A recent federal audit found that federal bureaucracy rather than the Puerto Rico Electric Power Authority deserves the blame for the continuing delays in rebuilding the territory’s electric grid.

Although the Federal Emergency Management Agency finalized a $10.5 billion fixed-cost estimate on Sept. 23, the agency was still drafting the rules for several remaining needed to award the contracts more than three years after the damage inflicted by Hurricanes Irma and Maria.

The report issued by the United States Governmental Accounting Office said Puerto Rico’s electric grid remains vulnerable to outages from future hurricanes.

“We continue to believe that without clear written information, local entities may continue to face challenges developing and initiating projects, consistent with recommendations we made in October 2019,” the GAO said.

The GAO issued a report 13 months earlier in October 2019 making recommendations to FEMA and the U.S. Department of Housing and Urban Development for steps to expedite the grant-making process.

“Meanwhile, such challenges may contribute to further delays in rebuilding the grid, leaving it vulnerable to future severe weather events,” the GAO said.

FEMA, part of the U.S. Department of Homeland Security, said in its response to the GAO that the report did not contain any specific new recommendations for DHS to follow.

HUD said in its GAO response that the department must rely on technical advice from the Department of Energy, FEMA, and other federal agencies in order to publish a Federal Register notice for grant eligibility.

However, GAO pointed out that local governments and agencies in Puerto Rico are in a difficult position in waiting for funding under HUD'S Community Development Block Grant-Disaster Relief program.

“Local entities risk spending resources for consultants to develop and design projects that ultimately may not be eligible for funding, or where project cost may exceed available funding,” GAO said.

GAO said, “Neither FEMA nor HUD have approved any long-term grid recovery projects, and both agencies need to implement recommendations to address funding uncertainties.”

FEMA finalized the fixed-cost estimate at $10.5 billion after subtraction of insurance payments and a 10% local cost share.

It lists seven asset categories: distribution lines and streetlights, $5.5 billion; transmission lines and soil stabilization, $2.6 billion; water-related expenses such as sediment removal for reservoirs and repairs to dams and hydroelectric plants, $861 million; substations, $782 million; internal telecommunications across PREPA assets, $686 million; construction and improvements to buildings, $125 million; generation plants, $109 million.

The GAO said that the $10.5 billion from the FEMA Public Assistance (PA) program might cover only about half of the $20.3 billion identified in Puerto Rico’s Grid Modernization Plan as necessary to repair the grid and make it more resilient.

“To fully implement the resilience improvements identified in that plan, Puerto Rico will need to identify additional funding sources,” the report said.

“FEMA officials we interviewed told us that PA funding may not fully fund these projects,” said the GAO. “Specifically, according to FEMA officials, projects that restore infrastructure to comply with industry standards will be eligible for PA funding, but resilience improvements that may improve grid performance—but go beyond these industry standards—will not be covered.”

In addition, GAO said that HUD has not provided key information to local entities on the conditions for using Community Development Block Grant-Disaster Relief funds for grid recovery. HUD “has not established time frames and a plan for issuing this information, as we recommended in October 2019,” GAO said. “Local and federal officials have deemed these funds critical to supporting grid recovery projects, given PREPA’s financial challenges. Until HUD and FEMA implement our recommendations, uncertainty will linger about how and when long-term grid recovery will proceed.”

The Financial Oversight and Management Board for Puerto Rico issued a statement emphasizing the importance of federal grants in rebuilding the electrical grid.

"FEMA funds are of great importance for the reconstruction and transformation of the power grid in a modern and resilient system, which is vital for the economic development of PR," the board said. "We will provide any support to local and federal agencies to ensure the efficient deployment of investments in total compliance with federal laws and regulations."

The office of Puerto Rico Gov. Wanda Vázquez Garced did not respond to a request for comment.