How Should Puerto Rico Invest its $1 Billion in Resilience Funds?

Feb. 27, 2023
The US Department of Energy seeks stakeholder input on how to fast-track the distribution of $1 billion to build microgrids and other energy resilience projects in Puerto Rico.

The case for microgrids in Puerto Rico became clear five years ago when Hurricane Maria shut down its entire grid and parts of the island had no power for 11 months.

But the pace to bring resilience to the island has been slow, delayed by bureaucracy and lack of funding. Some microgrids were built — largely the result of donations and community sweat — but they are far too few, as subsequent disasters revealed

Now the US Department of Energy plans to change that with the distribution of $1 billion to improve energy resilience in Puerto Rico. Funds are slated to go to microgrids, solar, energy storage and other smart grid technologies.

The DOE’s Grid Deployment Office last week released a request for information (RFI) seeking input on how to design the program. The agency intends to fast-track the program and begin allocating funds this year. Responses to the RFI are due April 21.

The money comes from the FY 2023 Consolidated Appropriations Act, which President Joe Biden signed into law in December. It is meant to overcome decades of underinvestment in the island’s electrical grid that has jeopardized not only the island’s economy but human life. About 3,000 people died following Hurricane Maria in 2017.

Extraordinary energy burden

“A lot of that loss of life was directly tied to the failures of the grid, failures of the energy system,” said Shalanda Baker, the DOE’s chief diversity, equity and inclusion officer, speaking last week in San Juan at Puerto Rico Energy Week, organized by Advanced Energy Group (AEG).

In addition to dealing with an unreliable grid, Puerto Ricans face “an extraordinary energy burden,” paying 26.70 cents/kWh for electricity, nearly double the US average of 15.60 cents/kWh, she said.

“This is in an archipelago where 40.5% of the population is low income,” Baker said. “But we have an opportunity to bring low-cost and renewable energy to this place.”

The $1 billion will be distributed through what is called the Puerto Rico Energy Resilience Fund, or PR-ERF, a program that emerged out of President Biden’s visit to the island in October 2022 following Hurricane Fiona. 

As it institutes the program, the DOE plans to heavily rely on local collaboration that addresses community priorities, so is particularly interested in responses to the RFI that come from Puerto Rican stakeholders.

“Folks, if we do things the way we've been doing them for the last 200 years, the energy system that we create here in Puerto Rico… will not work for low income folks. It won't work for folks in EJ (environmental justice) communities. We have got to be courageous in thinking differently about how we design this energy system,” Baker said.

Plans for the money

The funds will go toward both short- and long-term energy solutions, from residential rooftop solar to community and critical service energy resilience. The DOE encourages partnerships with non-profit organizations and workforce training to sustain Puerto Rico’s clean energy economy. 

The money will be released in two rounds, the first will focus on residential systems, such as rooftop solar and storage, that can be deployed quickly for vulnerable households and those with disabilities. Later rounds will focus on community solar, microgrids, and other grid modernization solutions.

“For far too long, Puerto Ricans have endured an unreliable and expensive electric system with frequent blackouts due to catastrophic weather events and aging infrastructure,” said Agustín Carbó, director of the Puerto Rico Grid Modernization and Recovery Team. “This historic investment will be transformative for many Puerto Rican families, keeping the lights on through power outages, providing peace of mind during hurricane season, and saving them more money and reducing high electric bills with these clean energy solutions.”

RFP issued for hospital microgrid

Meanwhile, Puerto Rico’s Department of Housing has issued a request for proposals for design, construction, operations and maintenance of a hospital center microgrid. Bids are due May 26 for what is expected to be the island’s first hospital microgrid  (CDBG-DR-RFP-2023-01.) The project is being funded by the  US Department of Housing and Urban Development, which allocated funds to the Government of Puerto Rico in the form of a Community Development Block Grant for Disaster Recovery and Community Development Block Grant for Mitigation.

Interested in learning about more microgrids? Join us May 16-17 in Anaheim, California for Microgrid Knowledge 2023: Lights On!

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is the editor and founder of EnergyChangemakers.com. She is co-founder and former editor of Microgrid Knowledge.

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