Inside the government’s push to divert Puerto Rico solar funds to a bankrupt utility

Date: 2026-06-18 14:22:40 Source: XHS DevOps News Author: Web Development

When Congress approved a $1 billion Energy Resilience Fund for Puerto Rico in 2022, the money was desperately needed. Multiple hurricanes had battered the island’s notoriously fragile electric grid, and lawmakers envisioned the money supporting rooftop solar and battery systems that could provide resilient backup power during emergencies.

The Biden administration’s Department of Energy developed a plan to distribute the funds to about 40,000 low-income Puerto Ricans, many of whom live with health conditions requiring access to reliable power. Biden officials envisioned a network of solar and battery systems that would keep medically vulnerable Puerto Ricans safe during storms and reduce reliance on the island’s unstable grid.

The Trump administration has different ideas.

The plan all but disappeared after President Trump took office last year. Trump’s DOE has since redirected a large share of the funds to the Puerto Rico Electric Power Authority, or PREPA, the bankrupt utility that operates the island’s grid. The money is now poised to shore up PREPA’s fleet of power plants, which largely run on fossil fuels, and $50 million will fund a new natural gas pipeline. The administration has defended the decision by arguing that PREPA’s infrastructure improvements will ultimately benefit a broader swath of the island’s population.

The process by which Trump’s DOE unilaterally redirected the resilience funds, seemingly against Congress’ intent, has so far been shrouded in secrecy. But public records obtained by Grist under the Freedom of Information Act shed new light on how Trump’s political appointees engineered the change. The documents show that the DOE gave PREPA unusually favorable treatment, in part by soliciting no competing bids for the funds, fast-tracking the review process, and using Trump’s executive order announcing an “energy emergency” as the justification for the award. 

Most eyebrow-raising, perhaps, was the way that the DOE waived its typical requirement that grant recipients pony up substantial funding of their own to contribute to project costs. Exceptions are sometimes made for indigent recipients or economically distressed communities, but for large organizations such as PREPA — which has nearly $4 billion in annual revenue — the agency typically requires a 50 percent cost share. 

In PREPA’s case, the DOE accepted just a 1 percent cost share, noting that the utility was under “significant financial stress” and that waiving the cost-share requirement is “necessary in order to provide a more stable foundation for Puerto Rico to begin to perform long-term energy planning and repairs.”

Some critics who have worked at the agency in the past are unsatisfied with this explanation.

“The 1 percent cost share is potentially unprecedented for a DOE award of this size, and to a recipient with this much cash flow,” said a former Biden administration DOE official, who spoke under condition of anonymity due to concerns it would affect their current employment. The former official noted that in order for such an exception to be legal, it must have been made by the secretary of energy, Chris Wright, himself. “Congress decreed that cost-share waivers are only supposed to be available via a secretarial determination. They weren’t intended to be used often, and they haven’t been.” 

A spokesperson with the Office for Electricity at the DOE said that the agency “carefully evaluated procurement options and determined that a noncompetitive, sole-source award to PREPA was justified” and that achieving the goals of the energy resilience fund required the use of PREPA. The spokesperson acknowledged that the “reduction from the standard 50 percent cost share is significant,” but noted that the determination was made under authority provided by the Energy Policy Act. 

“PREPA continues to face severe fiscal constraints while maintaining responsibility for critical generation and transmission infrastructure,” the spokesperson said. “Requiring a 50 percent cost share would not have been feasible and would have delayed urgently needed grid stabilization and repair activities, undermining the core purpose of the Puerto Rico Energy Resilience Fund.”

The agency seemed well aware that its decision to award the funds to PREPA without considering competing applicants — and without seeking congressional approval for reallocating the funds from their intended use — would likely draw scrutiny. A section titled “Sensitivities” in a memo drafted by the head of the agency’s Grid Deployment Office highlighted that the decision to waive a 30-day congressional notice period, not seek other bids, and “the cost-share reduction may generate negative commentary, as the initial monies were planned to fund solar installations for multi-family housing (limited to common areas), community-based healthcare facilities.” The memo also went on to state that the “sole source designation to PREPA may raise objections to fairness, and perceived undue favoritism.” (“Sole source designation” is the term of art for a noncompetitive award to a single vendor.)

Puerto Rico’s electric grid has long been fragile. The average resident on the island experienced more than 70 hours of outages in 2024. When Hurricane Maria made landfall in 2017, the island’s more than 3 million residents lost power for weeks. It took PREPA more than nine months to restore power to some parts of the island. In the aftermath of the deadly disaster, Congress allocated more than $17 billion to modernize the grid. But almost a decade later, PREPA has completed very few projects with that massive influx of funding, and the utility has continued to navigate bankruptcy proceedings since 2017. The resilience funds being redirected to PREPA are in addition to this earlier allocation. The DOE memo acknowledges these issues, noting that “all parties involved are in less than desirable financial condition.” 

“It is really surprising that DOE would plan to send these sums to PREPA itself, given its record of federal spending,” the former Biden administration official added.

Still, Trump’s DOE came to the conclusion that PREPA was best suited to receive the funds. The memo argued that even if the agency had undergone a time-consuming competitive process — one that would have taken 18 months — it would have ultimately selected PREPA because the operator has sole ownership of the island’s grid. “Given the urgency of the situation, there is no other entity in Puerto Rico with the breadth of capability, asset ownership, and legal mandate to execute energy emergency response, grid stabilization, and recovery projects at this scale,” according to the document.

Last month, more than 40 congressional Democrats sent Secretary Wright a letter demanding to know why the agency had redirected the resilience funding. The lawmakers asked for a briefing that would detail the agency’s justification for moving funds to PREPA. 

“DOE’s lack of transparency, wasteful reuse of the funding, disregard for congressional intent, and potentially illegal cancellation of contracts — combined with the resulting increase in energy poverty and loss of energy security — raise serious questions about the Department’s uses of the Puerto Rico-Energy Resilience Fund,” the letter said. 

The lawmakers were particularly concerned about the funds being used to build a natural gas pipeline. On its website, the DOE does not detail funding of the pipeline directly but instead refers to the project as “fuel supply security between San Juan and Palo Seco.” In internal documents, however, the DOE plainly notes that it intends to allocate $50 million to construct a natural gas pipeline. According to reporting in El Nuevo Día, a Puerto Rican publication, local authorities have already been working on building a natural gas pipeline connecting power stations in San Juan and Palo Seco, which is about 9 miles away. 

“Trying to force a liquefied methane pipeline project onto the people of Puerto Rico would help lock in the need to import fuels — keeping methane gas prices exorbitant for decades to come, putting ratepayers on the hook for funding it, and adding to already astronomical electricity costs,” the lawmakers’ letter reads. 

This story was originally published by Grist with the headline Inside the government’s push to divert Puerto Rico solar funds to a bankrupt utility on Jun 17, 2026.

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