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Biden administration has opportunity to rebuild Puerto Rico’s electrical infrastructure

January 01, 2021
Cathy Kunkel and Tom Sanzillo
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Key Findings

The PREPA 10-Year Infrastructure Plan, which forms the basis for how PREPA plans to spend $10.7 billion in federal funding for grid reconstruction work, proposes to spend over $850 million of federal funding to construct a 400- megawatt (MW) natural gas plant and 330 MW of smaller natural gas peaker plants around Puerto Rico.

As noted by Government Accountability Office and by the Biden-Harris campaign, federal funding for post-hurricane reconstruction has been slow to materialize on the island.

As the federal government prepares to spend more than $10 billion on the modernization of Puerto Rico’s electrical system, it is more important than ever to ensure that these funds are used effectively.

Executive Summary

The Institute for Energy Economics and Financial Analysis (IEEFA) has worked with partner organizations in Puerto Rico on electricity sector transformation since 2015. We have participated as expert witnesses in cases before the Puerto Rico Energy Bureau, testified before the Puerto Rico Senate and U.S. Congress, and written numerous reports related to the long-term energy planning, contracting practices, and debt restructuring of the Puerto Rico Electric Power Authority (PREPA). We have worked with environmental, community, business and labor organizations in Puerto Rico.

Deep reform of Puerto Rico’s antiquated, expensive and fossil fuel-dependent electrical system has been needed since long before Hurricane Maria devastated the grid in 2017. A new electrical system driven by renewable energy will support the goals of resilience, affordability and fiscal stability. The Biden Administration has a historic opportunity to facilitate the rebuilding of the electrical system in a way that provides affordable electricity and utilizes Puerto Rico’s natural advantages in renewable energy:

  • The federal government should not facilitate the development of new natural gas infrastructure in Puerto Rico.
  • The Biden administration should accelerate the deployment of federal funding for energy resiliency projects.
  • The Biden administration should accelerate the deployment of federal funding for energy resiliency projects.
  • The Biden Administration should call for an audit of Puerto Rico’s debt.

Press release: IEEFA and partners renew call to write off Puerto Rico bond debt as part of restructuring plans to ensure low prices, resilient grid

Please view full report PDF for references and sources.

Cathy Kunkel

Cathy Kunkel is an Energy Consultant at IEEFA.

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Tom Sanzillo

Tom Sanzillo is Director of Financial Analysis for IEEFA. He has produced influential studies on the oil, gas, petrochemical and coal sectors in the U.S. and internationally, including company and credit analyses, facility development, oil and gas reserves, stock and commodity market analysis, and public and private financial structures.

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