Lacking leadership, billions in solar and grid infrastructure funding goes unspent in Puerto Rico
After Hurricane Maria decimated Puerto Rico in 2017, the island suffered the largest blackout in US history, with the last home’s electricity finally being restored after 11 months of the darkness.
Knowing more resilient and renewable energy could help prevent future power outages, island lawmakers say accepted an account entitled Act 17 in 2019 establishing parameters for a resilient, reliable and robust energy system with fair and reasonable tariffs for all classes of customers. Puerto Rico has committed to achieving 40% renewable energy by 2025, 60% by 2040 and 100% by 2050. To meet the 40% step step, the island must add 3,500 MW of new renewable energy over the next four years. , according to the Solar Energy and Storage Association of Puerto Rico (SESA).
At the same time, billions of dollars in federal funding from the Federal Emergency Management Agency (FEMA), the United States Department of Housing and Urban Development (HUD), and other entities were made available to the island to rebuild and strengthen electrical infrastructure. The amounts sounded hopeful of meeting those legal goals in theory, but meeting federal criteria and making joint plans to allocate the funding was a different story.
“There’s an unimaginable amount of theoretical money floating around that doesn’t actually flow, but has been appropriated in some way,” said Javier Rúa-Jovet, SESA’s head of regulation, policy and government affairs.
Receiving public money, especially from FEMA, comes with conditions. At its most basic level, the administration requires Puerto Rico to submit proposals for agency approval.
Puerto Rico’s sole utility failed to even take that first step when it was due in September 2021, according to residential solar installer Sunnova, who attended the hearing.
“There is $12 billion available for Puerto Rico to upgrade their energy system and they just haven’t bothered to fill out the paperwork. There is also a degree of incompetence and mismanagement that is part of it all,” said Meghan Nutting, executive VP of government and regulatory affairs for Sunnova.
Puerto Rico’s Resident Commissioner, a non-voting member of the United States House of Representatives, urged the island’s utility company (known as PREPA until Luma Energy in May 2021) to submit the documentation as soon as possible. to serve.
Several entities have some input into the island’s electrical system. There is the state governor and legislature, the federal government, the relatively new Puerto Rico Energy Bureau (PREB), the Fiscal Oversight Management Board for Puerto Rico, and others. The difficulty is determining who should ensure that funding goes to the right places to support Act 17 — as well as the federal renewable energy targets set by the Biden administration.
“We hope that any money appropriated or available to Puerto Rico will not just flow at one point, but be used in ways that are not just consistent with federal statements.” [but also] with the policies of Puerto Rico,” said Rúa-Jovet.
Part of the problem is that some of the legislators who advocated Act 17 are no longer part of the legislature. In the vacuum of leadership, utilities have tried to sidestep residents’ self-generation in favor of more fossil fuels and investor profit.
“People at the federal level need to help with this and enable and provide guidance to Puerto Rico,” Nutting said. “There is a lot of work to be done, so we need political leadership and we also need to take advantage of the assets we have.”
Those existing assets are the tens of thousands of residential storage systems already deployed on the island that can be put together to form a virtual power plant.
Act 17 initiated a new integrated resource planning process that required the utility to purchase thousands of megawatts of new renewable energy. In a historic first, PREB demanded that the utility include virtual power plants in the bid, Rúa-Jovet said.
“That’s definitely the largest untapped virtual power plant in the world just standing there. Sunrun and the other market participants could very easily put those batteries on a timer so that they cycle at the same time every day and provide that service to the utility, but there is no mechanism to do that,” said Chris Rauscher, senior director of market development and policy at Sunrun, another solar + storage installer on the island.
It is not yet clear whether the utility will accept any of the VPP proposals.
To scale residential solar and storage installations even faster and more equitably, SESA wants the utility to use federal funding to establish solar and storage tax incentives that match income levels.
“The market is self-driving quite well, but there are parts of the market that need help, such as lower-income people who may not qualify for the usual everyday solar loan or lease due to credit scores,” said Rúa- Jovet .
Puerto Rico has the potential funding to electrify the island on a large scale using creative solutions, but coordination and compromise are needed to achieve robust sustainable goals.
“It’s just these huge cash flows that are available, but you have to connect the dots and… [have] people talk to each other to know what can be done,” said Rúa-Jovet.