Housing Dept. has used less than 1% of $2 billion in federal funds for energy grid programs

As of July 12, the island Housing Department had spent less than 1% of its total budget for a pair of grid rehabilitation and resiliency programs – only $179,761 of $1.93 billion.

By The Star Staff

The island Housing Department has spent less than 1% of almost $2 billion it received in 2021 for electrical grid programs and is seeking an extension on the use of the funds. a federal audit revealed.

The U.S. Department of Housing and Urban Development (HUD) Office of the Inspector General (OIG) issued a report earlier this month detailing the status of the Puerto Rico Department of Housing’s (PRDOH) Electrical Power System Enhancements and Improvements programs.

In June 2021, HUD allocated nearly $2 billion in Community Development Block Grant-Disaster Recovery (CDBG-DR) funds to enhance and improve electrical power systems in areas impacted by hurricanes Irma and Maria.

The PRDOH budgeted most of its $1.93 billion in disaster recovery funds for its two main electrical grid programs: $500 million for the Energy Grid Rehabilitation and Reconstruction Cost Share Program (ER1), and $1.3 billion for the Electrical Power Reliability and Resilience Program (ER2). The PRDOH launched the electrical grid programs in 2023, and both programs are in their early implementation stages.

On April 26 of this year, the PRDOH sent a letter to LUMA Energy, the operator of the island’s electric power transmission and distribution grid. and Genera PR, the power and energy service provider, requesting to finalize the Project Prioritization Strategy with the Puerto Rico Electric Power Authority (PREPA). On May 21, PREPA submitted a potential project list that included 14 project worksheets. A project worksheet is the form used to document the scope of work and cost estimate for a project. The form supplies the Federal Emergency Management Agency with the information necessary to approve the scope of work and itemized cost estimate before funding. Each project must be documented on a separate project worksheet. The estimated cost share was $65.95 million.

As of July 12, the PRDOH had spent less than 1% of its total budget for both programs – only $179,761 of $1.93 billion. The report outlines actions the PRDOH has taken to date, such as entering a memorandum of understanding with HUD, the Government of Puerto Rico, the U.S. Department of Energy, and the U.S. Department of Homeland Security, and engaging in preliminary steps including, among other things, publishing program guidelines, developing project selection procedures and executing subrecipient agreements.

“PRDOH has requested from HUD an extension to use grant funds for both programs until May 2033, which is nearly 5 years after the original August 2028 deadline and 15 years after Congress appropriated funds for Puerto Rico’s electrical grid needs,” the report notes.

“Almost seven years ago, Hurricanes Irma and Maria devastated Puerto Rico and its power grid. The unmet energy needs on the island are of critical importance, as are PRDOH’s programs to address them,” stated inspector Rae Oliver Davis. “This report provides valuable transparency around the status of the programs and their progress, as well as an update on PRDOH’s use of the substantial HUD funding provided to enhance the island’s power grid.”

“As part of our ongoing strategic planning, we will periodically evaluate the status of both ER1 and ER2 to determine how far along they are with their respective timelines, challenges encountered, and significant risks that may warrant additional work by HUD OIG,” Oliver Davis added.