Dive Brief:

The Puerto Rico Electric Power Authority (PREPA) last week unveiled a $20.3 billion plan to rebuild the island's electric grid, two years after the U.S. territory's electric system was destroyed by Hurricane Maria.

The utility sketched out its plan over the summer, including installing almost 1.4 GW of solar generation and 920 MW of battery storage, ultimately transitioning the island into eight self-sufficient minigrids.

But while customers will not get a bill for the grid rebuild, Puerto Rico Governor Wanda Vázquez Garced is pushing back on proposed rate increases to cover energy efficiency investments, saying the utility must find "independent sources of income."

Dive Insight:

PREPA will spend about $2 billion annually for the next decade to reconstruct its system, with 60% of the total going towards transmission and distribution system investments, according to Vázquez.

The utility plans to spend $6.5 billion on transmission, $5.7 billion on its distribution system and $3.9 billion for generation. Technology to automate the grid and upgrade computer systems will cost $1.8 billion, as will the system of microgrids PREPA plans to utilize.

Vázquez said the plan will provide a "safe, modern, and resilient power grid." According to her administration, estimated federal investment to implement the plan is $13 billion. Private investment will also fund some of the rebuild.

Source: Puerto Rico Governor's Office

While the grid modernization plan won't add to Puerto Ricans' electric bill, customers could see their bills rise between $0.64 and $ 1.79 a month to pay for energy efficiency improvements.

The charge would raise about $13 million to help consumers use less energy, and is managed by the Puerto Rico Energy Bureau, though PREPA will collect it. Vázquez has asked the Puerto Rico Energy Bureau to look for alternatives to the increase.

In a statement, the governor said she opposed the increase and called for "independent sources of income" that could include "collaborative agreements or the possibility of accessing federal funds, so that the responsibility for energy efficiency is not at the expense of the people of Puerto Rico."

At least one lawmaker has discussed legislation that would ensure consumers will not pay for Puerto Rico's efficiency efforts.

Puerto Rico's long-term plans include phasing out coal and oil-fired generation, and leans on liquefied natural gas as it targets 100% renewables by 2050. An integrated resource plan published in June focused on adding distributed resources, hardening the transmission and distribution grid, and creating eight minigrids — larger than microgrids — to serve customers.

Hurricane Maria left 3.4 million residents without power and destroyed 25% of PREPA's transmission towers.

While the island's grid has been reconstructed, a full rebuild is expected to take a decade. And the grid remains unstable: in September, PREPA was forced to call on a load shedding program to initiate rolling blackouts when two major generating units tripped offline.