Status of Puerto Rico Electrical System Enhancements Efforts

We reviewed the Puerto Rico Department of Housing’s (PRDOH) Electrical Power System Enhancements and Improvements programs to provide (1) background and funding information, (2) an update on the status of the programs and their progress, and (3) other relevant program information for interested stakeholders including Congress and the public. The U.S. Department of Housing and Urban Development (HUD) provided its grantee, PRDOH, $1.93 billion in Community Development Block Grant Disaster Recovery funds for enhanced and improved electrical power systems in areas impacted by Hurricanes Irma and Maria. PRDOH budgeted most of its $1.93 billion disaster recovery funds for its two main electrical grid programs: (1) $500 million for the Energy Grid Rehabilitation and Reconstruction Cost Share Program (ER1), and (2) $1.3 billion for the Electrical Power Reliability and Resilience Program (ER2). PRDOH launched both the ER1 and ER2 electrical grid programs in 2023, and both programs are in their early implementation stages. As of July 12, 2024, PRDOH had spent less than 1 percent of its total budget for both programs ($179,760 of $1.93 billion). For ER1, PRDOH is working with its partners, Central Office for Recovery, Reconstruction, and Resilience (COR3) and the Puerto Rico Electric Power Authority (PREPA). For ER2, PRDOH opened and closed its competitive application process and expects to award funds by the end of 2024. In addition, on August 5, 2024, it announced 20 ER2 projects and expects to finalize the selection and award of the remaining strategic projects by the end of the first quarter of 2025. PRDOH 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 electrical grid needs in Puerto Rico. As part of our ongoing strategic planning, we will periodically evaluate the status of both the ER1 and ER2 programs to determine how far along they are with their respective timelines, any challenges encountered, and any significant risks that may warrant additional work by HUD OIG.