Cantwell Highlights Importance Of Independence In Puerto Rican Energy Regulation

Washington, D.C. – Today, Ranking Member of the Senate Energy and Natural Resources Committee Maria Cantwell (D-Wash.) questioned the cause of recent blackouts in Puerto Rico and raised concerns about the effects energy reform proposals would have on the independent energy regulator. 

“Now we know that hurricane season is about to hit again…we all know that distributed generation could help in the reliability of this [the grid],” said Senator Cantwell. “The key thing now for us in Puerto Rico is to make sure that the regulatory process does allow for some distributed generation that would help us with resiliency.”  

Read Senator Cantwell’s opening statement entered into the record below.

Thank you, Madam Chairman, for scheduling this timely hearing to examine the current status of Puerto Rico’s grid restoration and proposals for the future operation of its grid. 

Before proceeding, I would first like to take a moment to recognize the service of nine Puerto Rico National Guardsmen.  They were tragically killed last Wednesday when their C-130 crashed shortly after taking off in Georgia.  

Our thoughts and prayers are with their families.

I’d like to thank all of our distinguished witnesses for sharing their expertise and perspective with us today.  

And I’d like to thank Senators Nelson and Rubio for leading a letter of a group of our colleagues requesting this hearing.  Senator Nelson has been such a forceful advocate for Puerto Rico, and I   understand he was on the island just last Friday.

Hurricane Irma struck Puerto Rico on September 6, 2017, and then just two weeks later Hurricane Irma delivered an even stronger blow. The result was the largest power outage in our nation’s history. In fact, in terms of number of lost electricity hours, it’s the second largest outage the world has ever known.  

The loss of life and devastation that followed has been tragic.  Seven and a half months later, we are still emerging from the dark.  

Today, 98 percent of power customers in Puerto Rico have power, but the system is still fragile and experienced two massive blackouts in the past month alone. Tens of thousands of Puerto Ricans are still struggling with daily life, and hurricane season begins again on June 1st.  

And while the vast majority of the island’s power infrastructure is as strong as it was before the hurricane, if not better, we must do more.  

We must be sure we learn from the mistakes of the past. We need to rebuild smarter. We need a more transparent system. One that is well-managed and incorporates standard business practices.  Perhaps most importantly, the iteration of PREPA must be subject to oversight by an independent commission, much like the current Puerto Rico Energy Commission.  

Puerto Ricans deserve an electricity system that is as reliable and affordable as their fellow citizens on the mainland. That’s why it is critical that the billions of dollars in federal aid go to help Puerto Rico start anew, not enrich opportunistic hedge funds. 

Unfortunately, a recent runup in Puerto Rican debt securities, some of which have doubled in value in the past few months, has allowed speculators in Puerto Rican and PREPA debt to profit off of taxpayer funded disaster recovery. 

That’s shameful. 

Disaster recovery funds should help Puerto Rico incorporate microgrids, renewables, distributed generation, and necessary resiliency into the grid. 

An essential first step is to ensure a robust and independent regulator is in place.  Otherwise, we will be back in exactly the same place years from now.  

Several energy reforms in the Puerto Rico legislature may be contrary to this goal.  I look to our witnesses to explain whether the current utility commission, which is represented here today, needs to be overhauled or not.

For example, I’m concerned that pending reforms could overly politicize the makeup of the utility commission. They could undermine just and reasonable rates. They could also allow an umbrella agency to override the commission’s independence.

That would be like letting the President appoint five members from his own party to FERC.  

Then, just in case, authorize his Energy Secretary to override FERC’s decisions. 

Finally, a proposal to shield privatization transactions from oversight by the energy regulator could facilitate backroom deals beyond the public’s watchful eye.  

While PREPA’s new board and management is a welcome change, I am concerned that not enough has been done to prevent another Whitefish deal.

I understand there is some effort to address these concerns, but more needs to be done.  

Our fellow citizens in Puerto Rico need to know that we will stand with them at every step along this recovery.  

We will not stop our dogged oversight to ensure the federal departments and agencies are giving you what you need, and that the funds are spent responsibly.  

Thank you for being here this morning for this important hearing, and I look forward to your testimony.