Heinrich Grills Governor of Puerto Rico on Plans to Stabilize Island’s Electric Grid

On Grid Reliance in Puerto Rico

Heinrich began by asking Jenniffer González-Colón, Governor of Puerto Rico, about the island's electric grid, "Governor Colón, Puerto Rico residents continue to face all too frequent outages and reliability concerns. That's despite billions of dollars in federal investments intended to modernize the grid, and I understand that you've raised concerns regarding LUMA's performance, and in fact are actively moving to challenge their legal contract in court. If LUMA is out of the picture, who steps up to manage Puerto Rico's grid and generation assets?"

González answered, "Since last year, we've been trying to resolve the lack of commitment of LUMA with the government. I inherited that contract. So, what we've been doing is, first trying to coordinate those differences with the contract. The contract says that when you have a difference with the contractor, in this case, the operator, you manage those differences, negotiating with them and having that difference being resolved by the courts. We tried to do that, and that's the reason we filed a first motion to the courts, that's still pending. They tried to remand that to the federal case. Judge Swain at the federal level said that should be resolved at the local courts so that's still at the court. [Then] we filed a second motion to cancel the contract. That is still pending review. One of the issues is that we're asking the court to make a transition process to allow..."

Heinrich interjected, "I understand that, but if you are successful, who steps in and manages the grid and the generation?"

González answered, "We want to have a private company as well, with experience in the United States. So we are not looking to get into public..."

Heinrich interjected, "That would require an immediate transition. It would require a commitment from some private entity. I want to understand that transition. I don't want there to be a gap. I mean, of course, people of Puerto Rico should not have any [less] reliability in their power than they have now. So who would fill that gap?"

González answered, "The question that we are asking to the court in that case is to allow a transition process, at least to a year, to allow the government of Puerto Rico to begin a formal process to ask companies that are interested to begin that process of formal request[s] for proposals and begin that transition process, but as we are..."

Heinrich asked, "Would LUMA still retain management through that year, or would someone else?"

González answered, "That will be part of the decision that the court needs to make, because as we are..."

Heinrich interjected, "What incentive would LUMA have to manage for a full year, if they're..."

González answered, "We need the court to decide how that transition process will go, because the government of Puerto Rico is not looking to go back to government operating the system, and I want to make that clear."

Heinrich followed, "I appreciate that. PREPA had huge challenges."

González answered, "We already got a bankruptcy in PREPA, so we are not looking at the government to take back that operation, so we want to have a private operator, like we do have LUMA right now, and a transition to another private operator. So to make that transition process, we should have companies with experience in the United States. So we want companies that have got experience in the United States in transmission and distribution to make that happen. In order to get that ready, we need the court to allow us that period of one year to make that open process. We cannot begin that process with[out] the proper instruction of the court."

Heinrich asked, "You referenced 1,300 megawatts of restored generation capacity. Can you walk through what specific projects make up that 1,300 megawatt figure?"

González answered, "During last year, we saw many reports of what was going on. We've got a very old system, and many people know from the 70s and 60s. So we went with the Department of Energy and PREPA and even Genera, which is the other operator, to try to switch oil and bunker C oil installations to convert them to LNG, right, and most of them in those combined cycle. We're talking about plants like San Juan in Palo Seco that were transitioning. Even last week, we were transitioning old turbines that were invested more than $58 million from the Department of Energy, and they were revamped in a few months, and given more energy. New unit pickers that are being converted on the island that were using oil and now are using gas, they're going to be installed from FEMA money. Tesla units from batteries across the island as well, six units that are going to be installed by the end of this year. So what we've been doing is changing the complete use of oil to a diversified basket of energy, combined cycle, of course, LNG, and batteries as an opportunity to increase energy-based load."

Heinrich interjected, "Chairman, I apologize for going over my time. As I wrap here. I just want to ask for unanimous consent to enter a letter from Governor Guerrero and Governor Apatang regarding deep-seabed mining into the record."

Chairman of the Committee Mike Lee (R-Utah) responded, "It will be admitted without objection."

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