More than five years have passed since hurricanes Irma and María impacted Puerto Rico in September 2017. Due to the vulnerability of the electrical cable system, the effect caused by both hurricanes remain ever present in the daily lives of the Island’s residents. Energy service interruptions are common and unpredictable, energy consumption costs continue to rise, and electric charge relays due to lack of energy generation are common. In addition, there is a risk exposure of climatological nature because of Puerto Rico’s location within the Caribbean region.
The hurricanes had a devastating impact on the electrical system and provoked the longest lasting blackout in modern U.S. history. The absence of electricity prevented residents from accessing essential services such as healthcare, communications, refrigeration, water, ventilation systems, air conditioning, and security. Due to a sustained systemic instability, residents continue to face many of the same challenges. Economic recovery has become difficult to achieve and the restauration cycle remains incomplete, while the electrical grid continues to be a constant and important factor, a critical element to economic development and the Island’s progress.
Action Plan
CDBG-DR Action Plan Amendment 1 (Substantial) for the Electrical Systems Enhancements: Effective on March 30, 2023
Final version approved by HUD.
Posted on 04/21/2023
Electrical grid conditions
Increase in costs and pricing for construction materials
Shortage in skilled labor
Recovery efforts after María were entirely focused in restoring electrical service
Therefore, the Department of Housing and Urban Development (HUD) granted a special allocation under CDBG-DR Funding better known as Puerto Rico’s Electrical Power System Enhancements Program. The Program’s objective is to relieve the financial burden caused by the electrical grid’s recovery efforts and the resiliency needs of the Island’s infrastructure.
In 2018, the Island received 9.7 billion dollars in CDBG-DR Funding and in 2020, an additional allocation of 277 million dollars to serve persisting needs. On June 22nd, 2021, HUD announced a funds assignment of 1.93 billion dollars for the exclusive use of improving Puerto Rico’s electrical system.
These funds offer an opportunity for improvements such as:
- Increasing the electrical system’s reliability
- Providing resistance
- Mitigating risks in the event of a natural disaster
- Electrical system’s sustainability and viability
The CDBG-DR Electrical Power System Enhancements Action Plan is composed of two programs focused on supporting the Island’s electrical grid improvements’ strategy, these are:
Energy Grid Rehabilitation and Reconstruction Cost Share Program
Electrical Power Reliability and Resilience Program
On March 25th, 2022, the Department of Housing and Urban Development (HUD) partially approved the Action Plan, allowing the continuance of the Electrical Power Reliability and Resilience Program’s (ER2) implementation.
Energy Grid Rehabilitation and Reconstruction (ER1) Cost Share Program
- Objective: Energy Grid Rehabilitation and Reconstruction (ER1) Cost Share Program.
- Budget: $500M.
- Grants: A 10% nonfederal match is required for energy systems’ recovery.
- Current Status: PRDOH is collecting specific information required by HUD before being able to implement this Program.
- Next Steps: Once HUD evaluates the information and approves the Action Plan in its entirety, the design and planning stages of the Program will commence.
- Eligibility: Eligibility to receive funds under the Energy Grid Rehabilitation and Reconstruction Cost Share Program is determined upon projects that have been considered eligible by FEMA or by any federal agency acting as the primary resource of funding to participate in the Program.
Electrical Power Reliability and Resilience Program (ER2)
- Objective: Provides assistance in the process of building a reliable and resilient energy system that will serve communities more efficiently.
- Budget: $1.3B
- Grants: Minimum allocation of 5 million dollars.
- Current Status: On February 3rd, 2023, a Subrecipient Agreement was signed with Puerto Rico’s Medical Services Administration (ASEM) to build a microgrid that will serve Centro Médicos’s medical facilities.
- Next Steps: In February 2023, the Department of Energy (DOE) and its National Laboratories will train PRDOH in the prioritization of strategic projects focused on the creation of microgrids.
Afterwards, a competitive application period will open and eventually, the grant execution and contracting for the Centro Médico Microgrid developer. - Eligibility: Agencies, Authorities, Trusts, and Boards of the Government of Puerto Rico (focused on projects that support energy systems enhancements); Public private partnerships as defined by Act 29-2009, as amended, better known as “Public Private Partnerships Act”; Units of local general government, local and municipal governments (including departments and divisions) (focused on projects that support electrical systems enhancements); For profit businesses (focused on projects that support electrical systems enhancements); Healthcare systems and public hospitals; Nonprofit entities that comply with the established requirements of capacity and experience
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Energy Grid Rehabilitation and Reconstruction Cost Share Program (ER1) |
|
|---|---|
|
Objective |
|
| Covers the allocation’s nonfederal costs without FEMA PA precedents for a PREPA Island wide project under FEMA’s FAASt strategy. | |
|
Budget |
|
| $500M | |
|
Grants |
|
| A 10% nonfederal match is required for energy systems’ recovery. | |
|
Current Status |
|
| PRDOH is collecting specific information required by HUD before being able to implement this Program. | |
|
Next Steps |
|
| Once HUD evaluates the information and approves the Action Plan in its entirety, the design and planning stages of the Program will commence. | |
|
Eligibility |
|
| Eligibility to receive funds under the Energy Grid Rehabilitation and Reconstruction Cost Share Program is determined upon projects that have been considered eligible by FEMA or by any federal agency acting as the primary resource of funding to participate in the Program. | |
|
Electrical Power Reliability and Resilience Program (ER2) |
|
|---|---|
|
Objective |
|
| Provides assistance in the process of building a reliable and resilient energy system that will serve communities more efficiently. | |
|
Budget |
|
| $1.3MM | |
|
Grants |
|
| Minimum allocation of 5 million dollars. | |
|
Current Status |
|
| On February 3rd, 2023, a Subrecipient Agreement was signed with Puerto Rico’s Medical Services Administration (ASEM) to build a microgrid that will serve Centro Médicos’s medical facilities. | |
|
Next Steps |
|
| In February 2023, the Department of Energy (DOE) and its National Laboratories will train PRDOH in the prioritization of strategic projects focused on the creation of microgrids. Afterwards, a competitive application period will open and eventually, the grant execution and contracting for the Centro Médico Microgrid developer. | |
|
Eligibility |
|
|
|
Approach for the Use of Energy Resources
- The Puerto Rico Department of Housing (PRDOH) has designed and implemented an innovative response plan for disaster recovery and mitigation that will incorporate climate resilience and equity in its design.
- PRDOH will prioritize projects that reduce any impact that may be caused by climate change, focusing on the use of renewable energy resources and distributed generation, among others.
- PRDOH will prioritize projects that work with critical infrastructure, that promote the energy grid’s decentralization and that serve the most vulnerable populations.
- Any project that improves generation, transmission, and distribution efficiency can substantially reduce any impact that may be caused by climate change.
- By reducing the loss of energy transmission and distribution, these projects can decrease the use of fossil fuels.
