help hawaii. governor, i realize that the -- we know the stafford act has limitations on the funding you can get. were we to lift that limitation of -- there might be the unintended consequence of our various power authorities not doing their job to maintain, modernize in a maintenance of effort kind of a thing. so i think that it is really importi important we ask for additional funds in addition to what's provided in the stafford act and i'm wondering based on your estimates, how much are you asking congress to fund in terms of the kind of modernation, rewill hazisilience that you wo the see in puerto rico? >> it's about $17 billion in damage estimation. >> one year? >> no, for the bulk -- >> $17 billion? >> that's right. >> is it your -- well, i know you hope congress will authorize that and -- or that funding to occur in one year or is it eerv period of time? >> it would be over a period of time, of course. again the effort is this is our initial damage assessment. i want to state that we worked on this with third parties so that you could get third party validation of how robust and deep the damage was. we're also including and separating what it takes to put it back together and be resilient towards the future. >> do you know if the trump administration is prepared to support your funding request of $17 billion? >> what we're asking over here is very simple. congress has to making a decision on how they wan to act upon it different disasters that have occurred across our nation. what we're asking is equal treatment. equal treatment. texas submitted their damage assessment as well. i'm sure that the other jurisdictions that have had damages will do so as well. i think that you are empowered to put the guidelines of how that is going to work. it is my job as governor to make sure you have the best information available so that you can make those decisions. what i cannot accept is unequal treatment to the u.s. citizens in puerto rico. i'm sure the governor would expect the same as well. so we are doing the damage assessment, recognizing this has been a huge catastrophe. had this storm gone through any other state, no matter how modern of a system was, it would have been catastrophic and this is what we want to say. we don't want this conversation to be diluted by saying some of the parts were old and so forth. this is a -- top 10 storm in the history of measured storms in the atlantic. it passed right through it whole of puerto rico leaving no place unturned. it was a slow storm, slower than it average storm. there was about eight to nine miles per hour. and it is my job to make sure you have all the information and then my expectation is that we'll get treated equally to all the u.s. citizens in all of the otherer states. >> thank you. >> senator sanders. >> thank you, madam chair for holding the hearing and let me thank all of our panelists for their hard work on these very difficult circumstances. madam chair, today's hearing on disaster relief is important. the work we has to do goes above a and beyond the immediate disasters. forgive me a short amount of time. so i'll be curt and ask you to be brief. let me ask mr. walker and general jackson, given the fact that almost two months after the hurricanes some 50% of the people in puerto rico are continued not to have lec trishty and many people lack drinking water in the virgin islands. it is 31% now have electricity and in st. croix i think it's 16%. we are the wealthiest, most powerful country in the history of the world. do we really think that we're doing a great job when thankful people in puerto rico and 80% in the virgin islands still don't have electricity two months after the storm? mr. walker? and i understand the difficulties. tough terrain, it's islands. but do we really think we're doing a great job? >> i think there is a team of people between the federal government and prepa and the puerto rican government as well as virgin islands that virgin i. that are working through the challenges associated with this. i believe the leadership of the governor and leadership of the fe ma there. they are mobilizing. >> i got all that. i don't mean to be harsh. we are the most powerful nation on earth. should two months after the disasters half the people in puerto rico and some 70% of people in virgin islands still not have electricity. general jackson? >> senator, i think we have the mission assignment on the 30th of september. this is not a mission the core normally does. my opening remarks we don't have preordered contracts and we have to go through a federal process. to allow us to get the right capability to the islands. that's what we have done. we have gotten -- we have mooued. >> it's not a criticism. i understand you have protocol. it's tough stuff. all i'm saying. this is the united states of america. two months later. people on the islands still living in misery. i think as a nation we could have done better. and must do better. number two, let me say to the chair i agree with much of her initial remarks except she didn't mention climate change. my guess is that who knows what tomorrow will bring, but there's every reason to believe that your islands may suffer even worse disasters in the future. i think we're all in agreement it is insane to rebuild the way it was. we agree with that. let me ask mr. governor map. you mention some of the solar installations work quite well. if you had your freedom to move the way you wanted to, what percentage of the virgin islands would be sustainable within ten years? >> we started talking 30% by 2025. and before the hurricane hit we had one-third of that installed. we want to put 21 more megs in wind and additional solar and smaller power generating units with micro grids on the three islands. >> do you think the future would it be unrealistic to say 20 years you can be 100% sustainable. >> i wouldn't say unrealistic. i hope i live another 30 and we're at 40 or 50% renewable. >> right now, governor thank you so much for your hospitality. i want to thank the mayor. for her hospitality in san juan. as well. right now, and i don't understand this, you are the east dela soul. translated the island of the sun. but right now in puerto rico as i understand about 2% of your electricity is generated by solar. >> by renewable. >> in general. >> how does that happen and you talk about i think 20% being solar. that seems to be a conservative goal. >> in the short term we talk about 20 to 25%. in the immediate after math of rebuilding after the storm but certainly i am very much committed to renewable in puerto rico. i think that a lot of the effort we have been making with some of the stake holders is challenging them to prove that their technology can be scaleable to a size of puerto rico. if it were up to me i'm 100% backing renewables in puerto rico. as much as they can get. >> let me conclude. today we're dealing with the immediate crisis. preez let us not forget i'm more familiar with puerto rico problems than the virgin islands. they maybe similar. you have in puerto rico a poverty rate of 46%. unemployment rate is twice the national average. healthcare statistics we had a brief skulgs discussion on that is a disaster. high school grags rates in the puerto rico and virgin islands are near the bottom of the united states. but perhaps this is an issue we have to discuss that is puerto rico is struggling with an unsustainable $75 billion debt. and $49 billion in pension obligation. more than one-third of that debt is held by wall street as a rule chul funds that are getting interest rates of 34% on tax exempt bonds they purchased for 29 cents on dollar. >> yep. >> this is an issue the committee must deal with. thank you. >> senator mansion. >> thank all of you for being here. my heart goes out to you. i understand how tough it is and everything. and i'd tlik briefly touch on the now cancelled contract and i want to go into it because it's coming from the state of west virginia we do this type of work. but the white fish energy the small company from montana. awarded $300 million post storm contract. i'd like to have that to the unanimous consent to enter the record. the article. >> it will be included. >> they charged $319 an hour. for line men. that's a rate 17 times higher than the national average. i understand the emergency situation things are stressful i understand all that. and also the cost on the island. example, white fish is building $4,000 an hour to rent a helicopter. that's twice the rate of ongoing. charging $80 for daily meals. more than double, $30 major league baseball players get. $332 for hotel rooms and workers. the thing that i look at and see this whole thing, i understand how this could have happened, happened so quickly. and but then i found out that they requested for the mutual assistance which goes out immediately usually when you get hit and you know you have a high probability of getting hit you ask for had assistance. from the american public power association. but governor, i think mr. rodriguez waited six weeks before he made the request? >> so there's, thank you for the opportunity. first of all. let me stress that i immediately cancelled the called for the cancellation of the white fish contract. even without result of the investigation. recognizing it was in the best interest of the people of puerto rico. in terms of the mutual aid, you have to put this into context of where we were at the juncture. there was a lot of mutual aid was going to other areas. virgin islands, florida, harvey. and within the span that the was established, it was to attend to the considerations of the storm after in the after math of irma not after maria. once the process went through we had alternatives with the core. we understood they were going to be aggressive so we can engage of them. and once we saw that that was not going to be enough, there was a solicitation in terms of that. let me state again. that i am a willing participant in this effort. that investigations need to go on. that whatever comes out of them we will take. >> i'm not here accusing. im saying a disaster plan in my state of west virginia when i was governor we had disaster plans. subjected to flooding, i had very very challenging state that took a graphically when you look at the location. we were ready and prepared. it seems like you would have reached out to the american public power association. and the ed son. being prepared because you know that's the first thing that will go down. that's all i'm saying on that. it doesn't this contract went out quicker than the request for help from the professionals that could have brought you a different rate structure. >> the ceo of the power authority will be in the panel and will be available to go through that. >> we'll get to that. governor map, we have spoken before. i have the fondest for all the islands in my heart. with that being said i think one of the panelist before one of my colleagues said you can't continue to do the same thing over and over. and i saw on your testimony and statement that you'll be baring lines and doing things differently. right now your price is about 32 cents per kilowatt higher. three times higher than national average. approximate e troll yum is a great. you're trying to reduce that. i have been there and we tried to work some things before. and it was always a challenge because local people would reject different types of thijs you felt needed to be done. with this disaster we have had throughout the islands of your virgin islands chain. are people more willing to understand we have to make changes to prepare for the next time we get hit? >> thank you for that question. the answer is yes. this is why we are pushing for we were before the storm. with more aggression we're pushing renewables. we want to work with how to access li access liquid natural gas. we want to have micro grids. some of that property that we received in our setdlement. we want to use that for wind generation. so the short answer is there's a lot of opportunity both from myself, my delegate. my legislature. to make the tough decisions to strengthen building codes. to change the way we produce and deliver power. so bring the price down. and tighten our procurement system. >> my time is running out. the expertise we should be able from the mainland to give you with the things we change in technology and things of this sort. i know sometimes you run into opposition because of the structure of how you run your grid systems or run your utilities. if we're able to breakthrough that and really to kbet to where we can give you more -- >> when 80% of the people can't turn on lights. they're willing to do anything to get the lights on. we want to use the opportunity to make the changes. >> we want to help. that you think. >> senator king. >> i want to join senator hin rick in welcoming senator basket. i know a strong advocate for her citizens on the island. and welcome the governors as a former governor myself. i feel the discussion is elevated substantially when we have governors on the panel. governor map i apologize. i was at another hearing i didn't hear your initial statement. how are the virgin islands on track to get the aid they need is it being a package with puerto rico? what's the status of the federal aid? >> the support from the federal system has been good for the virgin islands. in terms of how we respond to life issues. we are really working through fe ma on the shelter in place program. having some difficulty there. the feds are putting more money into the poll ins in terms of $25,000 per unit. but want to restrict the amount for permanent repair at 20,000. we're trying to work that out. our presence here sdp your help is essential in terms of setting aside dollars. and changes in the statute. that permit more than simply rebuild as is. >> i'll get to that. but basically it's on track. but there's going to be a damage assessment and request for aid as we have done for texas and florida. >> yes. >> thank you. couple technical questions. i was fascinated by your testimony that the solar farms survived and others didn't. which indicates that solar is sur vifable. if it's properly built. i notice in the wind turbines it appears the damage is broken blades. is there an assessment of whether the towers with stood the storm? the turbines are there. is broken blades the extent of the damage? >> that would be a question i defer to governor. had has the wind toufrs. >> tell me about were there wind farms that survived. >> there was devastation across the wind farms that we had. you would see the blades come out. some of the towers went out as well. and similar to what the governor saw in the virgin islands. we saw severe devastation. but we saw other areas that were practically. >> the question is, properly designed renewables are still feasible option for the islands. >> of course. >> given the hurricane risk. >> of course. >> how about rooftop solar how did that do? >> it did much better in puerto rico. again there's some mitigation strategy about putting sort of a. >> similarly in the virgin islands as well. >> there's those turned out to sur voif well. considering this was a cat 5. slow cat 5. >> rooftop did well? >> in fact. because of that, in terms of the reconstruction on the school. we'll use the roofs on the school to create micro grids for the schools and put solar panels on them. >> that gets to my next question. we're all agreed it doesn't make sense to rebuild a 1980s grid. when we have an opportunity we have renewables and economics are so much better. who makes that decision? who will design. >> you do. by changing language and staff. >> i never knew i had that power. >> yes, sir. you do. by making the changes in the stafford act that permits it. or the appropriation and the set aside for the money for the virgin islands. and puerto rico. if you authorize it. >> that's the second time you anticipated any question. we need to amend stafford so it's not rebuild what was there before. >> yes, sir. >> there are several bills being considered on that. that's something we need to do. even if stafford is amended assume for a moment who is going to make the decision? is it the power authority of the islands? >> once the authorities in place and the dollars are in place we will work with fe ma, the arm core of engineer, through the process that every other state goes through in setting up what the new profile should be. the u.s. doe and virgin islands have been great partners in the last five years. with know how renewables can work. the test and all that. we'll work with the federal agencies to make the right decision. >> final question for both islands. the trance mission lines went down. that's a vulnerability. so you're not so dependent upon major transmission. and under ground. >> it certainly does in puerto rico most of the generation is done in the south. most of the consumption in the north. you get loss in efficiency as well. it is an opportunity to sort of flip that script. >> just to add that the u.s. virgin islands this is the fifth time that the united states government is paying to rebuild the power distribution system. on an aerial basis. this is 300 plus million just under reconstruction. that putting it under ground in the main corridor the second corridors and having the micro grids and some aerial in the neighborhood make the system a lot more resilient. that could with stand the 185 miles per hour storms. >> appreciate your testimony. and look forward to working with you. this is an extraordinary opportunity for our country. to see what a modern grid can and should look like. thank you. >> thank you, senator. colleagues we have a second panel. that we need to get to. i do think that we have gained great information. i have hosts of additional questions that i would like to ask each of you. i'm prepared to stay for another hour. hour and a half. and do a second round with this panel. if colleagues want that. but otherwise i would suggest that we move to panel number two. so we can get their comments. so i'm getting consensus. thank you. governors we appreciate your leadership. senator walker, general jackson. thank you both. [ inaudible conversations ] following testimony by the governors of puerto rico and the virgin islands. a panel of utility officials talk about their role in hurricane recovery. amng them was the executive direct or to have the puerto rico elect trick power authority. who depended his decision to grant a $300 million repair contract. to the small montana energy firm white fish energy. the company is currently under investigation by the fbi for allegedly over charging puerto rico power authority. this panel is an hour ten minutes. >> thank you. we begin the second panel again with distinguished group of individuals. who are prepared to continue the conversation relating to the after math of hurricanes irma and maria. on puerto rico and the u.s. virgin islands. the second panel will be led by mr. ramos. executive director for puerto rico electric power authority. welcome. thank you for being here. mr. rimer. is the executive director the ceo for the virgin islands water and power authority. thank you for joining us. mr. rhymer. he will be followed by mr. jose. the acting chairman for the puerto rico energy commission. we welcome you. and finally we'll have ms. natalie the executive director. for puerto rico. welcome to each of you. i would ask that you limit your comments this morning to five minutes. your full testimony will be included as part of the record. but i do know that colleagues have questions. you have obviously seen from the first panel there was some directed to the governors that they deferred until we had the expertise from this panel. hopefully you'll be able to address those questions either in your opening statement. or in your follow on questions. so with that, if you would like to lead off the panel. welcome. >> senators, thank you very much for the opportunity to appear today. although i'm present here physically, my thoughts, my focus are on the people of puerto rico. and on the workers on the ground reestablishing power to all of the customers. when i became executive director of prep pa in march 2017, i knew we face cig kantd challenges. i never imagined that i will be facing the unprecedented natural disasters caused by two massive hurricanes in just two weeks. the second storm hurricane maria damaged nearly every single prep pa substation. shut down all the transmission lines across the entire island. devastated prep pa operation and control centers. and left puerto rico without electrical power. the starting of challenges that we have faced. hundreds of structures, substations, distribution poles, lines, transformers were destroyed or damaged. prep pa communication and control centers were inoperable. we were forced to defer to radios and satellite phones. to get at least some sort of communication with our other operational centers and power plants. actually used by the salvation army requested to use our facility to go through the radio. once we were able to establish the communication center. the devastation to roads and airports made it difficult or impossible to assess the damage in some areas. it took us nearly a full week to make contact with all of prep pa facilities. in total today, load has been restored to 39%. and we have focussed on restoring power to critical customers including hospitals, water and sewage treatment plants. agencies providing essential service and others. first mission was water systems and hospitals. happy to report we have reached 85% of all hospitals in puerto rico. and on the prep pa great power today. we continue to have extraordinary and unprecedented challenges however. the areas currently without power and more isolated and more mountainous. not as easy to reach. the restoring power to the community requires unique skills and it will take significant more resources. the extraordinary effort the island need your support. i will like to take a moment to address prep pa contract with white fish energy. i run the two hurricanes before maria. prep pa received many offers of assistance from different companies. including one from white fish. white fish indicated it had access to more than 100 workers. 100 pieces of equipment. and large stock of supplies. after the devastation of hurricane maria, i believe prep pa was unable to meet. requirement for mutual assistance through the appa. such as providing accommodations and other logistics. senators for three weeks, prep pa was suffering of lack of fuel for trucks. lack of food for employees. lack of drinking water. lack of ice. which is important on a tropical island. how could i have counted on bringing even more people into the situation? i needed people that were sel self-contain. military units bring their fuel and food and everything. they were first responders. after reviewing half of the proposals from first responders, only two offered immediate service. they were the fist to be able to arrive. wup proposal required payment of $25 million because of prep pa situation. prep pa is under title three. which is similar to a chapter nine. the other offered the ability to pay for work that was completed. along with the mobilization. taxpayer money was never at risk. there was never an expenditure of $300 million. they get paid when the line they're working on is finished and the delivered and tested and energyized and send an invoice. and we pay. so i trust the white fish contract where we continue to seek additional assistance from for the complete multi-billion dollar restoration of to come. i chose to contract with white fish because my priority was securing the immediate assistance of first responders that we needed. finally even during the recovery prep pa continues to focus the plan for the future. based on the energy. market pricing that recognizes the cost of the delivery. i am grateful for the thousands of employees and others who have worked through restore power. we have made significant progress. with much more remains to be done. madame chairman thank you for the opportunity to be here today. i will happy to answer any questions you have. >> thank you. mr. rhymer. welcome. >> good day, chairman. members of the united states. by way of introduction. senior direct of the water and power authority. on behalf of my board i would like to thank you for the invitation to appear. and provide authority and challenges we confront after the after math of two hurricanes that left devastation in the wake. the virgin islands water sdp power authority is in the middle of recovery, restoration and rebuilding from two major hurricanes which hammered the territory in september. in the wake is considerable damage levels of damage that has not been worse in almost two decades. before i discuss the direct effect of hurricanes, had on the virgin islands water and power authority. gives me the opportunity to discuss and broad terms how the authority operates. like so many other caribbean counter parts the virgin islands has no conventional energy resources to meet needs. the u.s. mainland utilities can connect to grids across america to purchase power from other utilities, power companies do not enjoy the luxury of interconnection. the three major islands are separated by water. and face a greater challenge given the depth of the ocean floor. these factors make connection by cables to boat financially and technically challenging. for the bulk of the 53 year history has provided the benefit of market conditions and oil fuel generation to produce electricity. given the separation by water, systems are required on st. thomas and st. kroi. st. thomas provides bringing cables to the nearby island of st. john. located more than 40 miles to the south of st. thomas and not interconnected. through the depth of the ocean floor which is five miles deep. 100% depend si on fuel oil while at the same time committing itself to to reduce by 2025. began to take hold with the implementation of additional solar power to the grid and most notably the introduction of liquefied petroleum gasoline. for the primary fuel for electricity. to build operate terminals, provide propane supply. and over see the from solely fuel or oil generating units. at the same time, the fuel diver diverse. $500,000 department of interior grant to pursue the plan which mapped out the generation mix for the utility over the next two decades. taking a page from the plan the authority in march entered into a contract with what north america to provide new generation units for the authority. we expect the units to be operational in mid-2018. to focus specifically on hurricane impact, the most extensive damage was experienced by the transmission distribution system and the over all electrical grid. the two power plants faired well. minimal damage. the transmission system suffered major damage after hurricane irma. of 80% on st. thomas. 90% on st. john. with the two islands each suffering 90%. hurricane maria rendered about 60% of the system. today engaged in a major effort. we're in a process of rebuilding. all before we can completely restore commercial and residential customers. our commitment to the rebuild and reabout 90% of customers by december. the task of rebuilding the distribution system further complicated by challenges of mobile equipment necessary. because of a unique geographic call kal. we have struggled to move material and equipment to from the united states to the virgin islands. the hurricane also had a devastating effect on the financing of the actual utility. every month the utility prior to storm generated about $26 million of revenue. currently we have are less than $2 million a month in terms of re knew. because of the actual storms price tag that can top $300 million, the financial hurdle is hard to over come. just equally concerning are the day-to-day operational costs. cost of restoration. cost associated with presorm obligations. operation of maintenance of the power plant. insurance. contract agreements. in the after math of the hurricane our task is not only to rebuild the transmission system sdp distribution system but the fact of more resiliency is taking precedence over everything else. we do not want to rebuild the system that is the same as before. we want to be more resilient and hardened. and do it by micro grid, under grounding and composite poles. senator, i'm here available to answer any questions and i thank you for the opportunity. >> thank you. >> members of the committee. i'm the alkt acting chairman of the puerto rico energy commission. thank you for inviting me to appear. and the interest in the recovery. my testimony makes four points. the commission in the on the electric industry performance. the commission establishes performance standards and pressures while restoring investor confidence. to restore and transform the islands electric industry cost effectually. for 70 years prep pa operated a integrated or regulated monopoly. with prep pa performance the legislature in 2014 passed act 57. the commission. created and empowered to use performance standards kp competitive pressure to transform puerto rico electrical industry. the breath of the commission duties is illustrated by the opening provision of the act. the commission shall be able to guarantee the orderly and integrated development of the electrical system. and the provision of electric power services. at reasonable prices. when establishing standards for utility monopoly the goal is. reliable service, at reasonable cost. when injecting koch tigs the goal is extract and reward the most cost effective entities. economic efficiency. a utility cost is only and only if the commission determines is to be the least cost is when it becomes reasonable. the commission is an expert agency that makes the decisions based on fact and logic. the foregoing principles are evident in the many orders. the proceedings, resource plan, performance proceeding and the where the commission issues the. the order detailed the extent of system deterioration. and the absence of the discipline in prep pa budgeting and spending. the commission calling emphasis is restore and transform cost effectively. the commission operating and proceeding to identify short medium and long term action that would produce an electric system that is modern, flexible. and capable of supplying electric service. prep pa difficulty restoring service show the need to adopt an and implement alternatives that allow greater resilience and faster restoration. the commission will assess ways to promote technologies. increase private participation in restoration effort and reduce the dependence of centralized generation. all with the goal of enabling us to respond to future emergencies more quickly and kofs effectively. prior commission inquiries produce examples of the contracting policy and project management. correcting these is crucial to prep pa ability to attract future financing while lowering rates so that the commonwealth economic development effort can succeed. in these and other proceedings the commission will be focusing on the following areas. prep pa spending, cost recovery and rate setting. internal operation, finances, customer relations, and the mix the correct mix of the islands supply and demand resources. also, to identify strengths and weaknesses of alternative market structure for products and services. implement competition for competitive services. and determine the appropriate roles for distributed generation and resources. the need for independent entity free of politics and focussed on merit with a single minded goal of bringing kofs effectiveness and competitive to the commonwealth most important infrastructure industry could never be greater. members of the committee, thank you for the opportunity to testify. i look forward to your questions. >> thank you. >> thank you. members of the committee. the executive director of the financial over sight and management board for puerto rico. it is an honor to appear before the committee. unlike the member of the panel i am not an energy expert. i will try to frame the boards approach to the island power system. let me first step back. the over sight board is a creature of congress. created in last years legislation to deal with the fiscal and debt crisis faced by the commonwealth and many instrumentality including power system prep pa. the problems we were designed to traes were decades in the making. our primary tools to restore access to the private kal toll markets are certified fiscal plans. before the hurricanes we put in place budgets for the kmont wealth and several instrumentalities including prep pa that were balanced without additional federal aid. because the commonwealth and some instrumentalities had an enormous and unpaid debt burden they entered the bankruptcy like process established by title three. that is more or less bha stood before the hurricane. in the board view after the hurricanes the boards role of providing confidence, over sight and transparency is more important to the welfare of the people of puerto rico and protection of taxpayers. we are an over sight board. the mission assure all stake holders from residents of the island to congressional members. from creditors to american taxpayers. that the commonwealth and instrumentalities are fiscally responsible in self-sufficient. to do so we are utilizing all the tools congress gave us to the fullest extent possible. we have the power to certify fiscal plans that meet the goal and deny those that don't. we have the power to require that spending be in accordance with the plans and annual budget. we have the power to review contracts to require they be consistent with certified fiscal plans. the truth is the recovery of the island depends not only on fiscal discipline. but importantly on federal hurricane relief. we must revise our prans to reflect the new reality of declining re knew. postpone savings and the need for emergency and recovery related expenditure. there's no way around it. the immediate human needs and the longer term success that the board was established to facility depends on the continued generosity of american taxpayers in the form of emergency and supplemental appropriation. >> people in puerto rico and businesses especially the manufacturing base to have the confidence that timely and sizable federal aid is coming and will be sufficient. in particular the number of people in businesses that leave the island over the coming months will be deeply affected by the perception of whether the necessary help is forthcoming. hence the board joins with the governor and people of puerto rico in requesting that the upcoming supplemental appropriation give the people and businesses of the commonwealth confidence in the federal government commitment to the island recovery. however we know it is not realistic to believe the congress will appropriate the level of fund needed if it is not confident of adequate over sight of the funds. we'll do everything we can to provide that over sight. turning back to the power sector this is the single most important block of recovery. short and long term. lek tresty is key. without it we will not have functioning classrooms-over businesses. without it we will not have truly safe and livable neighborhoods. homes. without it we will not have a working water system. because it too depends on the restoration of power. similarly we will not succeed in achieving a long term sustainable economy which is the mission. unless we can create a reliable, affordable, sustainable power system. prep pa history in the system condition poor service and high rates before the hurricane evidence that fundamental change is needed. the board working with the governor and prep pa intends to require transformation of prep pa in the revised plan. that plan is scheduled for certification in the first days of february. that revised fiscal plans need to chart a path to provide stable, reliable and cost effective power. by a grid that incorporates best practice. and acts as a catalyst for sustainable economic growth. this must be reflected and confirmed in a plan of adjustment proposed by the board that bridges an end to the debt restructuring and ensures the future pathd and serving puerto rico well. i commit that the process of revising the fiscal plan will be open in transparent and it will welcome the insight from a broad array of experts. we have scheduled sessions and welcome input from the members of the committee. the testifying here today and all others with good ideas. again, thank you for the opportunity to testify. i look forward to the committees questions. >> thank you. thank you all for your testimony. let me begin with you. i think you have heard as you have listened to the questions directed to governor. some frustration maybe a fair bit of frustration. questions about why mutual aid was not triggered earlier. obviously questions about the white fish contract. and what has happened with that. clearly a an issue of concern for all of us. as senator cant well mentioned. it's one thing to be responsive in the immediate after math of our hurricane. it's another thing to be engaged in something that we would all call gouging of the taxpayer. when you look at the terms that were agreed to. you have indicated and the governor said this as well, that right now it's about 49% power to throughout puerto rico. we recognize that in particularly in the more interior parts of island it's going to be a long time before we see power to the island. there's an article a couple days ago that on thursday there was a major outage in the area that apparently that white fish had been working. and that you went from -- this is quoting this article. from 40% of power down to 18%. question to you is are we seeing -- have we gone backwards in certain areas? have we seen parts of the efforts that were rebuilt failing the 49% that you're saying today is something that i understand is fluid. the governor said that he wants to be 95% by the end of the year. is that realistic? and really what does that mean. because what i was told was that that maybe 95% to certain areas. but long term for the i lapd of puerto rico, when do you realistically envision power to the full island? >> yes. so let's go to the first question. we suffered an outage last week not related to anything failing on any already repaired infrastructure. after the failure we flew over had in helicopters to find out the reason. we plooef because they denied it. there was a over head crane working not for prep pa. something else. and it touched one of the conductors certainly the system protects. that line is the only line that is tieing the south where most of the generation resides. to the north. therefore, most of the load is on the north. we went down to 18%. to give you an example about 65% of the load is in the metro poll tan area. 5 to six towns joined together. >> is this back online now? >> it was back online the line was reenergized within an hour. it didn't have any failure. nothing to fix. and then the system restoration takes time. the restoring the already repaired circuit. because we still don't have all of the communication with our substations. therefore every time the power goes out, men have to go to each substation and open each circuit when the power in the transmission system is restored. men have to go physically to the substation and throw the switches to return power back to the people. right now. >> how about meeting deadlines? the end of the deadline the governor set. >> the deadline is for tomorrow. 50%. we're at 49%. we feel confident we'll be meeting that. >> then for the year end at 95%. >> year end 95% it is a hard deadline to meet. we're working very conscious about it. we are focus on the work. we believe we can reach it. >> is it fair to acknowledge that there will be parts of the island that will be without power for a significant period of time? >> certainly. let me put this in context. hurricane in 1989, when prep pa had 4,000 additional employees than it does today. and where the system was certainly in better condition. took six months. six months. >> we don't want that to be a standard. >> i agree. every time an expert from the u.s. has come to puerto rico, to help us and we're grateful. we take them in the helicopter and the jaw drops. because of the rugd terrain the amount of damage, we need to keep that in perspective. we are bringing in now a lot more resources. we have been in the discussion since basically last week. trying to get hotel rooms which not available. we have reached a an agreement where people are there will they have hotels will bring provide them. and the rest may be in camps. like military type camps. >> i think that some of the frustration was as i mentioned with the previous panel. that the truly was a full month of recovery effort that was lost. when you have individuals within doe and the army core suggesting that really the recovery began when the mutual aid when appa when brought in. you can certainly understand the frustration not only of the people of puerto rico. but those of us that all americans who want to be there to be helpful and supportive. >> so you were in charge of the contract with white fish? >> i certainly authorized its signature. the in charge was the procurement people of prep pa. with our legal advisor. many of them of course -- you have to remember the dire conditions that the puerto rico was in. some of the people arrived to the office weeks after. so we need to do a head count. certainly our emergency procurement personnel assigned to the emergency management office were in charge of the contract. >> okay. emergency procurement people. okay. so on september 26 the president authorized 100% federal cost sharing for emergency work. in puerto rico. prep pa had been granted 200 million for expedited funding for fuel, 100% by the federal government. so when we hear about the huge mark ups and the huge prices, to mu dhul aid. it's about recovery at cost. it is about people coming in to help you. that's what it's mutual aid. they come in to help you at cost. that's why you sign an agreement. i'm sure there's places all over my state probably in alaska as well. where people have already signed them. we have storms all the time. mutual aid is hey, neighbor, neighboring county, neighboring state. if we have a disaster will you come and help at cost. i'll come and help you at cost. mutual aid is not i'm going to come in and charge you rates and gouge. just to be clear. so once the federal government committed to 100% of the cost up front. why did you double down on the white fish instead of activating mutual aid. why did you just keep going with white fish? >> the mutual aid agreements first of all prep pa sa proud member of the appa. i think certainly we need to revise mutual aid agreements in terms of prep pa. prep pa doesn't have a neighbor. the only neighbor is st. thomas which we have worked together in the past under certain storms. and they were devastated as well. the mutual aid agreement requires that the utility the host host utility takes care of the logistics. there were no logistics in puerto rico. the first couple of weeks no fuel, no phone. no internet. no nothing. the people that actually got there from white fish they brought all the satellite and equipment. etc. we had a process. we had six offers from six companies. so i realize -- one other thing. you need to recognize this is hard to change. hurricanes pass first through the caribbean and come here. that situation of course creates some immobilization of the mutual aid resources. if they're available they're probably from the west coast. a as you said they're expecting to find out where the land fall is. what the damage is in order to help their neighbors. physical neighbors. not virtual like we are. we needed first responders. we did a process with six different companies. six companies provided us with rates. the rates were extremely similar. very similar. >> so are you saying that puerto rico as an oi land didn't understand mutual aid or saying that the concept of mutual aid as going work at cost because it's an emergency didn't exist? is that what you're saying. >> i'm not saying. what i'm saying is puerto rico is not part of the continental u.s. concept of neighbor companies coming to the aid gets changed. the market basically sets the rate. prep pa is under bankruptcy. there's logistics for mobilization. and when we saw that six companies some of them very reputable. had similar rates, for prep pa. we decided to move with the first responder effect. eventually after the first responder we specifically required experience on transmission lines. eventually we were going to call everyone to help. we needed. >> everybody was calling you. i guarantee you you weren't able to receive them. my utility wants to go. i guarantee you weren't charging white fish rates to go. somewhere when the administration said they would pay 100% of the cost. we should have said why are we paying rates. just because you're an island. we have disasters in alaska. i doubt people just gouge the heck out of people because it's hard to get to alaska. it's hard to get resources there. so i doubt that my utility sit around and go it's alaska. let's gouge. just because it's proek puerto rico. my point is the reason why we're going through the painful exercise is we don't want this to happen again. i personally looking at the reports think we'll have a lot more disasters. we don't want to see price gouging because somebody had the unfortunate experience of being in the path of the devastation. do you know of anything of any information, any individuals that might have received a kick back from white fish? as part of the contract. >> i don't know if any individuals may have received a kick back from white fish. the price gouging issue would then be talking about six different companies in involving that sort of situation. our focus again was restoring power. having first responders. we have six proposals. very similar pricing. so if there was price gouging it involved six companies. and i believe that's another legal term for that situation. we don't know of any anybody having been offered. >> white fish. >> a kick back in prep pa. we the negotiation and the contracts were direct from prep pa from the evidence i have gathered from the procurement office. we have there's a legal figure in puerto rico. protected by law that can represent a company. that was not existent for none of the six companies. no, it was a direct contract with the procurement people. contact. >> i want to ask you. white fish energy said they had contacted interior secretary after signing the contract with you. is that -- do you know of contact there? >> none. with prep pa? none. >> i just, do you know anything about this. do you have e-mails or communications related to in? >> none. we learned about the contract in the press as you did. >> all right. we may have some more questions for you. but i think it isn't a question of whether other people wanted to charge higher rates. we want to set a principle here. that is i think this is how this came about. is a bunch of utilities who know this is the standard way we respond to di sathser. not to go in and charge gouging rates. but to have mutual aid agreements. i'll come and help at cost. and cost sometimes can be a little more than it would be if it was just in oregon. versus to puerto rico. but it doesn't mean it's going to be the rates. i do i'm going to come back to you. with questions about why after the federal government -- because previously what puerto rico told us is we weren't clear. we had to get somebody on the job. and didn't know who was going to pay. we were forced into this. but you're telling me that it wasn't you were forced. that you thought it was a standard way of doing business. >> senator, the standard way of doing business in an emergency may get somewhat -- i'm familiar with mutual aid. we went through the virgin islands to provide help. what i'm saying is that on the conversations with the different ceo of mutual aid. we have prior to irma, it became evident that i will not get a fixed date for resources arriving to puerto rico. that was evident. therefore after we saw the hurricane was hitting puerto rico, and causing from one side to the other. i need first responders. at request six companies the prices were similar. we engaged one of them. knowing we will need more resources. i got calls from utilities they were not bringing lodging. there are no hotel rooms. you have to come military style. with a tent with your fuel with your generator. if you want to help. >> i guarantee you i'm sure if you raised the flag. my time expired. if you would have said to the u.s. federal government should we pay the rates. i doubt you'll find something that said yes, pay the rates. >> maybe this is a misunderstanding. sdp i think surrounding this there are misunderstandings. but i learned from someone at doe that the reason that mutual aid or mutual assistance didn't kick in right away were that there weren't offers right away. i'm hearing there were six high priced. but that mutual aid is usually is based on the state being able to repay. and that since puerto rico was in bankruptcy, that there wasn't offers to do this. is that just wrong? >> senator, the six offers were from private companies. proposals. none of them are related to appa or mutual aid. private companies. >> okay. so i think that's might be part of this. that it wasn't the normal if minnesota gets hit, wisconsin and south dakota, north dakota are ready to go in there under normal mutual aid and to do it under the normal circumstance, but that the fact that you're in bankruptcy made these other -- all the normal, you know, utilities that come in worry that they weren't going to get paid. so that's perhaps why the offers you got were not the normal ones coming in. this past weekend, i met with minnesotans in puerto rico. one issue they raised was ensuring that stakeholders across the spectrum in puerto rico are engaged in the rebuilding planning process. i just want to make that heard. another major concern they raise is about what critical infrastructure is being priority ittized to receive power especially when it comes to medical treatment. now when we say load restored to 49%, that doesn't mean 49% of the population. that means 49% of the 100% of the grid power is being generated and it goes to strategic places. so citizens need medical help right now, most of the hospitals are up. and -- but what i was hearing from my folks in minnesota was that in some cases community clinics or a doctor's office might make more sense since the hospitals are so stressed. and if you can get a generator to a doctor's office, he could see people in his area and the same with community health centers or clinics. any -- mr. ramos, are these smaller facilities being prioritized for emergency power now or during the rebuilding, grid rebuilding process? >> certainly. the u.s. corps of engineers, part of their mission has been to put emergency power generations on those facilities, critical facilities that prepa cannot reach on an expedited basis. we've been collaborating with the u.s. corps of engineers on that strategy and we believe it's worked fine. prepa has 85% of all the hospitals in puerto rico hospitals energized under his grid at this moment. there are smaller, as you said, medical facilities that are still running on generators. we have another -- i don't have the percentage here but we've also energized some of those smaller medical facilities. the priorities were set from the beginning to get hospitals first because of the extreme forces that this hurricane impacted puerto rico with. so it was medical facilities and, of course, first, the large, then the medium, then the small. in each region we have accomplished that with the exception of the southeastern region, which we accomplished that fairly quick, but the southeast region took us longer. last week we were able to energize the guayama hospital. and we have a strategy -- the corps of engineers -- >> i'm sorry, i only have so much time. i just want you to hear from my puerto rican constituents in minnesota that private doctors' offices might be a good way to deliver healthcare to people so they don't have to go to hospitals. that's all i was saying. and i am out of time. i just want to ask you about and just -- i can ask these questions for the record, of course, but about how you see prepa going forward in the rebuilding of the infrastructure, and ms. jaresko, i'm sorry, what you see as your oversight responsibility regarding prepa, so that we can make sure that this is all done as efficiently as possible. that's what we all want. >> that's such an easy question. >> huh? >> that's an easy question there probably. >> yes. it's very simple. it's like that, boom. it's up and done beautifully. thank you, manager. >> thank you, senator franken. i think those and so many others that people will have will submit for the record, but it is important that we try to discern what these appropriate roles are going forward. senator cortez masto. >> thank you. ms. jaresko, previously -- by the way, thank you all for sitting and testifying. previous panel there was a question that was asked. i think it was of mr. walker. and the question was whether or not the disaster relief money could go to bond holders to satisfy that lien. and he responded he was confident through i think some of the attorneys and fema that the disaster relief money coming from the united states could not be utilized by the bond holder to satisfy the lien. do you feel the same way? are you confident in that statement as well? >> yes, i am, ma'am. as well we worked on behalf of the debt and achieved a comfort order in the title three court to assure everyone in particular the federal government agencies that their grant funding could not be used in that way. >> thank you. and then to respond to senator franken's last question because i noticed you were ready to respond, i'm curious as well what your answer is. >> well, the tools that we've been given by -- in particular have to do with fiscal plans and bupting so we're in the process of asking for a revised fiscal plan from prepa which will be do you december 22nd. we'll certify that by february 2nd. it is a five-year plan and then followed by a single operating budget to make sure we're fulfilling that fiscal plan. because the fiscal plans and the budgeting we have a contract policy where we've now begun to review all contracts over $10 million as well as using that contract review policy to look back at other contracts on an ad hoc basis under $10 million. then finally we have an authority through title three as a representative of the debtor to bring all of this together. many of you have asked questions about how the creditors work, how maybe being in bankruptcy affected the decisions that were made. all of this needs to come together in a plan of adjustment to take us out of bankruptcy in the end and a plan has to be filed in the court, it's a business plan beyond whatever business plan or fiscal plan or brating budget we have that gives everyone confidence the debt has been stabilized, the debt is restructured and prepa is no longer in bankruptcy and it's cost efficient, reliable energy for the island for the residents and the businesses. >> thank you. thank you all. appreciate you being here. no further questions, madam chair. >> thank you, senator. i think it's important to note that you have -- you've got head of prepa, mr. ramos, who has been on the job since march of this year. you indicated, i understand, that there's been a significant turnover with the prepa board, the most tenured member has been in place now just 11 months. we have the energy commission as a new regulatory body that has been stood up. you've got the oversight board that just came in with promesa. and oh, by the way, let's just throw in two hurricanes into the mix as they're trying to deal with all of this. making a very hard situation, i think, even much more complicated and just really hard. mr. rhymer, i want to ask just one question of you, sir. we don't want to leave the virgin islands out of these discussions. i know and senator franken saw the same thing when we were on our trip, there's been so much attention focused on puerto rico that i kind of assumed that the virgin islands were doing just fine and perhaps the damage had not been as substantial, then we get there and see the facts on the ground. and it's just a true reminder that just because we have moved to another disaster on another island doesn't mean that the virgin islands is all well. the governor has indicated that during his tenure five hurricanes have gone through, an opportunity, if you will, to have to deal with a rebuild of the grid five different times. surely you learn from each successive disaster, and that effort to, quote, harden the grid is there with each rebuild. to what extent has the u.s. virgin islands been able to harden the grid from successive disasters to allow for greater resilience? >> over several years we've been able to basically tap hazard mitigation funds and that's why we have underground systems that generate basically power to 75 to 80% of the businesses in the commercial districts all in st. thomas and st. croix. that's what we've been doing since each storm that we try to learn from each lesson learned how do we underground, how to become more resilient. that's what we're doing now in terms of micro grids going towards basically composite poles et cetera, to make sure that in the next storm there's less damage, not as much damage or little to no damage. such as we have enclosed all of our basically our substations in concrete buildings. so there was no damage on our basic substations territory wide. so that made it where there's no damage. in the past we would have had damage on the actual substation. now each successive storm we learn and get more resilient. >> i'm told that senator lee is on his way back, so i'm going to ask another question until he a arrives. secretary walker mentioned and we saw a picture of some of the transmission lines that were just loaded with almost a jungle of fiber-optics. he and i had an opportunity for conversation as we were coming back from our visit to both puerto rico and usvi. and he indicated that this was something that department of energy was going to be looking at in terms of does that increase vulnerability to additional damage? mr. ramos, have you looked at this aspect, those lines that were carrying kind of a jumble, if you will, of fiber-optics, are you seeing some evidence that perhaps this may be something that we need to address and change going forward? >> certainly. many of the fallen poles fell because of the additional weight of infrastructure that originally was not supposed to be there. so the grid itself is old. our new design standards account for an amount of additional infrastructure for communications and other, but many of the poles were -- you know, they had communications because some local law of puerto rico provided the common right of way usage, so we have to allow telecom companies to put the telecommunications cables, but the pole itself was not designed to those standards. but the new standards prior to maria and the hurricane, they've been in place for some years now do include so that people can put -- companies can put additional infrastructure. puerto rico, as you know, even though it's lost so many people, you know, going out of the island, it's still the metro areas are highly populated, you know. it is very difficult. and i understand the situation for other infrastructure to get a space other than the prepa pole. but it's something that needs to be revisited. everything relies on prepa. all of the other infrastructure relies on prepa, but they need also to invest in their systems, telecommunication, for example, in order to provide a service. >> it was a new issue that had been raised with me and one that i think is important to look at and one that i understand was not at issue in the u.s. virgin islands, which makes it again an interesting comparison there. mr. ramos, a question to you about the energy commission. i noted that it's a relatively new regulatory body. in terms of your ability to gain operational capacity, what is it that is needed within the energy commission to support what it is that you need to do? >> thank you, madam chair. definitely the commission operates with the statutory budget that is very limited to what the requirements are that the mandate, the local law mandates the commission to do especially now with the restoration that is required. this is not only one thing that we need to keep in mind is the prepa is a government-owned nonprofit utility. so typical -- typical the tools that the regulators have to stop imprudent costs to be borne by the rate payers are not present in the situation that prepa has because prepa has no shareholders. so any costs in being prudent or imprudence are borne by the rate payers. the energy commission is very -- we have to be involved in what's in all the restoration, not only if the federal funds are used correctly, but any recovery that is not covered by the federal funds will be covered by the people of puerto rico by the rate payers. so our role is to make sure that all actions are prudent. with that situation is why the energy commission ruled on the rate case order that, since we could not disallow costs after the fact, we needed to stop them from being incurred at all. and that's the reason why we requested prepa to submit the budget so we could approve the budget before they actually started spending the money. and there is a challenge of coordinating with the prepa board, so we asked prepa, this is something that can be coordinating between the prepa's board requirement of improving budget as well as the fiscal oversight more requirement of approving the budget. but we are responsible that the costs are prudent and that the rates are just and reasonable for the people of puerto rico. so it's a matter of now working all together being able to put a plan in place. the commission has been the regulatory expert in the performance will take a first look at it, prepa can approve it and fiscal oversight can approve it and we can move forward. >> let me ask you ms. jaresko, and the fact that you have a lot of new folks, new regulatory body from the oversight board perspective, have you seen enough to determine that an emergency manager is necessary now or should the new leadership be given a chance to implement whatever reforms you feel are appropriate? >> so, as you know, madam chairman, the board took an action and filed in the title three court to name a chief transformation officer. the court ruled yesterday against us in that action, although we have not yet seen the written judgment, so i can't comment on it in detail. the reason we we thought that was necessary, the reason we think that is necessary, to deal with prepa, is to bring together these various components not in any way to interfere with the emergency work that's being done, the recovery work that is absolutely primary, number one, and most important today, but to bring together the medium and long-term aspects of federal funding, federal funding that has to be brought together with potentially private sector funding to ensure that the sector is finally competitive and providing the kind of low cost reliable electricity we all want to see and bring it together with, as you said earlier, the end of the debt restructuring and the end of the title three process. bringing all those short, medium and long-term perspectives is what we thought and that the chief examination officer can do. however the judge's decision is a setback for us. but we're not throwing up our hands. we have the authority to deal with the fiscal plans and we're in that process and will continue to work towards providing the oversight necessary to assure everyone and give everyone confidence that all the funds being used will assist us in achieving the goals that we all share. >> do you think that you describe this as a setback. do you think that this will limit the ability to attract that private investment that you believe is necessary? >> i think it is a setback from the perspective of providing the oversight that the congress has been asking from us and for meeting the lofty expectations of the members. i believe that we'll still work with the tools that we have. we'll see what happens when we see that written judgment as to what is in the written judgment from the court yesterday, but we will continue to work towards -- together with prepa, a government and the regulator who i think is really quite critical and i can't underline enough in my previous experience in the energy sector in ukraine, having an independent regulator that provides private sector with confidence about rate policy and consistency of rate policy is an extremely critical part of attracting private sector capital. >> senator lee. >> thank you very much, madam chair. i would like to start with you, mr. ramos. do you think politics have played a part in prepa's failures? >> historically? >> yes, historically or currently. >> i cann attest that historically certainly. a big corporation which is part of government, it gets -- it is -- even if its current bankruptcy for a place like the jewel of the crown of puerto rico regardless of the bad surveys and the bad condition which it is in and certainly there's too much intervention of government officials in the sense of -- may i be -- please don't feel bad, but it gets a lot of attention if you do bills for prepa, if you do, the people get attention. so politicians, in order to get attention, they, you know, do subsidy. subsidy -- actually, subsidies have killed prepa in its finances as well. too many subsidies in order to get, i guess, you know, votes, et cetera. so certainly there's been a -- >> -- it encourages people to do that. what about in employment. how many political appointees are currently employed by prepa? >> prepa traditionally has been a company where politicians or parts of government can get their family members to get work. >> do you have any -- >> percentage wise certainly over 50%. >> we're talking about many hundreds -- many hundreds of political appointees work there? >> they're not political appointees by the governor. i'm saying historically, the prepa -- prepa has served as the place of employment for families of, you know, political figures since the '70s or early '70s. >> so this is separate and apart from any political appointees? >> the political appointees are myself in the sense that the governor recommends me, but the board of directors confirms my assignment, and then in turn i choose, you know, qualified individuals which many years ago it used to be also a political issue. this time with the independent members of the board that we have, i choose the people according to their capacities and then the board ratifies them. >> okay. my understanding is that historically that currently there might be around 200 political appointees there, historically that number has been much larger at about 650. that's a lot of people. there are a lot of ways that we can term that. but i want to move on. i would like to speak to mr. rhymer for a moment. in our first panel this morning governor mapp stated that wapa has gone to great lengths to ferret out corruption. we are happy to hear that and look forward to hearing what changes have been made and we'll follow up with governor mapp to learn more about them, but for now i'd like to focus on power theft and some of guapo's accounting practices. if i'm not mistaken you blamed some emergency rate increases on the territory's hospitals saying that they, quote, just don't pay, close quote. at that time the estimate was that the government of the u.s. virgin islands owed wapa the $2 million. can you tell me how much money wapa is owed by u.s. virgin islands government agencies authorities and nonprofits? >> currently about $36 million. >> $36 million. >> what are you doing to collect that money? >> we work the governors of the virgin islands to collect those funds. the difficulty is the two hospitals that you quoted earlier can't afford to pay because of the medicare medicaid structure because they don't have a lot of uncompensated care that forbids them to be able to have the cash flow to be able to pay the utility. they know i'm not going to turn them off because it's a critical function of the virgin islands so they just don't pay the utility. >> this is something that they're doing in order to deal with funding shortfall that they have. they just don't pay. and then they continue to have power. . have you changed your audity procedures? >> yes. >> and speak to what issues of fraud or corruption you've uncovered like duplicate billing or defaulted. >> we've never had duplicate billing. what normally has in the virgin islands is we have an emi structure in place where it's automate automated. so we get more accurate billing. i've never encountered any fraud in billing as a whole. we have from the customer side but not from the utility sigh. >> i have other questions that i'll submit in writing. tha thank you, madam chair. >> thank you, senator lee. thank you for your testimony here this morning. obviously, we have much to do working with you and leadership and the people of puerto rico and the u.s. virgin islands. while this is the energy committee and we've focused a great deal of today's hearing on the energy piece and how we can build out a more resilient, efficient and better grid, we're also the committee that has the oversight of our territories and our insular properties. and so we heard discussion about medicare, medicaid, healthcare, i raise the issue of schools, and while it might not be specific jurisdiction for this committee to take up, for instance, those issues relating to reimbursement for medicaid or medicare, i think it is important to recognize that we do have that oversight role within this committee. and when you recognize the impact, the economic impact, the personal impact that these two significant territories, commonwealths have sustained with these recent disasters, it makes the role of this committee just that much more heightened. i think you have seen from the interest and the participation from committee members not only in today's hearing but the many of us that have played the trip down to take a look for ourselves. i might note that senator carper, while not on this committee, had joined us and had hoped that he would be able to participate or at least listen to some parts of today's hearing as well. so there's a great deal of interest. we need to be working with the administration. we need to be working with so many of you that have given insight here today and know that as we move forward with proposals, we will be looking to you for your input and guidance on these specific areas. so with that, i thank you all and this committee stands adjourned. >> thank you. >> thank you. >> -- very focused relationship with prepa. i think he feels much better having been on the ground, having been a participant in some of that team. so he obviously has a lot more direct relationship than pretty much anybody that i've talked to from the department with regards to the role of prepa. so i figure he's in a pretty good position to weigh in there, but my sense is that there is a lot that is being stood up right now. prepa's been around for a long time. we've heard that. you have new management. you have new board. you have -- again, you got a new regulatory body, a new oversight body, a brand-new governor who has only been in since the first of the year. there are a lot of foullks that are getting themselves settled. then you have two hurricanes that have hit and, oh, by the way, you have an island in puerto rico's case that is in bankruptcy. so there's a great deal that is at play. i think that our role here as a committee, our role here in congress needs to be very -- needs to be very rigorous. and monitoring and exercising a level of oversight that's appropriate. >> are those changes going to be forthcoming enough to shape how this recovery -- the recovery money has already gone out the door. are you able to change the stafford act to make the changes that we spoke about today? >> i think there's a fair amount of interest not only among republicans and democrats but between folks here on the senate side and the house side. we did have three members of the house join us when we were there last week. i think there is that agreement. i talked with not only secretary perry but director mulvaney about this and i think there is a recognition that we need to address this. keep in mind that you've got -- you've got different levels going forward to provide for the relief here. you had a category 5 hit an entire island in puerto rico, and not only st. thomas but st. croix as well. so making sure that there is appropriate funding in this next supplemental to allow for that short-term effort is important. but this is going to be a much longer effort and recovery given the extent of the damage. and so timing wise i think there is keen interest in looking to what we can do to amend stafford and we'll do that. but again, i think there's going to be plenty of time that we're going to be dealing, unfortunately, with this disaster. >> -- the fbi or dhs regarding their investigations into whitefish? >> have i -- >> have you been briefed? >> thank you, senator. c-span's "washington journal" live every day with news and policy issues that impact you. coming up wednesday morning. indiana republican congresswoman susan brooks discusses efforts to combat sexual harassment on capitol hill. then connecticut democratic congressman john larson tackles the reform efforts. then former homeland security adviser lisa monaco talks about preventing future terror attacks. be sure to watch c-span's "washington journal" live wednesday morning, join the discussion. wednesday the senate finance committee meets for a third day of work on the republican tax reform proposal. we'll have live coverage as members do a line by line review of the bill and offer

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