Puerto Rico Power: Diagnosed, Funded, and Still Failing

Puerto Rico's grid has been diagnosed, funded and planned for nine years, and it is still failing the people who pay for it.

In September 2017, I flew in on one of the first commercial flights to reach the island after the storm. With me was Col. Tom Bright, USMC (Ret.), our chief operating officer. The airline let us bring every bag we could load and carry, filled with Meals, Ready-to-Eat and supplies.

My firm had built the Haitian National Police headquarters in Cap-Haïtien, Haiti, as a subcontractor to DynCorp International under a U.S. State Department contract. We also held a construction-management contract with the General Services Administration. That experience gave us the confidence to go to Puerto Rico after Hurricane Maria, bring what help we could, and see where our firm could support the recovery.

We reported to the emergency operations center in San Juan. Leonardo "Leo" Torres, deputy director of the Puerto Rico Infrastructure Financing Authority, was stationed at the door. I believe that he, like many there, had not gone home in days. He questioned everyone coming and going, gathering whatever information they carried. He asked us to drive to Aguadilla, on the island's northwest tip. The government had no word from it.

We drove west from San Juan through the mountains. Every tree on every hillside had been stripped of every leaf. Nearly every power pole was snapped, and the lines lay on the ground. I build for a living. I was not looking at a grid that needed repair. I was looking at one that would have to be rebuilt.

In Aguadilla, we brought cases of military Meals, Ready-to-Eat to the Veterans Affairs clinic and handed them to the clinic's medical director. The trees around it were bare, and the building beside the lot was gutted. Later we inspected El Yunque and the east side of the island. We found the same thing there.

The grid came back, but it never came back whole. In San Juan, I lived through outages that arrived on a schedule, four or five hours at a time, sometimes nearly the whole day.

Disclosure: I have been involved in construction and real estate development in Puerto Rico since 2017.

At 8:11 p.m. on Sept. 23, 2026, faults began on 115-kilovolt lines at the Sabana Llana transmission center in Carolina, operated by LUMA Energy. Equipment caught fire. By 10 p.m., 217,091 customers were in the dark.

LUMA's chief executive said the substation's protection system failed to contain the fault. The transformer involved was one of the old ones, she said, more than 60 years old.

That night tells the whole story in miniature. The federal government has obligated about $14.3 billion to rebuild Puerto Rico's grid since 2017. As of early 2026, about 25% had been disbursed. As of December 2025, nine of 258 large FEMA-funded projects were complete.

Each usual explanation names a single villain: LUMA, the bankrupt utility, Washington, or corruption. Each carries some truth. None explains why the same failures keep repeating after they were diagnosed and paid for.

The record points somewhere less satisfying and more fixable. Puerto Rico's grid has everything but an owner. Responsibility is split among more than a dozen public and private entities, in San Juan and in Washington. No single one is accountable for turning approved money into finished, coordinated work. The scandals of the past year grew in the gaps between them.

The regulator named the grid's core weaknesses more than three years ago. Large blackouts keep happening.

On April 6, 2022, an oil circuit breaker failed at Costa Sur's 230-kilovolt switchyard while a generating unit was being connected. It threw burning oil across the yard. Costa Sur and EcoEléctrica dropped off the grid. The entire island went dark 19 seconds after the first fault. The switchyard's oil breakers dated from about 1969 to 1976.

In May 2023, the Puerto Rico Energy Bureau adopted LUMA's root-cause analysis, validated by the Electric Power Research Institute. Its central finding: a breaker failure is not unusual, but its cascade into a full blackout is. The Bureau found:

The Bureau said it would implement EPRI's recommendations in a separate proceeding.

Since then:

The April 2025 report, issued Sept. 21, 2026, found LUMA's aerial patrol had flown that line five days earlier and missed the vegetation. It also cited design flaws inherited from PREPA.

The money exists. About three-quarters of it has not reached the grid.

GAO, data as of December 2025 (FEMA) and February 2026 (HUD, DOE).

The nearly identical rates across three agencies point to a system problem, not one bad actor.

The usual explanation is that FEMA pays only after work is done, and a bankrupt utility cannot front the cash. That was true once. Since July 2022, FEMA and Puerto Rico's recovery office have advanced 25% of a project's obligated funds up front, with more available as the first tranche is documented.

The bottleneck moved. Projects stall before the money, while scopes of work go back and forth with FEMA. They stall after it, while spending is documented to unlock the next advance. In July 2025, PREPA told regulators LUMA had about $345 million in FEMA reimbursements and about $570 million in advances still outstanding. FEMA has denied some LUMA reimbursements, and the two dispute whether LUMA's own crews' work qualifies.

The federal side has its own failures. All 14 FEMA staff doing environmental reviews for grid projects were temporary. Turnover rose from 3% in 2021 to 19% in 2024. FEMA's own analysis shows it is eight reviewers short.

The results are concrete. A $789 million advanced-metering project was 0% complete in December 2025, though advance funds had gone out. One of 32 FEMA-funded substation projects was finished. About 400 of 16,000 planned miles of lines had been cleared of vegetation with federal money. Vegetation causes about half of all outages.

COR3 officials told GAO that streetlight projects move faster than high-priority transmission lines, because they are easier to get approved.

The grid is not an exception. By the Puerto Rico government's count, Washington had allocated more than $83.8 billion to rebuild the island after Maria as of December 2023. The grid's share is about one-sixth. The rest of the recovery moves no faster:

Totals vary with who is counting and what they include. The last independent tally, by the Center for a New Economy, found 29% of allocated funds spent as of March 2021. Puerto Rico has until 2029 to spend the HUD money.

When money passes between agencies, the record breaks. FEMA pays 90% of most Maria rebuilding projects. Puerto Rico can pay its 10% share with HUD disaster grants. In an audit released Oct. 8, 2026, HUD's inspector general found Puerto Rico could not support 49 of the 74 matching payments it tested. The records were duplicative, incomplete and inaccurate, and the inspector general traced the problem to inadequate internal controls. It asked HUD to require Puerto Rico to support or repay $47.8 million.

The money has not bought growth. Counting the hurricanes, the earthquakes and the pandemic, the Oversight Board reported in October 2026 that more than $118 billion has been made available through major federal recovery programs. About $62.2 billion has been paid out, and $56.2 billion is still available. Yet the island's economic activity index fell 0.2% in the first nine months of fiscal 2026. The Board warned that federal funds "may be masking underlying weaknesses in the Puerto Rico economy." Power that costs too much and fails too often is one of them.

Each piece of the grid has an owner. Many hold a veto. No one holds the whole job.

The governor comes closest to being in charge. She appoints most of the people who run these agencies. But her power stops at three walls. The Oversight Board, created by Congress in the 2016 PROMESA law, must approve budgets and large contracts. The private operators answer to their contracts, not to her. The Energy Bureau is independent by law.

PROMESA added power without responsibility. The Oversight Board can block a budget, a contract or a debt deal. It does not operate the grid, and Puerto Rico's voters cannot remove it. In the Power Expectations case, described below, the Board revoked the contract once it was told of the problem. It could stop a bad deal. It could not deliver a good one.

In January 2025, Gov. Jenniffer González Colón created an Office of the Energy Czar by executive order. She named Josué Colón, who also runs P3A. Its mandate is to align goals, supervise the operators and speed recovery. Critics note the office was never created by law. Reporting on the executive order suggests it does not grant the czar power to contract or appoint.

The result is a leadership role without the legal authority to lead. The powers to plan, approve and pay sit elsewhere.

GAO found no formal mechanism coordinating federal and Puerto Rico agencies. DOE had stopped coordination meetings in March 2025. In July 2026, the Oversight Board asked which government entity coordinates the island's many generation procurements. As of mid-August, the Board said it had no answer.

DOE has now agreed to sign a new interagency agreement and form a monthly coordination group by Dec. 31, 2026.

Puerto Rico's generating fleet is dominated by oil-fired plants built half a century ago.

Palo Seco's Units 1 and 2 entered service in 1960 and 1961; Units 3 and 4 in 1970. Costa Sur's Units 5 and 6 date to 1972 and 1973. After the late-1970s plants, including Aguirre, no new generation was added until the late 1990s. In 2016, PREPA told Congress its median plant age was 44 years, against 18 for the U.S. industry.

The fleet shows its age. Local reporting on a LUMA analysis in September 2026 put typical real-time available generation near 3,200 megawatts, about half of the more than 6,500 megawatts installed. A review commissioned by the Oversight Board in November 2025 found spending at Genera's plants had not improved reliability. It called for total plant teardowns and full unit replacement.

Petroleum and diesel made up about 62% of generating capacity. Wind and solar supplied about 4% of power in 2025. A 2025 law dropped the island's interim renewable targets, kept the goal of 100% renewable power by 2050, and extended coal use through 2032.

The fuel is two problems. The older steam units burn bunker C, the heaviest and dirtiest fuel oil, under an EPA consent decree. When gas runs short or baseload units fail, the system burns diesel, which is cleaner but far more expensive. That is a large part of why Puerto Ricans have paid more since Oct. 1.

The government's answer is converting plants to natural gas. It is cleaner and cheaper than oil, but the northern plants depend on a single LNG terminal in San Juan, run by one company. When New Fortress Energy's deliveries were interrupted from Sept. 16 until a tanker docked in mid-October, the system burned more diesel. The extra fuel cost in under a month was estimated at about $32 million.

The age is not only in the plants. The Sabana Llana transformer that failed was more than 60 years old.

When no one owns the whole, deals fall apart in the gaps. Two did this year.

A $5.9 billion contract signed on disputed authority. In March 2025, the Energy Bureau ordered emergency temporary generation for a 700- to 850-megawatt shortfall. The procurement was run by the Third-Party Procurement Office, a private firm under contract to P3A. PREPA did not send the resulting contract to the Oversight Board until Jan. 16, 2026, about six months after selection.

On June 10, 2026, PREPA signed a 10-year, $5.887 billion contract with a consortium of Power Expectations, Enchanted Rock and Reyes Contractor. The deal was for 400 megawatts of temporary units at Aguirre. The Board had approved it largely because Enchanted Rock would supply the equipment.

Enchanted Rock's parent later told the Board its name and signature were used without authorization. Power Expectations says it was authorized to designate a signer for Enchanted Rock.

The government's own lawyers knew of the allegations by mid-June. PREPA's director says she learned at a July 29 meeting. The Board says it learned on Aug. 7. It revoked its approval on Aug. 14, ordered the contract terminated and referred it to law enforcement.

The energy czar has testified that the FBI and Puerto Rico's Justice Department interviewed him. The Government Committee of Puerto Rico's House of Representatives is preparing referrals and is weighing whether he committed perjury. No one has been charged. Colón has said he did not withhold the allegations from PREPA's director. Power Expectations denies wrongdoing and has sued.

A gas supply interrupted. New Fortress Energy runs the only LNG terminal in San Juan. Its subsidiary Genera runs the plants that burn its gas. After the Energy Bureau ordered an audit of New Fortress invoices, deliveries were interrupted for nearly a month. The procurement office referred the matter to federal prosecutors, saying it drew no legal conclusions. The government is now claiming about $100 million from New Fortress, and the dispute is unresolved.

Neither case shows the system was designed to be corrupt. Both show what happens when vetting, oversight and leverage belong to no one in particular.

The people of Puerto Rico pay more for worse power than almost any Americans.

Since Oct. 1, residential customers have paid a record 33.58 cents per kilowatt-hour, above the previous high set in July 2022. The U.S. residential average is 18.3 cents. A typical 800-kilowatt-hour bill rose from about $229 to $271 a month. Businesses get no relief: Puerto Rico's industrial customers paid nearly the same rate as households in 2024.

In 2025, the average customer lost power for about 36 hours outside major storms, and 23 more during them. Mainland customers average about two hours outside major events. Excluding major storms, the number of interruptions per customer doubled between 2021 and 2025.

Outages are not merely an inconvenience. Officials have warned they endanger people who rely on oxygen, refrigerated insulin and dialysis. Community pharmacies now warn that power costs could force them to close.

Puerto Ricans pay twice: once on the bill, and again for generators, fuel, spoiled food and lost business.

Those who can afford it are buying their own backup. About 1,450 megawatts of rooftop solar has been installed, roughly one-fifth of the island's generating capacity. In January 2026, DOE canceled up to $350 million in grants meant to bring rooftop solar and batteries to about 12,000 low-income families. The families who could least afford outages lost a program built to protect them.

No contractor would run a job this way. A project this size needs one owner, one schedule and one critical path.

Bury what can be buried. Wherever practicable, new lines should go underground. Start with distribution lines in dense coastal and urban areas, and the feeders that serve hospitals and water plants. Underground lines are not invulnerable. The Dec. 31, 2024, blackout began with an underground cable failure, and buried lines can flood and take longer to repair. Where burial is not practical, as with most high-voltage transmission across the mountains, lines should be rebuilt to withstand the strongest hurricanes.

The objection is cost. Maintaining 1960s steam units is expensive, and they face EPA limits. That is why the reserve should be selective. But the government itself says the fleet needs more than 5,000 megawatts to hold about 700 megawatts in reserve. A grid that can lose a plant without going dark needs spare capacity somewhere.

This section is my opinion.

The structure that has failed to rebuild Puerto Rico's grid for nine years will not finish the job. The grid needs one authority with the power, and the money, to do it. Six points make the case.

Washington is already paying. Federal agencies have obligated about $14.3 billion for the grid, most of it from a $9.6 billion FEMA grid award the Trump administration announced in 2020. Ratepayers pay for fuel, operations and debt. A reconstruction funded in Washington and run in San Juan had finished nine of 258 large FEMA projects.

The owner is bankrupt. PREPA has been in court since 2017 and cannot borrow. Its bondholders claim about $8.5 billion. Any new plant built on PREPA's land, under PREPA's name, risks being pulled into that case.

Authority is fractured, and politics fractures it further. More than a dozen public and private entities each own a piece of the grid. Opposition mayors have alleged for years that the central government steers discretionary money by party. Successive administrations have denied it.

The money is there. The authority to use it is not. About $10.7 billion of the $14.3 billion obligated for the grid has not been paid out. FEMA has approved about $2.1 billion more for the grid that it has not yet obligated. GAO also reports that PREPA may be able to access up to $7.6 billion in FEMA hazard-mitigation benefits, of which about $661 million has been obligated. Together, that is as much as $20 billion in federal grid money not yet spent, and about $9 billion of it is not yet committed to any project. FEMA's main program pays to restore and harden what Maria damaged. More than 90% of its grid funding was set for transmission, distribution and substations, and about 1% for repairing the old plants. It was not designed to build new plants, and whether its flexible-spending rules could reach new generation is unsettled.

Fuel, not debt, drives the bill. Since Oct. 1, residential customers pay a record 33.58 cents per kilowatt-hour. In the last published breakdown, fuel and purchased power made up about two-thirds of the rate. The 1970s steam units burn far more fuel per kilowatt-hour than a modern combined-cycle gas plant.

By my estimate, a modern gas plant the public did not have to finance could generate power for about 7 to 10 cents a kilowatt-hour, assuming delivered gas at $10 to $14 per million Btu. With grid, pension and other charges unchanged, residential rates would fall to roughly 18 to 21 cents, close to the mainland average of 18.3 cents, before any new charge from PREPA's debt case. That would not make Puerto Rico's power cheap for manufacturers. It would make it ordinary, and reliability matters to them as much as price.

The plants are affordable within the money already appropriated. New combined-cycle plants on the mainland now cost more than $2,000 per kilowatt. At that price, 3,000 megawatts, the government's own procurement target, would cost roughly $6 billion to $7.5 billion, likely more on an island. That would use most of the roughly $9 billion that FEMA has approved or made potentially available for the grid but not yet committed to projects, leaving the grid work already underway funded. Building on northern sites such as Palo Seco and San Juan, near the load, would also reduce the need for new north-south transmission.

Advocates have argued for years that Puerto Rico should rebuild around rooftop solar and batteries instead. In 2023, environmental groups sued FEMA, arguing it was spending billions to rebuild an unreliable grid without weighing those alternatives. They have a point. About 1,450 megawatts of rooftop solar now protects the homes and businesses that have it. But hospitals, water plants and factories need firm power around the clock. Modern gas plants can provide it now. Solar and storage should complement them, not replace them.

Washington's own direction has changed with each administration. In 2023, six Democrats in Congress urged DOE to spend its Puerto Rico money on solar and storage. In 2025 and 2026, DOE redirected $365 million away from rooftop solar and canceled up to $350 million more. The money waited while the policy changed. An authority with a fixed mandate and a fixed term would not change course every four years.

The powers already exist. They are scattered. No one today has the authority to take charge of the whole job. But the pieces of that authority already sit in federal law, held by three different entities.

The Department of Energy holds emergency power over operations. Since May 2025, it has issued emergency orders under the Federal Power Act directing PREPA to run specific generating units and clear vegetation along key transmission lines. The governor credits them with restoring or refurbishing close to 1,600 megawatts. But the orders are short-term and must be renewed. They cannot build a plant, move FEMA money or cancel a contract.

The Oversight Board holds a permitting override it rarely uses. Title V of PROMESA lets its Revitalization Coordinator designate energy and infrastructure projects as "critical." Every Puerto Rico agency involved must then produce an expedited permitting process within 20 days. Critical projects must be prioritized even where permitting authority has been delegated to a municipality. The Board's own coordinator testified that beyond expediting individual projects, Title V offers few other tools. It can speed a permit. It cannot fund, build or run anything.

FEMA holds the money, under rules built to restore what Maria damaged.

The Oversight Board, created by Congress, shows the limit of an entity built mainly to say no. It revoked the Power Expectations contract once it learned of the problem, but it has never been responsible for delivering a finished grid. The authority Puerto Rico needs is the opposite: one entity that holds the operating power, the permitting power and the money, and answers for the result.

Congress should create a Puerto Rico Grid Authority with a fixed term:

This asks Congress for authority, not new money.

The strongest objection is consent. Puerto Ricans cannot vote for the president who would nominate this authority's head.

But that objection assumes Puerto Rico's government holds sovereign authority of its own. It does not. Puerto Ricans elect their governor and legislature, yet in 2016 the Supreme Court held in Puerto Rico v. Sánchez Valle that the island's power to govern ultimately derives from Congress, not from a separate sovereignty. Congress can override that government, and did when it created the Oversight Board in 2016, a board many Puerto Ricans deeply resent. In practice, the government in San Juan is provisional: it governs by Congress's leave until Congress settles the island's status. The consent problem is real, but a grid authority would not create it. It already exists. As I argued in "Puerto Rico has asked. Congress should answer yes," the lasting answer is statehood.

I take the objection seriously. But consent also means a government that can deliver what its people pay for. Puerto Ricans have elected leaders and no reliable power. The governor's concurrence and a fixed term would keep this authority answerable to the island, and temporary.

The grid's condition is nine years in the making and belongs to many administrations, in San Juan and in Washington. LUMA's contract was signed in 2020 under Gov. Wanda Vázquez Garced and extended in 2022 under Gov. Pedro Pierluisi. Federal grid aid was approved under President Trump in 2020 and has moved slowly under Presidents Biden and Trump since.

But the structure is a present choice, and three sets of officials can change it.

What to watch:

In 2017, I drove west from San Juan past snapped poles and lines lying on the ground. Drive those roads today and nearly every pole has been replaced, the lines restrung and the service lines reconnected. The grid Maria knocked down was rebuilt the way it stood: on poles, in the wind.

Nine years, $14 billion and more than a dozen agencies and contractors later, the people paying for Puerto Rico's grid still cannot hold any one of them to account. They pay on their bills, and they pay in the dark.

For the aid and benefit of the people of Puerto Rico, it is time for the governor, the president and Congress to act.