PREB issues call for update on FEMA-funded projects
- The San Juan Daily Star
- 2 hours ago
- 2 min read
Says grid operators’ joint plan deviates from original allocation
By THE STAR STAFF
The Puerto Rico Energy Bureau (PREB) ordered the Puerto Rico Electric Power Authority (PREPA), LUMA Energy and Genera PR to provide detailed reconciliation plans and update their FEMA-funded project lists, after determining that the consolidated reconstruction plan submitted last year deviates sharply from the Federal Emergency Management Agency’s (FEMA) original damage-based funding allocation and puts ratepayers at financial risk.
In a six‑page order last week, the regulator said the Consolidated FEMA Accelerated Award Strategy (FAASt) Project List submitted by PREPA on Aug. 8, 2025 -- and jointly developed with LUMA and Genera -- significantly underfunds transmission and distribution (T&D) work while dramatically increasing the allocation to legacy generation assets.
According to the PREB, FEMA allocated some $10.7 billion in 2020 to address documented hurricane-related damage across PREPA’s system, with 91% assigned to T&D, substations, buildings and telecom infrastructure; 8% to water assets; and only 1% to generation. But the Consolidated List submitted last year reduced the number of active LUMA-managed T&D projects from 571 to 282, leaving 289 projects inactive despite some $402 million in incurred costs.
The PREB said the new distribution “materially deviates” from FEMA’s original allocation and exposes Puerto Rico to long-term risks if damaged assets remain unrepaired. Under FEMA rules, assets not repaired under the current award may be ineligible for future assistance -- potentially requiring local funding, including increases to electricity rates.
To correct the discrepancies, the PREB ordered PREPA, LUMA and Genera to submit detailed implementation plans within 15 days.
Among the requirements: Genera must identify how much funding can be reclassified from Section 428 (fixed-cost) to Section 406 (mitigation) and provide a timeline for completing the reconciliation. LUMA must specify how much funding can be recaptured by eliminating duplication among projects and equipment procurements, while confirming that no additional damaged T&D assets have been omitted. PREPA must provide updated design and construction timelines for each project and confirm mitigation estimates, and must also amend the Consolidated Project List to reactivate priority T&D projects identified in Attachment A of the order.
The PREB emphasized that the selection of those projects stems from technical readiness, incurred costs, and their alignment with LUMA’s prioritization model.
The PREB’s financial analysis suggests that a combination of reserve allocation and Section 406/428 reconciliations could free more than $1.9 billion for reactivating priority T&D projects.
Among the identified opportunities, up to $1.3 billion could be reclassified to mitigation funding based on preliminary evaluations of generation-related measures, and an additional $850 million could be released through T&D mitigation adjustments and elimination of duplicated funding -- for example, $54.4 million associated with the Monacillos and Costa Sur substations alone.
The corrections would move the funding distribution closer to FEMA’s original FAASt settlement and allow PREPA and LUMA to resubmit inactive projects for FEMA approval, the PREB noted.