FOMB, New Fortress Energy Threaten Puerto Rico’s Effort to Install Lifesaving Rooftop Solar Power

The good news from Puerto Rico is that in the seven years since Hurricane Maria devastated the island’s electrical system, the number of rooftop solar panels has increased significantly. From 8,000 rooftop installations in 2017, there are now over 117,000 (almost 10% of households on the island) with a total generating capacity of 813 megawatts (MW). New installations are added on average over 3,000 per month – and are largely implemented without any subsidies.

Residents and community organizations in Puerto Rico have stepped up to install new solar energy systems to provide a lifesaving supply of electricity. These efforts are urgently needed because the wide range of federal, local, and private entities supposedly responsible for Puerto Rico’s electric system have failed; today’s system is more fragile and less reliable than it was before Hurricane Maria.

Puerto Rico’s renewable energy push is legal, affirmed by the Financial Oversight and Management Board (FOMB) in previous budgets, and approved through a rigorous planning process by the Puerto Rico Office of Energy. This consensus was built through painstaking efforts to unite the organization. The island’s energy company has gone bankrupt and continues to fail to balance its budget. Last year, fuel and purchased energy (oil, diesel, coal and gas) consumed 71% of the budget. Renewable energy is essential to stabilize costs and ensure budget balance.

However, the two biggest threats to renewable energy in Puerto Rico right now are: (1) the FOMB’s efforts to eliminate net metering and (2) aggressive pressure from New Fortress Energy (a privatized operator of a select generation system under questionable circumstances) to sell more gas to the island earth.

Under Puerto Rico law, net metering – a policy under which residential solar installations can receive a credit equal to the retail rate for electricity exported to the grid – was to remain in effect until 2024, when Puerto Rico’s Office of Energy was to conduct a policy impact study with possibility of introducing changes. At the end of 2023, the legislature extended net metering until 2030; the law was signed by Governor Pedro Pierluisi in January 2024.

Law recognized the importance of the existing net metering structure in supporting the ability of home and business owners to pay for rooftop solar installations. The law made this clear rooftop solar and storage installation is currently the only way to family and enterprises can isolate themselves from a constantly unreliable and fragile network.

However, in April and then again in May, the FOMB told the Puerto Rican government that this new law was inconsistent with the approved budget plan. The board argued that the new law constituted political interference in the operations of the island’s public utility and was not supported by sound fiscal analysis. It is clear from the board’s letters and prior budget plan that the board would prefer net metering to be weakened.

However, FOMB’s letters from its general counsel and executive director missed a crucial point: the large increase in the number of rooftop solar panels in Puerto Rico. The public is installing solar panels on its own because, almost eight years after the creation of the FOMB, none of the responsible authorities have been able to ensure a sufficient supply of electricity for Puerto Rico’s residents and businesses.

According to official calculations by the Puerto Rican government, 2,975 people died as a result of Hurricane Maria in 2017. The FOMB response is to thoughtlessly ignore this fact.

It is truly unfortunate that the FOMB views recent legislative action as “political interference.” This reflects the inability of the FOMB to become a force for constructive change and consensus building after eight years. Beyond the numbers, the ultimate goal of the Control Board is a constructive fiscal environment, and the FOMB has essentially failed to achieve that goal.