Governor to US Senate panel: Island is making major economic strides

Gov. Pedro Pierluisi, at right

Stresses vital role of federal reconstruction aid, urges Congress to enable the resolution of Puerto Rico’s political status

By The Star Staff

Gov Pedro Pierluisi Urrutia told members of the U.S. Senate Committee on Energy and Natural Resources on Thursday that Puerto Rico’s outlook is one of economic progress and optimism following debt restructuring and reconstruction works and urged for a resolution of the status issue.

“I am pleased to report that Puerto Rico has entered a new era of economic progress and optimism. Since last year’s hearing, much work has been done toward the reconstruction and recovery of our island and there is great momentum as we continue to move forward,” Pierluisi said. “We successfully restructured the government’s debt to sustainable levels, our economy grew 4% last year, we are strategically employing federal funding across the island, and government revenues are surpassing estimates. In fact, all economic indicators have consistently been on the rise during the past two years; we have 150,000 additional jobs since 2021, the labor participation rate has increased by 5 percentage points, we now have the lowest unemployment rate in our history, and we are expecting similar figures for 2023.”

At the start of the hearing, Committee Chairman Joe Manchin said regarding Puerto Rico that its recovery must be powered by a reliable and affordable energy grid.

“I am frustrated by the slow progress, but am hopeful that the change in the operation and management of PREPA’s generation and transmission assets will bring transparency, modernization, and cost savings,” Manchin said. “I look forward to hearing from you today about where that recovery stands. It’s critical that investments made can deliver real benefits today and tomorrow and that there is the capacity on the ground to maintain this infrastructure going forward.”

Regarding debt restructuring, and after years of delays, Pierluisi, who started his tenure in 2021, said the government has completed the debt restructuring of most entities in bankruptcy except for the Puerto Rico Electric Power Authority.

The island government published the financial statements for the years 2018, 2019 and 2020 and during this year will release those corresponding to 2021 and 2022, he noted.

Five years after hurricanes Irma and Maria, after the start of the COVID-19 pandemic, and five months after Hurricane Fiona passed through the island, the disbursement of federal funds for the reconstruction of Puerto Rico has been pivotal, the governor told the senators.

Pierluisi noted that the Central Office for Recovery, Reconstruction and Resiliency (COR3) has made great strides, even after Hurricane Fiona. He said COR3 has disbursed more than $954 million for permanent works, which represents a major difference ($801 million) from the $153 million disbursed between 2017 and 2020.

In fact, he said, as of the end of last year, more than 2,400 projects were in the construction process and in 2022 alone more than $1.4 billion was disbursed. Pierluisi estimated that this year close to $2 billion in funds will be disbursed for permanent reconstruction work. A COR3 program that the governor highlighted was the Working Capital Advance, which since its creation in July of last year has disbursed more than $716.4 million that has impacted 650 permanent works projects.

Regarding the funds of the Community Development Block Grant Disaster Recovery program, of the $10 billion allocated to Puerto Rico, more than $7.2 billion has already been obligated. Disbursements have increased from $152 million in 2020 to more than $1.5 billion by the end of 2022.

“This represents a 377 percent increase in obligations and an 893 percent increase in disbursements,” the governor said.

On Tuesday night, during his State of the Union message, President Joe Biden, who visited the island after Hurricane Fiona, reiterated that he is supporting Puerto Rico in its long-term reconstruction. Biden entrusted the U.S. Department of Energy (DOE) with supporting the island in the process of transforming its energy system into a resilient one.

Regarding the latter, the governor told the senators that Puerto Rico is moving toward that purpose, with among other efforts the inclusion of private operators for the transmission and distribution of electric power, as well as for the operation and maintenance of generation plants.

“The Puerto Rico Energy Bureau has approved more than 142 reconstruction projects whose value amounts to more than $8.4 billion, while the Federal Emergency Management Agency has cleared the way for 93,” Pierluisi said. “In addition, more than 68,000 rooftop solar systems have been interconnected to our electrical grid and we anticipate that these interconnections will increase to more than 2,000 each month.”

Some 845 megawatts of renewable energy and another 200 of battery storage will also be integrated into large-scale projects, the governor added.

Last week, Pierluisi and DOE Secretary Jennifer Granholm announced that the island Housing Department and the Puerto Rico Medical Services Administration signed a collaborative agreement to build an electrical microgrid at the Puerto Rico Medical Center in San Juan, the first project of the Energy Reliability and Resilience Program, or ER-2.

Once again Pierluisi insisted to Congress that they assert the foundations of North American democracy by respecting the votes of most of the citizenry in the latest status plebiscites and resume what was outlined in House Resolution (HR) 8393 containing non-colonial and non-territorial options.

Last December, the U.S. House of Representatives, in a bipartisan vote, passed the Puerto Rico Status Act, HR 8393, to authorize a plebiscite that, once and for all, would resolve the century-long political status question that hinders progress and economic development on the island, the governor noted. HR 8393 provides that on Nov. 5, 2023, the 3.2 million American citizens residing in Puerto Rico would be able to choose among the following non-territorial political status options as alternatives to the current territorial status: independence, sovereignty in free association, or statehood, he said.

President Biden, Pierluisi said, expressed support for the bill by stating: “For far too long, the residents of Puerto Rico -- over 3 million U.S. citizens -- have been deprived of the opportunity to determine their political future and have not received the full rights and benefits of their citizenship because they reside in a U.S. territory.”

“The people of Puerto Rico have repeatedly voted to end the island’s current territorial status, and an absolute majority of them want Puerto Rico to become a state of the Union,” the governor said. “For far too long, the U.S. Senate has looked the other way to avoid righting the colonial nature of Puerto Rico’s status. This is an affront to the American democratic values that hundreds of thousands of Puerto Rican soldiers have defended around the world while wearing the Stars and Stripes on their arm alongside their fellow Americans. If you believe in equality, you cannot expect the American citizens in Puerto Rico to consent to discrimination and unequal treatment. It is up to this new Congress to show Puerto Rico, our fellow citizens of the states, and the world that the democratic principles of equality professed by our nation apply to all American citizens. As governor of Puerto Rico, I will continue to demand equal treatment for my constituents until they have it.”