In 2022, Congress approved a $1 billion Energy Resilience Fund for Puerto Rico, addressing the urgent need on the island. Puerto Rico’s electric grid, known for its vulnerability, had suffered extensive damage from multiple hurricanes. Lawmakers intended for the fund to support rooftop solar and battery systems to provide dependable backup power during emergencies.
The Department of Energy under the Biden administration devised a plan to distribute the funds to approximately 40,000 low-income Puerto Ricans, many of whom rely on consistent power due to health conditions. The strategy envisioned a network of solar and battery systems to protect medically vulnerable residents during storms and lessen dependence on the unstable grid.
The Trump administration, however, took a different approach.
The initiative effectively vanished after President Trump assumed office last year. The Trump administration’s Department of Energy reallocated a significant portion of the funds to the Puerto Rico Electric Power Authority (PREPA), a bankrupt utility managing the island’s grid. These funds are now intended to bolster PREPA’s fossil fuel-reliant power plants, with $50 million earmarked for a new natural gas pipeline. The administration justified this decision by asserting that PREPA’s infrastructure upgrades would ultimately benefit a wider range of the island’s residents.
The manner in which Trump’s DOE redirected the resilience funds, seemingly disregarding Congress’ intent, has been cloaked in secrecy. However, public records and documents obtained by Grist through the Freedom of Information Act reveal how Trump’s political appointees facilitated this shift. The documents indicate that the DOE granted PREPA exceptionally favorable treatment by not seeking competing bids, expediting the review process, and using Trump’s executive order declaring an “energy emergency” as the basis for the award.
One of the most striking aspects of the situation was the DOE’s decision to waive its usual requirement for grant recipients to contribute significant funding to project costs. While exceptions are occasionally made for impoverished recipients or economically distressed areas, large organizations like PREPA — with nearly $4 billion in annual revenue — are typically expected to cover 50 percent of project costs.
In PREPA’s case, the DOE accepted a mere 1 percent cost share, citing the utility’s “significant financial stress” and arguing that waiving the cost-share requirement was “necessary to provide a stable foundation for Puerto Rico to undertake long-term energy planning and repairs.”
Some former agency employees remain unsatisfied with this rationale.
“The 1 percent cost share is potentially unprecedented for a DOE award of this size, and to a recipient with this much cash flow,” commented a former DOE official from the Biden administration, speaking anonymously due to employment concerns. The official noted that such an exception must be authorized by the secretary of energy, Chris Wright, to be legal. “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 from the DOE’s Office for Electricity stated that the agency “carefully evaluated procurement options and determined that a noncompetitive, sole-source award to PREPA was justified” to achieve the energy resilience fund’s goals. The spokesperson acknowledged the “significant” reduction from the standard 50 percent cost share, noting that the decision was made under the Energy Policy Act’s authority.
“PREPA continues to face severe fiscal constraints while maintaining responsibility for critical generation and transmission infrastructure,” the spokesperson explained. “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 appeared aware that its decision to allocate funds to PREPA without considering other applicants — and without seeking congressional approval for reallocating the funds from their intended use — might attract criticism. A section titled “Sensitivities” in a memo from the agency’s Grid Deployment Office head noted that the decision to bypass a 30-day congressional notice period, avoid seeking 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 highlighted that awarding the contract solely to PREPA might raise objections concerning fairness and perceived favoritism. The term “sole source designation” refers to a noncompetitive award to a single vendor.
Puerto Rico’s electric grid has long been known for its fragility. The average resident on the island experienced more than 70 hours of outages in 2024. When Hurricane Maria struck in 2017, over 3 million residents lost power for weeks, with some areas waiting more than nine months for restoration. Following this disaster, Congress allocated more than $17 billion to modernize the grid. Despite this massive funding, nearly a decade later, PREPA has completed very few projects and continues to navigate bankruptcy proceedings since 2017. The redirected resilience funds supplement this earlier allocation. The DOE memo acknowledges these challenges, stating 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 remarked.
Nevertheless, Trump’s DOE determined that PREPA was the most suitable recipient for the funds. The memo argued that even if the agency had conducted a lengthy competitive process — estimated to take 18 months — it would have ultimately selected PREPA because it holds 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,” the document stated.
Last month, over 40 congressional Democrats sent a letter to Secretary Wright seeking an explanation for the agency’s redirection of the resilience funding. The lawmakers requested a briefing to clarify the agency’s rationale for reallocating the 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 stated.
The lawmakers expressed particular concern over the funds being used to build a natural gas pipeline. On its website, the DOE does not explicitly mention funding the pipeline but refers to it as “fuel supply security between San Juan and Palo Seco.” Internal documents, however, clearly indicate that $50 million is allocated for constructing a natural gas pipeline. According to El Nuevo Día, a Puerto Rican publication, local authorities have already been advancing the project to connect power stations in San Juan and Palo Seco, roughly 9 miles apart.
“Trying to impose a liquefied methane pipeline project on the people of Puerto Rico would lock in the need for fuel imports — keeping methane gas prices high for decades, burdening ratepayers with funding it, and increasing already high electricity costs,” the lawmakers’ letter asserted.
