[inaudible conversations] >> good morning, everyone. the committee will come to order. we are here today to learn more about the work that has been completed. work that is still underway as we seek to restore electricity to the people of puerto rico and really to discuss this morning, moving forward. so much remains to be accomplished. we will also take a close look at proposals to reform the island's energy sector such as the governor's proposal with regard to the puerto rico electric power authority and the puerto rico energy commission. in a hearing that we held last

november on hurricane recovery efforts, i suggested that that time there is essentially three tenants, basic tenants for the restoration and reconstruction of puerto rico's electric grade. i suggested we needed to make the grade more resilient to future weather event. i think everybody agrees that make sense. number two comment in the case of damage from future storms, burning the timeframe on par with the rest of the united states. again, absolutely reasonable. in the final is to bring down the overall cost of electricity compared to the crisis moving forward. i'm not sure any of this tenants have been wholly or adequately address although i would note that some parts of the great infrastructure are probably more resilient today, but perhaps my brazilian i.t. fault as they have been replaced with newer

materials. before we can get to those basic tenants there remains the primary question that i think needs to be answered and that is going forward, who was in charge of the grid? who is providing this vision for the future of the great men who should outside parties be in contact with to help fulfill the vision? is that the governor's office promoting legislation and contract for the third party to operate the transmission and distribution line price of the french oversight management board which put aside a new fiscal plan that includes a process for privatization or is that part of which is a relatively new board of directors coming new ceo that could be completely offended by these other plans. or a z the pre see which claims responsibility for setting the

overall policy direction you could be dissolved under the governor's reorganization plan. how did the department of energy fit into the hierarchy? what about creditors. many, many questions here. today's hearing is an opportunity for officials to provide clarity to questions that many in puerto rico are asking. they are asking why are we still see islandwide blackouts? they are asking where are all of the federal dollars have gone, how have they been directed? as we enter a new hurricane season, they ask whether or not the greatest more stable and more resilient and what efforts are made to incorporate alternative energy sources so that the island is not dependent on the global price of oil. and the status of the prepa privatization proposal.

but after an turn out concerned about consolidation of the agencies in puerto rico, particularly the prec with a fiscal issues and tracking capital investment is a struggle and without a stable regulatory environment remaining investors to upgrade the electric grade, it will be even tougher. i am hopeful or witnesses this morning can help us sort through some of these issues and provide a little more clarity not only to the committee that the people of puerto rico in the many, many who are closely following the situation on the ground. i thank you all for being here as we focus on this important issue and i will turn to senator heinrich for an opening statement. we appreciate you taking the chair here. >> happy to do it. thank you for scheduling this timely hearing to examine the current status of the creek restoration and proposals for the future operation.

senator cantwell asked me to fill in for her at the starting she would be here later. before proceeding i would like to take a moment to recognize the service of nine guardsmen who were tragically killed bus wednesday our thoughts and prayers are with their families and this is an important reminder sacrifices puerto rican citizens make each and every day. senator cantwell asked me to acknowledge senator nelson and senator rubio for leading a group of our colleagues requesting this hearing. senator nelson has been such a forceful advocate for puerto rico and i understand he was on the island just last friday. i think her distinguished witnesses for sharing their ex-her teeth in perspective with us today. hurricane maria struck puerto rico on september 20, 2017, causing the largest power outage in our nations history and the second largest outage the world

has ever known. we are still not done with the restoration process over seven months after the storm. today, 98% of power customers in puerto rico have power, but much more work remains. to put it in person acted, tens of thousands of americans they were still in the dark and the threat to their health and well-being is real. as we approach hurricane season in the coming weeks, we need to ensure that we have learnt the lesson of marie so we don't repeat the same mistakes. congress would like to see micro-grids, renewables, distributed generation and dramatically increase resilient than to the teacher. we can also agree the starting point is a robust, independent and transparent regulatory structure. something puerto rico has struggled with over the years. if we don't get this right, will be in exactly the same place after the next hurricane.

madam chair, i understand senator cantwell will join assuredly but asked that her statement for the record be included in the record. >> it will absolutely be. >> thank you pivoting toward her testimony this morning. >> thank you, senator heinrich or without, let us go to our panel. i thank you all for joining us here this morning and for your contributions. the panel this morning will be led by bruce walker who is the assistant secretary at the office of electricity, delivery and energy reliability. it's good to have you back before the committee. we are also joined by charles alexander junior who is the director of contingency operations and homeland security at the u.s. army corps of engineers. thank you for your work. mr. christian sobrino vega as the president of the government development bank and chairman of the board of the fiscal agency and financial advisory authority for the government of puerto rico. we welcome you.

mr. walter higgins is also known to this committee. he has come before us as ceo for the puerto rico electric power authority. we welcome you. mr. jose roman morales is that commission not go to so seattle -- you can tell me as samuel is very bad. and frederico -- we welcome each of you to the committee here this morning. mr. walker, if you'd like to begin, i would like you to limit your comment to five minutes. false statements will be part of the record and we will have an opportunity to pose their questions. mr. rocker, welcome. >> chairman murkowski, senator heinrich and distinguished members of the committee from

the thank you for the opportunity today to discuss possibilities for the future operation of electric or puerto rico. most importantly i want to assure the committee that d.o.e. is committed to providing technical assistance to prepa is to begin rebuilding of redesigning their electric grade kid during significant events for services from energy critical infrastructure including water, telecommunications and transportation must be operational to support the safety residents of puerto rico. the energy infrastructure in puerto rico must be designed, built, managed and maintained in such a way to ameliorate disruptions and inevitably occur to facilitate rapid recovery. this is a continual process of improvement, one that requires prepa to adopt solutions and technologies to address changing needs and d.o.e. international labs will remain inactive partner to provide technical expertise and deploy cutting-edge technology to

assist prepa. apparently completed their options and potential solutions for the puerto rico grade. the report provides recommendations that reflect resilience and are intended to inform investment in infrastructure. the recommendations address near-term and potential long-term action that will require analysis to make optimal investment decisions. several long-term recommendations that require additional analysis include number one, power flow to assess operations including dynamics and protect it coordination. number two, production costs and capacity expansion to an armed economic strategies of long-term planning. number three, micro grids, energy storage and segmentation to identify where clusters of generation provide maximum community benefit. number four, and cross that are critical infrastructure and

interdependencies. these items are addressed through the development of sophisticated modeling effort incorporating the efforts of five national labs. they will be developed in phases working with prepa and when complete will serve as a planning tool as well as operation tool. as a planning tool, it will provide contingency analysis and identify interdependencies of critical infrastructure necessary to ensure the health and safety of the residents of puerto rico. as an operational tool, will provide analysis in near real time, thereby providing system operators for situational awareness in order to make sound operating decisions to improve day-to-day operation of the electric grid. the operational capabilities of the model relied on near real-time data for micro phaser measurement unit that prepa and d.o.e. plan to deploy surety throughout the island.

furthermore, will provide technical insight into the resiliency object of allowing for coordination and communication of solutions across stakeholder groups. this will help enable prepa to ensure investment achieve improvements necessary for the grid. of course, any version of puerto rico's future grade require cybersecurity. uncontrolled destruction of energy infrastructure is not only inherently problematic, but it hampers our ability to respond to other types of emergency events like hurricanes. late last year, d.o.e. awarded $20 million for a national laboratories and partners to supercritical early-stage research and development to strengthen protections of the electric it from cyberthreat. one of these projects is a collaboration between four national labs, three universities including the university of puerto rico and prepa. participants working to define

requirements for secure delivery system control network independent of the public today in the utilizing dark fiber. working with prepa to deploy the capability as we work together by capitalizing significant amounts of fiber optics. just three weeks ago my office issued a $25 million funding opportunity not meant to industry partners to develop innovative approaches to advanced cyberresilient energy delivery systems that focus on redesigning our existing protection infrastructure for the electric to develop near real-time solutions that reduce and potentially eliminate the risk resented by cyberattacks. the funding opportunity was done with an eye towards accelerating effort to incorporate solutions and utilize them across america. in conclusion, the effects of the hurricane season to a

disaster in the short term now offers a unique opportunity to accelerate cutting-edge technology to improve puerto rico's risk. in this case, various forms of technology including micro grids, cyber, modeling, energy resources and utilization of storage are a few of the capabilities to improve resiliency of puerto rico and the u.s. virgin islands electric sector. thank you and i look forward to your questions. >> thank you, assistant secretary. welcome. >> chairman murkowski, distinguished members of the committee, thank you for an update on the electric power grid. the stafford act in public law 8499. they have the mission assignment with $81 million in related militiamen assignment to execute

our traditional public works missions. i will now limit my remarks solely for the restoration of puerto rico's grid. on 30 september 17 as the lead for federal efforts to repair the power grid. today we received to .15 really in for that mission alone. our task was to scope, coordinate and execute interim repairs to grid segment until a comprehensive restoration of the overall system could be implemented to the great consists of 2400 miles of transmission lines and a 30 miles of distribution lines, 300 substations, 16 power generation plants in an estimated 80%. part of the unified command group comprised of theme, proper

and the island's restoration. the ucg makes decisions guided by prepa's restoration has to plan priorities here these priorities and decisions are carried out by prepa you for our respective contractors. we were to reprint a great consists of four main lines of effort, provide temporary emergency power and spot generation facilities and ensure adequate generation of power plant, reinstall or repair transmission lines and restore and repair distribution lines ultimately providing power to the customer. for temporary emergency power, contracts installed 2180 generators and as the 781812 remain in operation. we anticipate they will be extended until 31 july. we've also installed nine micrograms to provide temporary power to communities will grid power is being restored. currently pricey though, the

class. to ensure adequate generation of power plants and make a generators, the poor will continue to operate and maintain both through mid-july. as if to make him a 79% of transmission line segment from a 69% of the transmission at 80% of the distribution line had been repaired. as of seven may, may be a point for 4% or approximately 1,445,000,000 items 1.473 million customers who are able to receive electric power restorer they been approximately 22,900 customers without power. due to shortage of materials to effect repairs, would be authorized transport and store material, leveraging the purchasing power of logistics agency to procure over

$229 million in material and today received over 33 million items. included in these quantities are 52,000 telephone poles or power poles are 5500 miles of conductor wire. based on famous guidance and design of the grid we purchased a mix of wood, concrete and galvanized steel pier transcends standard with 50 to watch part 2 mario galvanized steel used to repair the grid to the greatest extent possible dependent upon the supplies available at the time. concrete poles reinforced steel used to replace existing broken concrete poles. i'll start sure use to support transmission lines were aluminum would reverse galvanized steel plates in critical joints. the mission assignment from fema full and effective midnight. our power restoration contractor will continue to work until that date and time. we have over 540 personnel in

over 1000 contractors supporting this mission. the mission assignment and then there will be responsibilities in material. in the days remaining, we are committed to the contributions towards restoration. they are proud to have had the opportunity to serve the citizens for puerto rico. this concludes my testimony. i look forward to your questions. >> thank you minister alexander. mr. sobrino vega appears >> thank you, committee chair murkowski, cantwell and members of the committee. we will focus on addressing our strategies for transforming puerto rico's energy your and prepa itself. junior 23rd announcing a vision for the transformation of prepa and electric system. the transformation is based on attracting private participation to this type your with the transmission and distribution system in private ownership and operation of the generating

capacity. the transformation is desperately needed. while hurricane irma and maria left in shambles and millions of puerto rico and without electricity for a month, the fragile electricity infrastructure was painfully evident before the september devastation. the envisioned transformation is intended to bring to puerto rico he can ever center model that provides people with options is sustainable, open to advanced technology has resilient to future adversaries could establishment of the independent regulator structure. the transformation is intended to be an energy model and with the goal of achieving more than renewable energy generation and energy aspirational energy cost of approximately 20 cents per kilowatt hour. a springboard will create good

jobs. the piii act is investors used in recent confessions. the legal framework promotes a competitive process that ensures transparency and fairness while still providing flexibility necessary to achieve the best results in puerto rico. we also expect the transaction will be approved having jurisdiction over prepa's proceedings. in any structure provided will be necessary to resiliency of the system consistent with federal law. the structure of the transformation will be designed to ensure benefits of federal funding flow to the citizens just as in any natural disaster. to make the recovery efforts the most trans parent, effective and

efficient in history, the governor created the recovery and reconstruction for puerto rico. the recovery office of a strategic plan. and the shortcoming media than long-term. they provide accountability during the transformation process. one thing needs to be very clear. the u.s. citizens of puerto rico should and must meet the agents. mechanisms are being instituted to show and provide confidence that we'll be good stewards of u.s. taxpayer funds. during the transformation process, we anticipate a new or modified adequately funded an independent regulator will be established by puerto rico legislature. we expect the regulator will be comprised of five highly qualified members for staggered terms to mitigate. they may only be removed with a

puerto rico caselaw developed in the process. the regulator will be free from regulatory con like in structure to support steps leading to transformation. we expect the commission to be supported by staff with utility regulation expertise in that the ratepayer advocates will exist separately from the regulator to provide an independent voice for consumers. after the transformation has been completed a successful transaction, the structure will implement puerto rico's energy sector policy and will do that while creating investor confidence and attract teen private. transformation is the vital part of the economic recovery or the government economist and foremost that a 1% increase in investment will increase the product per capita of a .3% in the consistent investment resulted in considerable increase over time.

in the recently served plan, the oversight predicted the reforms would increase growth by .30% as a result is one of the lynch pins of the future of puerto rico and i will submit our testimony and look forward to answering your questions. >> thank you, sir. mr. higgins, welcome. >> thank you, chairman murkowski, senator heinrich for inviting me today. i am now in my this week in puerto rico. delighted to be there. i wanted to start by thanking the federal government, >> from the u.s. d.o.e., u.s. army corps of engineers and more recently hud for all the things that are going on that are helping porter begins in puerto rico's electric utility to become better and to be restored. there are many, many initiatives that are underway or soon to be

underway and we look forward to how those will help shape the grid in the future. i would like to recognize the public and private utilities that came to puerto rico after the storm and helped hundreds and hundreds of people to get as many people as possible restored to power. you heard mr. alexander say as of last night, 98.44% of the people of puerto rico have power available to their premises. that is good, but not nearly good enough because they were still 23,000 people that do not have power available to their premise and we now have about 1900 field workers in the field working on resolving the problem. in addition, some places may be just too hard to get to in any reasonable time. we have activities underway recently to find alternate solutions for those people. perhaps they might be

micro-grant at a minimum, solar generators, solar battery and emergency generator. those activities are underway trying to figure out who it is they will not be able to get to. one thing we are very sensitive to at this moment is the impending hurricane season that starts in less than three weeks. we are updating our emergency plan islandwide as well as inside prepa. we will hold an emergency drill inside prepa a few weeks from now and right after that and islandwide emerges the drill to make sure the island is ready. we will have practiced will have practice and practice and practice to be ready as possible for the next using. we are now moving from the planning and execution of restoration to what is called recovery and we have lots and lots of things to do thanks to the federal dollars that are

going to be made available and the idea that we can do better than we have done in the past. yesterday we announced the adoption of a national standard, the rural utilities service standard for all future construction in puerto rico is a great. that is an important step for us. the system was designed to american society and civil engineering standards in the past, but the national standard will help to facilitate bringing people into the island, getting on a faster basis, making things familiar to everybody everywhere, easier to model, easier to restore and adopt new technology because everything we do knew from now on and eventually to be rebuilt to be done to an accepted national standard in the u.s. standard is a good one. two things really stand out as needing to be fixed and they been alluded to in one way or

another. the grid does not withstand a hurricane. it simply didn't withstand it. the grid has to be a lot to do better has to be restored faster. many years ago, more than 20 years ago and sadly it has not been maintained the way it needed to be maintained. you have to go back on a regular basis. everything is still there is still intact. that needs to be done. i've certainly been hurting us recently. most of the generation in puerto rico is on the south side of the island. buses loaded on the north side of the aisle. sadly, the interconnection is what got damaged so badly during the hurricane. anytime my caffeine recently, there is an incident that affects the grid and

transmission system. the generation can quickly get out of balance and the blackout can unfortunately did ensue. we believe that with the right technology such as secretary walker talked about, a new view of how to build the great back using resilient, renewable distributed more efficient resource is, puerto rico's grid could be the grid they need a thank you for your attention today. i appreciate being invited. >> thank you, mr. higgins. >> thank you, chairman murkowski members of the committee for inviting me to appear to transform its grid. the commissions have continued to carry out the duties. they need to restore electric service fast and effectively but taking sustainable development, the commission draft rules for the development of mike or grid to publish the final version of

the same. the commission has also issued the integrated resource planning rules and is preparing to guide prepa process. it is that a decisive moment for the development of puerto rico. the peer mandate effective. so what is the most important that these positions are made on the analysis of the needs of the country within an orderly and object are planning process. the commission ordered prepa. we have initiated a new rate for fiscal year 20 night team to reflect the new structure. the costs, revenues and expectations of future sales that the raids to five statutory

indiscernible standard that are many decision-makers in puerto rico's electric industry is prepa, fomc, the governor and commission, the federal government. among all of these players is one common rule and that his performance for the kids number. in order for that term privatization to be useful, it needs more clarity. otherwise people would confuse ideologies for solutions. they were for interesting concept that sometimes get confused and combined. they are market structure, asset ownership, operational responsibility and business ownership. when someone speaks of privatization, it is not clear what they propose to privatize. the operational responsibility for the business. it is not clear whether puerto

rico's market to remain more holistic or two converted into competitive market instead of privatization i will better describe it as a restructuring. there's more to transformations in the change of ownership. too often people talk about privatization and market structures when what i really want to do is have heart of the past address only their needs to others. that approach will not solve puerto rico's problems. to produce a performance puerto rico needs, we must follow. the mix of products and services they need to start the quantities of those products and services in terms of reliability and innovation. they identified the market structures that would provide the products and services most cost effectively.

they can provide the services cost effectively. for those services that will remain on their monopoly market structure developed the necessary regulatory procedures for them to proceed in principles. and for those products and services to rely on the competitive market. in procedures. there are many decision-makers and stakeholders involved in puerto rico's electric industries. all with ideas, plans and proposals to address the situation. they should be on the table, but all ideas should complete in a merit-based, fact based transparent process. we must find the best past to perform. the integrated research plan approval process will determine

the resources that is most cost to centralize too decentralized from the impact of the programs and energy efficiency to address the consumption, the higher consumption that occurs in order to allow the highest penetration of renewables. the commission is ready and able to assist the commonwealth, the fo one b. and congress to define new regulatory frameworks and marcus ruptures for the benefit of the people of puerto rico. chairman murkowski members of the community coming thank you for the opportunity to testify and i look forward to your questions. >> thank you very much, sir. >> good morning, senators. thank you for having us here. we have submitted our testimony and so if you don't mind, i will

summarize. first of all, you ask about who is in charge, who is in control. the governor, the other side alert, maybe i could answer who should be in control. the private sector should be in control. the manufacturers association present 50% of the gross domestic product in puerto rico. no other gets close to 7% or 8%. in the past two or three decades, we have been very much affected. as a matter of fact, when i mentioned 98.8%, should be

corrected. getting back that expensive energy. costing thousands in terms of time lost. so, we are going to hear many statements. we will receive a lot of. and yes, you are right. the legal framework and yes, it's very important to have an independent regulatory entity and we need to complete the resource plan was approved by the energy commission in 2016 in order to have a good map of what to do. we also need badly to generate

our own amount with the energy we need my allowing mass to generate by using distributed energy. and yes, transparent to you. we have a beautiful framework. if we go through the typical process to contract and procure, we make it that at the end of all of this. so, the process, which is basically the way everything was presented and announced the opportunities allows you and me if we are competing against each other to review our proposals.

that's the only way at the end of all of this. we have the data. we just have to go with what we should do. the only way we are going to be silent is when we own the generation that we are going to use. thank you, not in chairman. >> thank you. and thank you for your statement this morning. there's a lot to discuss here this morning. let's just get right into it. let me ask first, mr. alexander, on the timeline that you have here, mate eight team is the end date for the army corps of power restoration mission. so it concludes at that point in

time 98.44% having power there is good, but 22,900 without, i would imagine that they look at that date and say wait, you can't leave us. is there any consideration of an extension of this mission, any need for it to be extended? >> ma'am, i believe that options, all options were looked at. the unified command group deliberated. the gentleman to my left sits on my body. our authority to be there rests with the mom and her resources. we will do whatever the mission ends, but we are right now until midnight on the 19th we will transition with fema, are lines that we are working on and material we have to replenish their image tori as well. >> let me ask about the orderly

transition and this may be directed to be there you, mr. alexander or to mr. higgins. big story, not too many weeks ago about the raid i guess it was in january. a couple months ago now have a prepa warehouse at the power station with debris building materials were seized. we've got a lot of discussion. you mentioned the inventory of the material purchases, but recognizing that was one of the initial limit in fact there is in restoring the electric grid to case you had supplies that were being requested another part of the country. so you had a supply issue at the time. we've obviously works to address

that. then you have a very serious and didn't dare in january with an aerial was secure. now you are saying you're going to be doing an orderly transition. can you give us that assurance that we really do have a material that are needed and what that will entail when you move on. the work remains. >> ma'am, i will start off. you know, we will conduct an audit, and inventory of material that will be turned over to prepa to replenish stocks during the response in the material that they still need to complete the mission. >> how much is out and in? in terms of what is needed to complete. >> what we need to complete? we are down to one point something% until we have 100%.

i don't have the actual account for the number of polls, transformers comic veteran. >> where i'm going with this question is whether or not we are still in a situation where we have a shortage of the material for the completion. you are suggesting no because -- >> material is no longer an actor. they are literally in many cases the material wasn't there had been consumed in the previous terms straight up the manufacturing mind and unique specifications solely in puerto rico. >> mr. higgins, did you want to add anything to that russian mark >> mr. alexander has correctly stated that material acquisition is no longer a big pitcher problem. other materials are either on the way on the island or have already been deployed. there could occasionally be a localized problem or material

isn't available to accrue at a particular time. but that is more of a matter of getting it to them from central to regional warehouses and out to accrue. the important thing going on now at the army's mission and in his assumption by prepa of the logistics operation that the army has admirably performed over the last many months. now we are in the process of the material acquisition people taking over the inventories, all the material that the army has acquired for this. taking over the replenishment of future materials, receiving materials that the army quote, unquote borrowed and in addition, being prepared, fully prepared to operate the logistics of material at committees in a way that supports continuing restoration in the ongoing and soon-to-be undertaken recovery. >> we are still -- it is going

to be a challenge and will probably get some help for that. but our people feel they are ready and is going to give us augmentation as we go through the transition. >> recognizing may 18th is coming up next week, we want to know that you are ready and that you are not still working through things. that is next week. if there are steps, anything that needs to be done on the outside looking in to help facilitate that, we would certainly hope you would make sure that his done. >> the helpful make sure we are ready. i don't doubt that we'll have some growing pains. this is a massive effort that we are ready to take the task. >> i understand that in a

vitiated, but i also think that for those that have been living with great uncertainty about their generation since these hurricanes, the 22,900 that are still without, when they hear you say there's continuing growing pains, that must be really tough on them. >> i completely agree with your comment, not an chairwoman >> senator heinrich. >> i am still trying. i have a hard time wrapping my head around this at mr. alexander, there were over 20,000 puerto ricans at 20,000 puerto rican citizens still without power, is your mission really accomplished? >> permission assigned by fema is. >> i don't think that's except the bull. i cannot imagine a scenario for 20 plus thousand texans are floridians were without power in fema would make that decision.

i think that's reprehensible. >> mr. masses, i went to get to the bottom of something you raise that is a bit of a game changer here. puerto ricans pay painfully high retail electric kids, both individual citizens and manufacturers that i can imagine a world retried in make manufacturing work at 20 plus per kilowatt hour. a lot of that is because of an antiquated overreliance, which is incredibly good. at a time when we see new generation from wind, solar, natural gas, all priced in the bulk marketed 2 cents to 5 cents, even 2 cents to 4 cents per kilowatt hour comic it seems to me even on the retail price we ought to be able to build new generation cheaper than operating these existing diesel generations.

am i missing something here? [inaudible] >> why can't you? they talked about that because it's being handled. what about the next three or four months if we are hit again? or was in the last two or three months. what if we get hit again? are we going to go to this again? a horse. if we own our generation, we will have the inventory available. >> what are the barriers to your member is being able to own their own generation, the rent storage from other on behind the major distributive resources that can not only support your members, but in an emergency potentially provide services back. >> not just an emergency. in order to share with the

community another component. so i mean, we could define all of this with a proper way to help everybody in puerto rico. >> why can't you do that today? >> we have not been able to do that in the past. remember that we are the biggest invoice of the company. they may be concerned about this kind of trend. solar, wind, and many others that are available and could make things very nice. >> mr. higgins, what is the proper legal stance with regard to behind immediate resources, with regard to solar and storage, for individual retail customers as well as with regard to large commercial customers being able to have behind the meter generation.

>> senator heinrich, it is the question needs to be answered in two ways. number one, puerto rico needs to change the way the grid is supplied by power today. it is not been adequately and properly supplied with the current generation mix. the generation is troubled by a maintenance issue. it is troubled by being reliant on oil, which is both environmentally and cost wise a difficult commodity. in addition, there's not enough generation where it needs to be and in some cases there is too much where we don't need it. the grid needs to be rebuilt. and he is to be rebuilt not just the wires, but the generation needs to be rebuilt and as they change it out and i agree in that regard we should be relying on customers to generate themselves. we should be allowing customers to want to self generate to do so. we need to interconnect with them safely such that the grid is still safe. the workers can work without

danger and is able to supply what the new world will they are capable of supplying for people to don't want to do it themselves or when it's more economic. >> you have a current policy for retail or four large commercial users? >> as i understand the retail policy, not spent a lot of time looking into that in my short time there. a customer in order to be a retail solar customers and still be connected to the grid must have a system that supplies their rail needs and how storage. therefore, they are going to suddenly rely on the grid when their system doesn't work. i believe that our current way of dealing with behind the meter solar. >> thank you. >> senator heinrich. senator cassidy. >> i agree with what the chair said. there's a lot of things to talk about here. let me kind of go tu,

mr. walker. and i think also you, mr. sobrino vega. you mentioned the desire for resilience and for 30% renewables. now, when we took our tour of puerto rico, there is fought of smashed windows and their tour of u.s. virgin islands allowed the smashed solar panels. so i'm guessing if you are going to be resilient, there has to be some redundant dave in terms of yes we have renewables, but there has to be an amount of backup generation as either baseload and/or reserve generation. is that correct? >> senator, when i spoke earlier i spoke about the integration of renewables is part of the strategy. i did not indicate any percentage like rps. that being said, the question you ask is a good one because

the habit that was brought during hurricane maria and the impact it had on renewables to that end. part of the modeling effort we're undertaking is the utilization of our expertise with weather data, particularly wind, to identify strategically to place things like solar and wind that we saw damage in puerto rico, utilizing topography of the island to facilitate it ability to withstand hurricanes. >> assumably, always be more vulnerable than other assets. in sir, you are going to comment. >> resiliency requires resiliency and capacity on the island. that is a given. but the inclusion of renewable energy sources.

.. >> i accept that. so, there would be redundancy, if you will, for resiliency but nonetheless that you have a lower price estimate. >> that is the goal. >> let me ask the other thing we learned from mr. higgins who put it nicely the generation is not cold located with your consumption so i recall that coal powered power plant on one side of the island but it's the opposite side in san juan. there were -- and that seems as if you are going to address that but you're going to put some of this redundant necessary for resiliency capacity on the northern side or on the opposite side of the island from the

coal-fired plant -- i presume that plan is in the works? >> yes, sir. one of the important initiatives that we are undertaking is to look at possibly and hopefully repowering some of the northern generation, both bringing the maintenance of the standard and repowering it with a hopefully liquefied natural gas imported and then burned in the generators. >> we saw that but going back to the former regime, i remember being taught at that plant outside san juan it was rustic. it was amazing how lousy the maintenance had been of that plant. so, but there were two ge or jet engines of sitting there generating electricity. sir, do you anticipate this sort of lng associated with these sorts of engines on multiple places around the island so i can back up these micrograms in

the 30% renewable? >> center, for the first round we are thinking of perhaps a small, not massive lng solution for the two jet engines installations that you talked about, so instead of being fired by oil there fired by natural gas. >> i thought those were being fired by natural gas. >> they are not. the ones at the san juan generating station that you would do. i also think it's very fair to say that we are not proud of the maintenance condition of our fleet whether it's the generating fleet or our transmission grid. that needs to be maintained better in our future budgets cover that. >> now, so, but lastly to my point it seems when we flew there it seemed as if you have this island way over here that's one of the last places to have

island restored because that was dark and other things related. yet the mountains suffering three or four different places and you know exactly what i'm stumbling and fumbling to try to describe. again, would you put that two jet engine in each of those places or we getting to have these line stretching over the mountains being vulnerable to big storm? >> senator, what were trying to do the integrated resource planning process that the chair has addressed in mr. sobrino has also addressed and that mr. walker has addressed, it's a modern highly developed methodology for determining what the right mix of resources and great improvements and technology should be to best meet the island's energy needs. it is clear we're not meeting them very well today. therefore, the integrated resource plan should identify the very kinds of things you are

identifying. where does the generation need to be and what kind of generation would make the most sense? meeting all the girls whether environmental or cause -- >> let me stop you. i will say that one more question i would've asked in alaska for the record. we spent all this money rebuilding but it looks as if going forward we may redistribute and so knowing that maybe that is how it had to be done it does seem as if there and inefficiency and resource allocation and again, maybe it had to be done that way but it does seem as if you will relocate from your test way. are you back and i'm sorry for going over, madam chair. >> thank you, senator cassidy. senator smith. >> i'm happy to be here today. i am new to this committee but i am so struck by the reality that with hurricane maria we lived -- american citizens live through the second-largest blackout in the history of the world and

it's incredible to think about. we are still working to recover from this. i am thinking about what would happen if this had happened in my state of minnesota and we were still waiting to recover and i appreciate the complexities of trying to respond to this amazing disaster but i'd like to first go to mr. walker and mr. alexander and try to get it what you think our responsibility is in puerto rico. we have this committee has to be the voice for frederico because there are no representatives for puerto rico on this committee but what is our response only to make sure we recover quickly from this? it feels like it is up to us. >> ma'am, our responsibilities are tied to the stafford act and its to provide temporary interim repairs not permanent repairs and we have the court has a long history of working with puerto

rico and we have an office there we work on projects will continue to be on projects. the jacksonville district is focused on puerto rico. we are, you know, are responsible he is to turn the light on as quickly as possible and other missions aside. we are doing that to the best of our ability. >> i appreciate that this is completed. i am glad to have this opportunity to figure out what we all can do to do better businesses, i think about what would happen if we were in minnesota and we were coping with us. mr. sobrino, i would like to ask you about something related to your testimony which i thought was helpful. we know that with climate change we will be seeing more storms and more frequent storms and more intense storms and your testimony, i think, gets at laying out the problem we have in puerto rico with long-term failure to invest and modernize

the electricity system. and also the need for transformation, right? so that it is more sustainable and as you say, more customer centered in the way that we do this. i always like to think about how we can have more affordable reliant and clean energy as a solution to that problem. could you talk to us a little bit about what you see as the federal policy changes that we should be considering or things that we should be considering on this committee level to help you to achieve that goal? >> the main driver right now in the recovery effort in puerto rico's funding. the issue with maintaining info structure for proper in the truth of the matter is that proper was succumbed to a fiscal crisis and when you have any

municipality or public entity that is involved in a fiscal crisis what you will see is at the first budget item that goes down is capital expenditures and maintenance cost would that explain is why the san juan plan that had rusted infrastructure and why you have transmissions that have been replaced and is the mere effort of reestablishing electricity could have an improvement of what we had before and so something that we would appreciate and the federal agencies like doe, fema have been helping us out on this but to ensure that the infrastructure in the recovery funds are provided to the island they reflect what is the best assessment that only from a conceptual phase appear in washington but what we know in puerto rico to be best for the island and i want to ask a quick question as we think of the goals of getting more resilient in the system as well as more affordability do we think that having more renewable generation

takes away from the resilience of the system? >> no, they are inherent difficulties with producing and providing energy and fuel to an island and that is part of the reality that puerto rico faces. what we do need to make sure we strive to have leaner and renewable sources we provide for redundancy on the case there is an event we can turn on generators. >> that's not the government. certainly that my colleague, senator hello, may have well comment about that and i'm given similar situations in hawaii. a huge emphasis on renewables and madam chair i realize that i'm out of time and i appreciate this and i also am interested in a follow-up as we go forward on this question that you raised about who is in charge here and how do we make sure the coordination happen so we can be

successful. >> senator garner. >> thank you for allowing this testimony to be held today. thank you for the time testimony of the witnesses today. a few questions. mr. walker, you briefly talked about the questions already in a test when he described how we provide both modeling support for the electrical get and technical for the grids. you answered yes to identify michael great opportunities and the long-term role and you talked about that. the models you use the microcredit modeling will they be made available in the future to own or operators of? >> senator, absolutely. my team is working with mr. higgins team and we people in puerto rico today both from the pma's from a technical expertise standpoint as well as personnel

from within by r&d organizations coordinating with the national labs to provide those models. >> and the modeling techniques can be used for regional or other national models within the continental us? >> absolutely. >> will there be predatory -- >> yes, we are building the model bigger and larger and more sophisticate model in puerto rico that will be both a training tool and operational tool with the idea that we will be able to transport the lessons learned while we are building a model into the border model for north america. >> i thank you mentioned the doe is working with southern states energy board to develop a policy legal framework that would help provide regulatory process for possible restructuring and privatization efforts and what

role does doe play there? what's the timeline to deliver options and recommendations? >> mainly the role the secretary and i met with governor brian from mississippi who chairs their executive board agonizing that our expertise within doe is on the technical side of the energy systems. we hired the southern states energy board to work with puerto rico in the usb i mainly because both usvi and puerto rico are already members of ss eb and they have the expertise with regard to military policy and working with municipal utilities. >> mr. higgins, your mercy the rebuilding of the grant you talked about resiliency but how broad of a definition does that resiliency cover? you have the ability to not stand storms but man-made cyber threats as well? >> senator, as the grid as we developed and long lines of what the assistant secretary walker talks about we will build into

some of these new systems more resistance and resiliency to let's say a cyber attack. as a rebuild and redesign the grid and the newly adopted sanders and the help of the federal government which we appreciate we will build some of these things and structures so that they are more resistant to the next-door the may come. >> do you have the ability or authority to -- what they retain in assigning or probing the management team there? >> i was asked to come to puerto rico with full knowledge that i could replace anybody in management that i felt i should replace. i have received no interference on that. the governor has made clear to me that i am an independent ceo and have the authority to replace management as i see fit. >> so the governor legislator -- what if any do they retain in terms of authority? >> governor is chief executive of the island in such policies for the on it. my job as head of a major state agency, albeit under an

independent board, to carry out the policies of governor. >> in terms of assigning a premium management team you have a double authority question. >> complete. >> very good. mr. -- i'm sorry -- >> i would like to clarify that walt is the first ceo of pepa during the non- influence process. for a headhunting mechanism was evaluated by committee of directors that was comprised of independent directors of pepa and was selected and compensated through the governing structure and that is something we are proud of that we have this first non- politically appointed ceo for prepa. >> in your presentation you express frustration in impediment that would push toward responsibility to talk about those frustrations? >> sure. thank you, senator. i have expressed my frustration one with the management board because what we see has been in

overreach of the delegated powers by congress. i will ask in short progress to specify the fmob to operate within trying to harmonize commonwealth law and not against commonwealth law. we see congress delegated oversight and management board fiscal duties but not policy responsibility within the island and that remains completely within the framework of puerto rico where our delegates for the commission would carry out and fiscal problems with the commission is unsustainable. our funding comes to rates and we have not been able to fully devise our funding through a firing counsel or consultants or higher personnel because this

would require the approval of the office of the governor and that has taken a long time to acquire. that is indeed the performance. >> thank you. >> thank you, senator carter. senator cortez mr. >> mr. higgins, let me start with you during our hearing on this subject is made clear to the committee that the stafford act as required under the previous state which made no sense to puerto rico given the disrepair its electrical system was in prior to the hurricane in the budget bill that we passed in february with provision included funds to be used to replace or restore systems to the industry standard without

regard to the disaster condition of a facility. it also allowed folks ability to allow components not damaged by working to be replaced in order to bring order system up to industry standards. does this provision go far enough with the labeling prepa to rebuild with reliability? >> senator, i think the way it is written and subject of course to funding it does go far enough in these are serial activity and you can't redesign or rebuild the system from scratch and completely upgrade to the new standards. you have to get the power back on first so that has been the priority but as i understand the funding as has been explained to me, as i read it, provided it is funded there is enough authorization, activity and hopefully funding to rebuild the system so it meets modern standards. >> mr. walker, let me ask you the same question but we need to take further action in regards

to the stafford act in order to achieve power of resiliency? >> good question, senator. yes, i do. testifying in from the house i spoke to this a couple weeks ago and my point was that there is an opportunity for us to allow engineering to be done to modify and make corrections with regard to design particularly to add the resiliency in. rather than be held to what a standard may very well be there are opportunities and i think puerto rico has presented many of those where he could have replaced and made decisions early in the restoration process to increase the capabilities for, let's say, a line. i could build it with, you know double up buck pulls as opposed to the industry standard might be a single pull. i think the capability to allow those who were on the ground making decisions with regard to

what would be the emergency frustration to incorporate the ability to modify the system and to add capability whether or it's redesign or equipment even if it exceeds industry capacity or the industry-standard. >> and that is true for not just puerto rico but other islands -- >> that's right. >> thank you. would you be willing to work my staff as we address -- >> yes, ma'am. >> thank you. mr. higgins, let me go back to the question that came up and i believe it was the chair who talked about this. the concern with the corley leaving on the 18th and my understanding with prepa taking over you mentioned in your response to the chair that is you take over these logistics that there will be challenges to take over the logistics to engage in the container recovery and what challenges were you talking about? >> there is, senator, thank you for the? there's a massive amount of material still coming in and that needs to be reintegrated

from the puerto rico system from the army system in order to fight the battle, so to speak. our people are now in the process of receiving all the material and all the paperwork that goes along with it so that everything is properly accounted for. along with getting the material that lay down yards in the army warehouse is getting out of the army warehouse that's a lot more things than the company was normally doing so in order to do that efficiently we have asked for to bring help but we feel were capable of, and i agree with them, to manage the ongoing material requirements but the transition period where we are getting more stuff and have more things to do and applied with fema requirements to make sure it's reimbursable. >> so you say you will be

getting help. who's providing help? >> fema will send temporary help for us. i don't know exactly the source, senator. >> would you prefer that the core say and continue? >> we have been delighted with the work that court has done and at the end of the day it is not prepa's decision but were interested in how the work got done in the core engaged contractors to do that work and they've done a good job in the core also took over the logistics operations which was very helpful. we just wanted done -- we are not indifferent. we want the job done well and we have more contractors coming to the island to replace the core contractors. we don't choose -- this is famous choice but i think that fema is making a choice to dictated by what their guidelines are, as well. >> thank you. thank you medicare. >> senator lee. >> thank you madam chair for holding the. thank you for being there. and like to start with mr. alexander. are you concerned about

mismanagement within prepa? >> no, sir, i am not we have been a partner and in collaboration with prepa since day one and we been working out of their headquarters and i believe it's been a partnership that has led to our ability to get as far as we have. >> are you aware of any ongoing investigations regarding the missing inventory information for warehouse five located near paris goes [inaudible] generating station? >> sir, i am not aware of any. >> can you tell us why the raid of rare warehouse five was conducted on january 6. >> i don't know if i would

characterize it as a raid. i believe it was some personal was there and they happen to notice that there were supplies in warehouse that had not been previously identified when we were working with prepa to inventory the stock hand which would ultimately help inform will be needed to procure. >> sunset operation, whether you call it a raid or otherwise, do you have reason to believe that there are other gaps in prep prepa midori? >> no, i think an extension for the joint inventory was done. again, that is what resulted in the material we procured. ninety plus% of the 36 million items we ordered have been delivered. i think that we will find the inventory and it will allow prepa to not just replenish stocks but to finish the restoration mission. >> okay. mr. higgins, i like to talk to you for a moment. in november, before this committee, i asked the governor about some of the serious issues with prepa management and

operation. i like to follow up on that by asking you directly. do you think there's mismanagement and corruption within prepa? generally and in particular with prepa? >> i've no idea about puerto rico, senator. i just don't know enough about it to know that. i can tell you this that with respect to there will always be an organization of 6000 people something that is going on that should not be. we will vigorously investigate and go after anything that is not done the right way. similarly, told senior managers that were there when i came that is time for you to decide if you want to be a part of the solution or you don't.

if you don't, tell me now because if you don't tell me enough to make a change it will not be nice. some may make it and some may not. i'm optimistic that some get it and that prepa will be different in the future but i've made quite clear that they have to be different and run the company differently than it used to be run. >> to the extent you suggesting that prepa is no more susceptible or vulnerable to the victim of mismanagement and corruption than any other business organization or any other utility company state owned or otherwise. i don't think you're suggesting that, are you? >> no, sir, i am not progressively saying within a group of 6000 people there is likely to be somebody that is not doing the job the way the r2. hopefully, it is just not doing the job is supposed to corrupt and anything we find that

suggests corruption will be fiercely and thoroughly investigated and that was strongly. >> some of the things that have concerned me involved staffing without expertise required for the job that sometimes resulted in the failure of multiyear products. it has widespread theft of power and billing failures that cause an unusually high rate of outages and generation units that are often technologically outdated requiring reliance on their extensive fuel. are you aware of some of those problems and are you taking steps to address? >> several of the last few you mentioned were covered in my remarks. we do have maintenance issues with our generators, we do have environmental compliance issues with our generators, and if they are not able to be run for environmental reasons they have to be shut down. if our generators are not up to

snuff maintenance wise we don't have to run a less efficient generator that needs to be fixed and that is part of my mandate. >> thank you. i see my time has expired. >> senator geraldo. >> thank you, madam chair. question for mr. alexander. in a may six committee general was quoted as saying that required to puerto rico they never prepared a power grid of the spring the dude is part of the mystic disaster response and cannot predict the assignment from fema to restore the grid. do you believe that the court should be tasked with grid repairs in future natural disasters because there will be more and beyond it's more routine task of bringing in

generators and immediate mission was to turn on the lights? should the core be able to do more than just turn on the lights in this situation like what happened in puerto rico? >> thank you, senator. the core has traditionally done the temporary seapower with generators. it was a new mission set. we have done some good work in iraq and afghanistan but certainly nothing to this extent. it is not a core, cord, competency of ours. the decision on whether the should be incorporated in our portfolio is not ours to make but if it is made then we would have to train our personal and be resourced adequately to execute that mission. a lot of this was done on the fly, if you will. were able to get contracts in place quickly under federal acquisitions due to the contract vehicles we had a place. >> you say the decision to

expand the mission of the core is not yours, whose decision is it? >> well, the determination for the court to end on midnight 18 that decision is by fema. we are there under the stafford act of 40 and under the associated resource. we run out of money on 18 and we run out of authority. i would tell you the based on the statement made earlier i would be remiss if i did not say out of the military and core employees who have deployed to serve the citizens is not in a concert to walk away from a mission when it has not been fully accomplished but -- >> i know that fema was on the big island so this is not denigrating anything that fema is doing. it is to ask whether or not we should an instances such as like puerto rico which is a unique island nation that just as

hawaii is whether there should be some greater flexibility under the stafford act to allow you to do more into have more training in the course dependent on resources provided? >> if i may answer this question, i do not believe that the core should be focused on emergency restoration for power grids as an expansion of their duties. the core was assigned a mission assigned by fema because prepa did not call for mutual aid in the standard within the industry is that any utility whether a ppa they call for mutual aid in command resources across the entire united states and canada to restore events. but for that failure to call for mutual aid that is what resulted in the fema mission assigning

the court to undertake the emergency restoration component. had the process worked as designed and the reason why the general and i indicated in his article that there was the first time it is, in my nearly 30 years working in industry, i've never seen -- >> so this is a response ability of prepa to have a call for that mutual aid and so, mr. higgins have you rectified or has someone rectified this omission? >> senator, we did eventually cause for mutual aid. at the time when hurricane maria hit all of the utilities and companies that would be providing were essentially busy important in texas and before that after irma but had hired a contractor's in their restoration process in the mission for the core as i remember because i was there was signed because they printed from the governor and asked him to sign it so we could have energy

in 40 days. it's more completed then as narrated before. >> i'm not sure that's accurate because i -- as was i. >> odyssey, there needs to be more coordination because you can expect weather conditions to hit simultaneously in all parts of the country and in our territory so this is something that needs to be resolved. mr. walker -- >> for the record, the quest for mutual aid came on october 31. >> and hurricane hit when? >> late september. >> september 20 in the context of their in five days. >> so, does that sound an area for rectification. i'm running out of time. also met for the questions for the flexibility that we provide under the stafford act. >> thank you, senator carano. i will just share that one of the passions that i had when we visited less than a month after the hurricane hit was the

difference between us virgin islands and puerto rico and one had keep things up so that mutual aid assistance would be there in anticipation of the disaster and literally on the day after there were crews coming from the continental united states into us di to help with the debris cleanup and the decision not to act, not to act, fulfillment "after words", i think, was one of those decisions where you look back on and say we could have seen we could have seen a difference effort in terms of what could've come to puerto rico more readily. a lot of monday morning

quarterback in the goes on but i do think that that very clear example of one place been prepared in anticipation of the disaster and another hoping to get lucky and they do not get lucky. senator king. >> thank you, madam chair. first, i want to thank you and senator cantwell for arranging this hearing on the support topic and a knowledge the role that i believe senator nelson played in trying to encourage us to work on and look into this problem. i know he is exerted a great deal of on this issue. i'm a little unclear -- we now have 98% restored does that mean the system is already built and have we rebuilt the old portable system? >> mr. alexander have gone beyond building a new system or is it does work in other words are be patched up to work for now or have we precluded the opportunities to build an

entirely new and modern system? >> our system was not filled a new system. our mission was to do the interim measures to get the power restored. in that department of energy they been supporting us in the longer-term resilient grid you mentioned the permit of energy as prepa. the notion that our chief of engineers would say that puerto rico had power in 40 days and here sign this is the first time i have heard this. our chief has been clear on expectations and on one power would be established in the different dates and percentages and it was not consistent with what, i believe, the governor unilaterally declared. we never agreed. >> we've got the system back and up and running and again my question is whether we have gone by the moment when we might have

built a different system. who is in charge? who makes the next decisions about what the system look like? i asked the question last time but i'm not sure i still know. who will make the decision as, for example, to go towards to the system as opposed to the current baseload diesel plant and wire across the aisle? >> senator, regarding how the structure for generation is conducting in federico this is a policy choice that handled through the legislative process for the regular process regarding info structure and investment especially when it comes to -- >> i'm less concerned -- before we get to funding i want to know who will decide district we maintain the current baseload long wire system or do we go to a different system and is that prepa or is that -- as it --

>> as in any state if the government to legislate process in discussions. >> no, that is not true in my state. they make proposals and the public a person but the legislator doesn't design great. >> in federico there is prepa is a corporation so it is subject to certain litigation. that's right we want to transform training to have private operators so that is completely depoliticize and disconnected from village the process and it could look like a utility in the mainland. >> mr. higgins committee of the authority to redesign the system and this is i've got a limited amount of time so -- >> i believe that the offices of the integrated resource process and through the offices of the various initiatives that have been undertaken providing longer-term funds and opportunities to make the grid more resilient we can do exactly what you say. we can figure out a better way to do it.

>> what's the price of electricity today all in -- >> around 20 cents for every kilowatt hour. >> so nice they were building a 50-megawatt solar project in the state of maine. our costs are way below 20 cents and it's competitive and i just read that last year were down to 6 cents a kilowatt hour for solar. why isn't this the natural response in puerto rico why are we doing 47% do diesel, 34% gas and 17% coal and -- >> i believe it's fair to say that that is probably where things are going to go but that has to be taken through a process that everyone buys into properly funded in a plant made for how we get into the old generation and where to locate the solar and how to put

individual and distributive solar projects around and how to bring perhaps liquefied natural gas to the island so we can be cleaner. >> let me get back to my initial question. whatever your decision or will that be a political decision -- who decides how and what the grid will look like? >> i believe it's my decision subject to the oversight of the [inaudible] that mr. roman runs and through the -- >> i understand there's discussion of divesting generation from transmission which is happened in lots of places including my state. who will regulate the remaining wires? i understand that still a public company but or publicly owned company but will there be a regular of the company and distributed committee? >> the energy commission presented by mr. roman will be regular. >> and the wholesale production of energy will be unrelated up to competition? >> no, sir. that would be under regulation by the entity and will be

subject to the concession or the sale contracts are signed by the party. >> i appreciate the constraints and i appreciate you being here but i hope we don't lose sight of the big picture that federico could go from a challenge to an electrical system to a world leader given the natural assets that the island has and that plunging solar prices have plunged 80% since 2010 in norma's opportunity and i look forward to working with you to help seize those opportunities. thank you, madam chair. >> senator dean's. >> thank you, chairman murkowski. like others i was troubled to learn that prepa had contracted with an energy company although based in my home state with

minimal experience. i understand the need to move quickly giving couples and the islands financial state and it is equally as important as these quick decisions are made with the best interest of ratepayers and taxpayers. mr. sabrina, what oversight is in place with respect to prepa's finances in the other. question in your view does prepa have sufficient internal controls and contracting expertise. >> following the contract that you allude to the governor had limited receiving ship over the context called the oc pc but the office of contract and procurement. it has effectively conducted the oversight of the procurement process. we have to submit the contracts also to the fiscal oversight

board under section 204 and up-to-date they are not known on those contracts when they are to be reimbursed by fema also are now subject to preaudit and that has been conducted successfully. regarding training itself, it is subject to fiscal oversight i state authorities and subject to the fiscal oversight i the fiscal oversight [inaudible] >> when were those additional controls but in place? >> i don't remember the exact date but we were following, i believe they were in october or november. november, yes. >> and had they been in place before? >> i think overlearning from will be seen and maybe in hawaii and other islands we would implement the best practice like conducting and activating agreements before hurricane

system and the usb i is subject to more here gains more historically and we have limited resources from the mainland. the us be i is much smaller than puerto rico sobrino and resources to the island is difficult. we do have to do work on our emergency planning for hurricane maria or -- >> mr. vegas, prepa has had serious problems with debt and mismanagement. given the disaster situation will customers be able to pay for the service? >> senator, i'm not sure i understand aggression. is it a question about the rate the customers pay? >> we are some distance yet from a final decision on how pop-up will be restructured and taken to the bankruptcy judge, if you

will, and how the different contracts and all the different activities of training. we now have a certified budget and that will guide us in that certified budget will imply rates that will have to be submitted to mr. roman's organization for approval. we are in the process -- the goal of many of the activities that are being undertaken inside the entity now are to reduce the cost pressures and reduce the cost so that there is less pressure and the bottom line is with the federal help that we are getting in with cost control measures under way and with an adequate set of solutions to the many call it contractual problems we have, the rates will end up being fair and acceptable to the customers given that they are already too high and they need to come down over time.

>> in written testimony you mentioned the concerns about prepa having only two months of operating expense and liquidity. how can this be addressed? >> in the short term we need to start doing a better job which we are trying to do of collecting from our customers in real time. were only able to get about 80% of the customers built now because the automated meter reading system depends on substation devices that are not yet replaced and the substations in many cases are a large portion of them are still out of service. that will help in getting the bills out and getting the cash flow in which is now about $50 million a week and that will help a lot in the continuing support of the bankruptcy court for loans that would come from the commonwealth of puerto rico. they are who we borrow from and we it will help us to bridge

through. we will be back asking for more if we need it in the next few months of the new fiscal year. >> thank you, chairman murkowski. >> thank you, senator daines. >> i apologize for not being here earlier. this is an important hearing and certainly i appreciate all the witnesses being here and the attention to detail and mr. higgins, good to see you. i know that we thought another battle together to make sure that the ratepayers and taxpayers got a fair deal after a lot of markup manipulation. it gives me some degree of comfort to know that you are helping in this although i have to say this recent run-up in debt securities for the hedge funds are profiting is some of the frustration that leads to what we were concerned about before. to me it's simple and we are trying to get from the done here at taxpayer expense. we will save this for different oversight hearing but i did want to go to and i did put out a

larger statement that it won't go into now but mr. walker, wanted to go back to and i know some of the colleagues to my colleagues were asking about the blackout conditions. what was the main cause of that? >> yeah, based on the information we know and when that happens working with mr. higgins the thing that people neglect when looking at the system is not in its normal state. by virtue of their two main transition lines ago from the south to the north on the 230 system. one of those lines is being worked on which places the majority of the north, south quarter basically relying on that and the relays are set and designed to operate with the system and basically normal

state. the system is not in its normal state for a variety of different reasons including that transition line they are working on. it surmised and i think mr. higgins and his team have done more and i know he's been working on with folks with the relay experts look at the details but it looks like there's an over drip mechanism based on the abnormal state of the grid and if you want to add anymore -- >> i think assistant secretary is very appropriate and the grid is weak right now because the number of lines are still out but notably one of the main transport lines to take power from the south to the north and went in incidents occurs that caused a protective action to start on an adjacent one the way the relays were set which was probably right. normal system caused the entire set of lines to trip off and

then you suddenly have a mismatch and an electric and then think start tripping so as a result of that we just did not have enough generation in the part of the island to hold the load so everything started to trip and that's the way -- it protects the system by turning things off before they are down. >> is a something originally fixed or reset? >> no, not to my knowledge. >> celestine have anything to do with whitefish? >> no, no, this issue starts with not enough generation in the north and too much in the south and then the second thing that when it when the grid is in a bad condition which it is her now until the line is built then you're vulnerable to any kind of incident and then third, we have to look at in this is what the department of energy is

currently working with us but the protection experts and relay team are there things that we can do to better operate in these abnormal conditions that exist right now. we are getting help on all three fronts. >> okay. to this proposal on the energy commission and changes to it to me it would put the reforms -- i don't know that any utility operate this way in the united states. basically, considering what [inaudible] recommends as far as an energy commission, mr. alexander do you think this will make us less or more independent this effective independent regulator?

>> ma'am, that's not an area that the core usually delves into so i don't have an informed opinion. >> mr. higgins? any comments? >> as the recipient of regulatory activity in many, many places i lived in my life i believe that nothing is better for a customer in the long run than a fair, firm, strong, well-managed regulatory entity and nothing is better for a utility. at the end of the day if the customers get better rates and better reliability and the utility those withdrawals are in the operate by. >> i guess that is why i would be concerned about having all of the appointees had been able to, you know, by one entity and then ignore it. as well as being concerning. again, that is something will have to keep our eye on and watch carefully for the future. so, my colleagues were discussing distributed generation. do you think we have enough in place now to focus on that given this load issue?

>> senator, do you mean enough distributed generation? >> enough in the framework of discussion, not so much in disturbing at generation but my colleagues were asking which i think is a viable question and we have this all the time as it relates to the oversight and given some of the changes that are being recommended do you think there's a framework that exists within puerto rico to properly that an incident disturbing generation? >> i think or work will have to be done to make that work wellin puerto rico. regulatory work, perhaps regulatory work, certainly within training. we do need distributed generation and it will be adopted and i believe as a result of the integrated resource planning process. >> okay. would you get back to us on what legislative ideas you think we might need to make that a reality? to me -- what, i know our colleagues -- well, i don't know

what all our colleagues think but i hear them and a lot of them think well, this tragedy happened and now we will build this most resilient grid and as mr. walker just said we basically got the grid up and running to the best of our ability. now we know that hurricane system is about to hit again and so people will come back to us and say wait, i thought we built the most resilient grid but we put some money towards that but obviously we all know that derivative generation can help in the reliability of the spirit listen, the chair and i want to get about rebuilding our own grid and making it smarter. we hope our house colleagues will help us get a bill at some point but i think the key thing now for us in puerto rico is to make sure that the regulatory process does allow for some distributive generation that would help us with resiliency. if there are various to that i certainly want to know that i would think some of my colleagues would as well. >> senator, i do not mean to

imply in federal action is needed. mr. sobrino talked about several initiatives in puerto rico about policies and that is the kind of things that might be needed to make this work. >> okay. great. thank you, madam chair. >> thank you, senator cantwell. if you have more follow-up questions, mr. walker, in your testimony you mentioned the report on the energy resilience options and potential solutions for their grid. you said it is nearly complete. when might we see that report? >> the final draft is done on the 30th and going through final edits will be presented the report at the next meeting of the undersecretary's from all the responding agencies which i believe is next wednesday. at that point we will be disturbing that report. >> great. we will afford to that. you also mentioned the micrograms and the national labs work through the micro grids design tool.

you indicated in your testimony here this morning that you had identified some key locations. can you share with us what you are looking at? and probably as important as where there are is whether or not these micro grids have the support of the local folks there to use the land and basically are sign on to the fact of having this opportunity as opposed to obtaining power from other generation. >> sure, the focus on micro grids is diverse. our initial work on the micro grids was with great code, of puerto rico industrial corporation which owns 200 pieces of property throughout industrial pieces of the island. we worked with them to help

facilitate providing better power quality for a number of the industrial customers and particularly those that were out of power to ensure that the economic vitality of the island remained intact while we're going through the emergency restoration component. in addition to that work that was being done were now working with prepa to identify the last mile the isolated communities, where we can do that and also with fema in the core for those locations that we had placed generation for critical and structure and continue to have generation at those critical and production locations. the idea being that by providing those micro grid capabilities there the next time an event like hurricane maria which is inevitable is presented to us there will be some level of normalcy that will be

established to help facilitate the health and safety of those on the island only work to go through restoration effort aga again. >> in that vein, there's been a lot of discussion about the smaller islands off of puerto rico. when you look at them you say it makes total sense that these would be perfect opportunities for the micro grid pilot projects. can you give me any update and maybe, mr. chris, you can jump in here or -- >> i can answer. the two islands are being designed to be a micro grid where it will be separate from the mainland and there are two underground cables that field it in those are inactive and there was an rsp that went out for localized generation that is

presently there and to develop the best micro grid strategy for the two islands going forward. ... two evaluate the rfp simmons once they're coming in, utilize the expertise went with a national labs on micro grids. >> great. let me ask you, mr. higgins, for an update on restoring power to some of the more remote and the more mountainous areas. when several of us on the committee went to puerto rico in october, we went out to bern

cutis, pretty isolated in the sense of where it was. and i'll tell you, you are left with impressions of conversations that you have with people at certain places and the conversation that we had with the young woman who was five months pregnant who was looking across this cut through the earth, this ravine, that separated us. the road was taken out but she was separated from the home that she had just bought and had not been able to move into because of the damage that was done, not to her home, but in order to access her home. and i was thinking about her just a few days ago and the fact that okay, she's had that baby by now. hopefully all is well there, but i have wondered whether she was

ever able to get back to her house and whether her home has been restored to power. so can you tell me how things are looking there in the central mountain areas, and kind of what the plan is? >> senator, thank you for the question. you've identified the hardest part of this restoration, and we are down now to where we are getting less than or sometimes only one-tenth of a percent additional customers restored on any given day. that's not very many. there were days before when we get half percent or even one. i use that as an example because we still have about 1500 people out in the field working every single day to restore these distribution customers. that's in addition to the three or 400 400 that are working one transmission lines, which you just can't put as many people on.

there are many i think situations like the one you describe. there is no question that that's going on. many of our employees still don't have power because they live in similar places. so in addition to continuing to work down the lines, and that's exactly what the cruiser do, we also have an initiative to try to identify the ones that are just really too hard to get to in any reasonable amount of time. for any reason. and sometimes quite literally your crossing the candid, like you describe or you're going through almost a jungle and almost rain forest trying to refinish alina put back up a line that is 1000 feet long and down. we are making progress, not nearly as fast as our customers would like not nearly as fast as we would like but we are doing about as good as you can do in these very narrow, very tight areas where he almost can't even tried to trucks passed each other. so we're continuing with a lot of people working on it.

i think we tried very hard to get there as fast as we can. it will never be satisfactory to the person whose bow has been out for seven or seven and half months. there's nothing we can do to make that better except continue to work really hard to try to do it. >> and you tell me whether, even in these areas where they have been without that power for now seven months, the schools had been taken care of. they've got generators. kids are in the schools, i do not? please give me that a short. >> yes, ma'am. school started and the schedule of course change. a lot of work with them by upr, to make sure you don't use that semester but kids are back in school. >> just kind of jumping around here. mr. sobrino, you talked about

the sale of the assets from prepa, but given the age, the condition of many of the electric power plants, who's really going to buy them? who do we anticipate is going to look at this and said okay, here's the deal. >> that's a great question. what we're going to conduct as a market sounding process. what we see is a lot of the prepa generation fleet, for the value their location. part of the value is a requirement opportunity less new generation assets are constructed. so we are open to not only having just an outright sale but having an intermediate agreements also including this transformation process. >> so if i'm somebody who is looking at this as an

opportunity, again having seen some, i think senator cassidy mentioned the condition of some of what we had seen, it was not exactly enticing, understand that there is an opportunity because of the location, but is this something that decisions on this would be delayed as potential purchasers look to see what really is going to be stood up? there's just so much that is at play right now. you've got fema and the corps who have been in place for these eight months now. you've got a transition. you've got so much that is moving around, and a great deal of uncertainty.

we're talking, , mr. higgins, yu mentioned part of your responsibility here is to make sure that you've got a grid that is resilient here, you are preparing for the next hurricane season. assistant secretary walker has said that we're not end quote, normal state, and that's why we saw this most recent blackout. so we're not in the normal state yet. hurricane season as you said, is a month away. the corps is leaving. you've got a transition going on that mr. higgins has said it may be, i think you said uncomfortable, or a little painful in a process. i just have a hard time believing that anyone is going to give this as a real opportunity to come in and purchase these assets.

>> the process to concession or cell of an asset, what we are working on right now is getting legislative authorities in puerto rico so we can commence a market sounding, and interface with possible investors. what is clear is that whatever happens, there is going to continue to be a transmission distribution service in puerto rico. and the way that we found in the past that services like those are depoliticize, managed adequately, that if we contract the private operator would provide some kind of long-term concession. what we are trying is to find ways to avoid falling into traps of the past and have a stronger customers centric system. the are a lot of challenges, senator. we are not shying away from them. we've asked for help and we need that help, and we invite that help continue come to the island but it is part of the reality that you have to juggle a

governing, you have to do what he has to do in prepa, or josé has to do in energy commission, what mr. masses has to do in the private sector. we all have to continue our operations but also face a possible atmospheric event in future. that's what we're working on to make sure what happened before never happens again. >> i would also, i think it's important, your comment, , but trying to depoliticize to the extent possible. i think we recognize you've got some pretty difficult history with the politicization of your power grid, and to think that that is been a real drag on your ability to move the island it, and the genesis for many, or the regular of many of the questions that have been present. i want to ask you, and i'll let

you, mr. masses, jump in here, but as far as the coordination, the working together that you just reference, how well are the governor, the board and prepa coordinating with each other on the structure and on the operation? it's one thing to sit here in front of the committee and share a table, but do you believe that all of the necessary entities that must be coordinating to allow for a better energy future for puerto rico, do you believe that is happening? i'll ask each of you, and also from the private sector site as well. >> should i start? >> go ahead. >> part of what we did two months after the hurricane, to try to enable that coronation we created the recovery office

within the p3 authority to . we're falling best practices in louisiana, in new york and new jersey try to centralize that coordination effort. the communication with fema, u.s. army corps of engineers, other federal stakeholders has been a pretty substantially. right now i think the unitary command group, we can discuss maybe differences of what happens in the past of the truth of the matter is that federal officials and puerto rican officials official have been walking on the grounds holding hands together, working together for months now and they done great work. with the oversight board in prepa, prepa management runs the day-to-day operation. we do have to conduct fiscal and budgetary planning with the oversight board. they are included in the process, and from the regulatory point of view we have been working hard on improving relationships with the regulator to make sure that they are more involved in the process. there was confusion because the

authorities between the interview regulator, between itself, now that it's in title iii, some of those issues have been litigated an result, some of them we are working together to figure them out. but that working together is happening day-to-day and it is going to lead to more successful, a stronger and better puerto rico in the future. >> mr. higgins. >> my job is not to figure out what the policy should be but to implement it. and when the legislature and the governor, working with the oversight, decide that the right future for puerto rico's electric utility is to go a certain way, my job is to get as ready as possible and execute that plan. >> do you feel you have a clear direction a? >> yes. i don't have the exact direction but i certainly have a good general direction at this point. and that's what is being debated in the legislature, is how to look at that. >> from the private side, what

is the observation? >> well, first, when we had 500,000 500,000 meters, it's a huge market. the importance of the value -- [inaudible] it's a huge market. so as we speak we are having an energy, international energy event in san juan with dozens of companies interested in competing for this market. so there is going to be -- a huge appetite to be part of this. now, our energy committee offered itself to present a biweekly report. in order to keep you informed and assist you in helping. so we will present every two weeks a report of how puerto rico is progressing in this crisis. in terms of the relationship

between the government and the agencies, no pain, no gain, right? i believe they are going through some difficulty, but as was mentioned, they will be fine. things are going well. so i hope that the conclusion will be a great, great all of us in puerto rico. >> mr. morales, would you like to jump in? >> that you very much, madam chair. i actually encourage with what i'm hearing today at the hearing. there is still work to be done to delineate responsibilities between all the different agencies. there are many agencies that have either, there is either interactions between the decision-making at there's overlap between them as well. so with issues, i included that as part of an attachment to my testimony, protocols that we establish so we can work with

the oversight and management board so that we can enmeshed our responsibilities so that we don't step on each other's jurisdictions. and we have conversations with mrs. sabrina and the government. there is a policy starts, started within the government, started within the governor and the late, was legislature delineate different entities. this was on the energy policies, implementation of the policies, the possibility that there is limited relies on the energy commission and prepa to carry out those policies, or whatever future transformation takes place. but i'm encouraged with what i'm hearing. i hope that these conversations keep happening and that were able to delineate where we all are supposed to operate for the benefit of the people of puerto rico. >> i had one more question, and this was prompted from your

comments, mr. higgins, about this are u.s. national standard that you mentioned about construction going forward. is that, so is that standard what is being utilized now as we are operating under these new provisions within the stafford act that we just authorized recently? or how does this rus national standard fit in? >> senator, what we did in restoring the system so that people have power was to put it back the way it was, which was designed to a lot of standards that had evolved over many years. but they were standards but there were not standards that were generally adopted throughout the united states, but they were professionally competent standards. what we have now said based in part on the findings of

difficulties that were encountered during the aftermath of hurricane maria, in having material issues, different voltages, issues with the line men who came from the other states to know exactly what they were encountering, we said we are now going to reconstruct the system and all new construction would be to this new national standard which exists already, national standard new to us called the rural utility standard that will identify all the things the practices need to be met as we reconstruct things in the system. not simply put the power back on but as we rebuild the system to be more resilient, to be more able to withstand. >> understand all that, but what you just said is we are rebuilding twice. we rebuild the first time to get things up and running and now

we're going to improve the system. it was my hope that with changes to the stafford act that we would do it once. i understand logistically that the immediate need after an emergency is to get power back to the people. so i guess going to ask you, mre going forward, , with the our u. standards, does this meet what you thought we needed to do with addressing the stafford act limitation? >> the stafford -- no, senator. the components of the stafford act get into being able to redesign in very short time and make those decisions to install. in having spoken with mr. higgins about the rus standards over the last several

weeks, this is an establishment of the standard that will be incorporated for new projects as they go forward. the resiliency that needs to be built into the system comes from a number of different things. standards is still the one component on a going forward basis. but the design and now certain components are integrated, so where the generation is, what type of construction is used on certain polls that are going to be subjected to certain types of wins in hurricane, the ability for the system to disconnect itself and reactivate itself to things like closures, things like that are not components that are going to be impacted by the rus standards. the rus standards will define things like standard full-size, how certain poles guide certain transformers. i know mr. higgins, one of the things we struggled with when we

were voting, going through the emergency restoration component was the disparity of the different types of voltages and have it didn't match up with responding utilities. so what would be a typical voltage in the united states, in the mainland, so that when those crews move from the mainland down to puerto rico they can bring their own stock with them and replace it. in this instance they could not because some of the voltage standards in puerto rico. so those are the things that when you look at resiliency on a much more holistic basis, there's a lot of components that go into it. at a lot of it is design capabilities. utilities to have standard that is utilized by the company. so it's not, this would be in step with moving towards resiliency. it's a big island, 3500 square miles and there's lots and lots of infrastructure. so it will take time to transition through all of those

components, but there are, and we're working very closely with prepa, there are opportunities for resiliency through design and through micro grids and utilization of different technologies and resources to expand the capabilities of the system. >> let me, and this may be both mr. higgins and mr. alexander, in terms of the materials that we have sitting in the warehouses, whether they are in the corps of whether they're going to be transferring over to you, do these materials meet what you will need to match up with these rus national standards? >> yes. as we change voltages into some of the things over time, we will have to get new equipment to replace that. but the things that have been brought back in are adequate to allow us to operate until we make changes in the future.

if a voltage is set at a certain level for a structure, you can't use just any other piece of equipment. you must use one that is adequate for that voltage. many of the things that we will have to do any future will require different equipment to be installed. but i will endorse what mr. walker said. resilience is about not just design, , but also design philosophy, operating philosophy. many things have to be done. that work is really just starting. >> okay. so the stuff you are going to be receiving is material that you will be able to use speedy we will be able to use. it will take years and years for the system to be completely rebuilt. >> got it. so i always hate it when i am asked the question, give yourself a grade on your performance. always much easier to be the teacher and give you the grade, this is national teacher week so

i'm going to ask you each to give yourself a grade on how you feel the rebuild, the response seven months after with regards to the disaster in puerto rico the ongoing to make it easy on you and suggest that it not be a letter grade but let's go back to elementary school where you're given an over outstanding, and as for satisfactory or an in for needs improvement. or an incomplete picture it's always a good one. mr. walker, we'll start with you. >> o plus, senator. >> mr. alexander? >> it's incomplete. our goal is always 100%. >> that's fair. mr. sobrino? >> there's been a lot of f. i think we've aced a couple. we passed others and is need for

improvement in some of those as well. at the end of the day the overall test every pulling the island, that still incomplete, but it is a process and there are a lot of tasks in it. >> mr. higgins? >> you didn't say work in progress was another choice, did you? >> needs improvement, incomplete. >> i think purpose response is gotten better and better as time is going on. i'm fairly new so i can't take credit for any of that -- prepa's. for myself i met the needs to improve the state because we still have a lot to do. i think prepa has learned a great deal about itself and that what its responsibilities are. i was it over all, especially very early, needs improvement, and beginning to get almost satisfactory but it won't be satisfactory until every customer is back in service. >> good. mr. ramon?

>> in improvement, i feel we've wasted two years. the commission was greater in 2014 we did a lot to get prepa up to a much better standard to what it is. definitely the hurricanes have affected the performance of prepa. we were in the process of establishing performance metrics for prepa before the hurricane hit the island. now here kpi is being thrown around which i'm happy to see,, but i feel we've wasted too much time. we still are incomplete and, therefore, to restore power and are still needs a lot of improvement. >> mr. masses? >> a very poor job in having a good electrical grid.

yes, indeed mr. raman is right, the commission's contribute heavily in terms of higher standards in prepa. after maria there's a lot of improvement to be done in order to complete this job. thank you. >> well, thank you all. i think, i think i would agree with what many of you have said, that this is still a work in progress, i think for the people on the ground it's clearly a work in progress and we worry that the progress has not been, has not been fast enough. and it's unnerving, i think, to think that we've got the hurricane season that will once again be upon us and there is a

vulnerability to the people in puerto rico, in the area, but today's hearing, our focus today is on puerto rico and how we are doing in our response. and i appreciate the fact that we all recognize that we have more to do in our various capacities, and appreciate the work that has gone into the response. it has been very complicated. it was extraordinarily devastating to be hit by two hurricanes, and to be laid flat in many areas by the winds that came through. you just, fortunately, we don't see the level of devastation in these very populated areas to very often. and so getting the level of

coordination that need to come together in response was an imperative. and, mr. walker, i think having been on the ground, as you all were, were working with not only a great number of agencies but a great number of volunteers, that really did try to gear up, team up just as quick as possible to provide for that response and that relief. it is recognize that it was a considerable challenge. and you were doing so in an area where you had a system that was troubled to begin with. and so a whole host of issues that had just led to us having this second hearing now within a six-month period following the disaster. know that we will continue as a committee to be vigilant and following this to ensure that the resources that are necessary, that the coordination

that is required will continue. i do hope that we don't take the eye off of the ball until this is done. my fear has always is always after every disaster, that the news is therefore a cycle. the relief efforts are there for a limited period of time, and we move off to the next disaster, to the next issue. and the people who remain vulnerable feel forgotten. well, we are not going to forget the people of puerto rico. we are going to stay on this, and we need your leadership to do just that. so thank you for the time that you have given. i know that other colleagues would be submitting additional question for the record, so hopefully you can do responsive to us as we continue to help in

this important area. so thanks for what you do, and with that, we stand adjourned. thank you for your time today. >> thank you. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

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[inaudible conversations] [inaudible conversations] [inaudible conversations] >> i think, actually i don't want to speak about what i don't know. i don't know -- [inaudible] proposal so i shouldn't

particularly call it that. >> do you see any need for trying to legislate at some point? senator cantwell when she was talking about what they need, she like talk little bit about -- observation from the senate regarding the process. >> i'm not prepared to propose legislation on that at this time. >> could you give us a preview of what you -- [inaudible] >> all right. do you know what is happening next week? we have an appropriations hearing. have appropriations hearing on every one of my accounts.

one of those account is epa. oh, the administrative epa happens to be scott pruitt, he's in the news. everybody has kind of like this is a big investigation hearing. well, yeah, , we are looking at the budget. and so included in the budget will be all kinds of questions about what the president is proposing by way of epa, and i'm sure that there will be questions that will be raised by colleagues about some of the expenditures that are gotten the attention of our ever attentive and media. you can tell either being kind of -- >> cynical about it. [inaudible] >> it's all anybody is asking me and i feel like saint wait a minute, you should be talked about the chairman of the epw committee because that's his committee. but -- [inaudible]

>> that makes me feel better. i'm only looking, because -- [inaudible] >> because he knows. anyway, yes, i think there's been a lot of intrigue over what people are going to ask. and remember that with or without the controversy over some of these spending issues, we would have still had the administered before the committee to advance the budget. >> i do have a policy question. >> on who? [inaudible] >> we are going to have to go. >> okay. [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> "the associated press" and others report the new ceo of puerto rico's power company has announced the public agency will immediately adopt a u.s. national standard as it designs and rebuilds its power grid after last years hurricanes. making it easier to maintain the power lines and replace them after a storm with cruise able to obtain materials more quickly. more than 29,000 29,000 people remained without power, nearly eight months at a category four storm destroyed most of the u.s. territories distribution lines.

>> this afternoon president trump is expected to make an announcement about the iran nuclear deal. the bbc reports european countries have encouraged the president to remain in the accord and say it's the best way to stop iran from developing a nuclear bomb. the white house has signaled that the president might stop short of withdrawing from the deal entirely. live coverage of his remarks in the white house at 2 p.m. eastern. we have more details about what may happen with the iran nuclear agreement on this mornings "washington journal." >> host: we turn to jordan white house correspondent for the hill newspaper. jordan, good morning to you. what's the expectation at this point for the president is going to say at that announcement? >> guest: people expect president trump is going to announce that the u.s. is no longer living sanctions that were lifted as part of the iran nuclear deal. now, the fear is among european

allies that that will trigger iran to begin developing a nuclear program again, raising the risk of conflict in the middle east. this is what's at stake right here. i think as people expect this'll be a partial reimposition of sanctions, not a full exit from the iran deal. but again with president trump you always have to wait and see. >> host: what would that mean, a partial reimposition of sanctions? is that something that congress would have to prove or something the president can do on its own? >> guest: it something the present can do on his own. what it means is, so their whole range of sanctions that were imposed on iran in the lead up to this deal to get them to the negotiating table to pause their nuclear program. what president trump, once they did that the sanctions were waived. they were lifted.ha what president trump wants to do is reimpose some of them because he believes iran is not living up to the terms of the deal.

if that happens, iran, many people fear, it might react poorly and restart part of the nuclear program, and that would be the beginning of the end for the iran nuclear deal. just saw emmanuel macron, angela merkel talked to the president encouraging him to stick with this deal and fix it. the british foreign minister also making the rounds in washington, d.c. yesterday. can you talk a bit to the lobbying campaign in the final minutes here? is the still an effort to try to change the president of mind? >> guest: absolutely. i mean, it's really fast and furious lobbying and campaign with all those european allies visiting and also having conversations with other u.s. officials about this deal. the president in addition to that is taking phone calls from those leaders on a weekly basis. you have to remember that the president has brought on a

couple of hawkish members onto his national security team for critics of this deal. i'm thinking of secretary of state mike pompeo who just started the other week, , and ao the new national security adviser john bolton. they are much more anti-deal than their predecessors rex tillerson, h. r. mcmaster. the president, critics of the deal in addition to supporters. >> host: can you explain why john kerry was speaking with the iranian foreign minister about this? >> guest: john kerry was one of the lead negotiators for president obama in securing this nuclear deal in 2015, so he has an interest in making sure it stays intact. so he was talking the u.n. a few weeks ago with the iranian foreign minister, his former negotiating partner. this angered president trump, you know, raising accusations that he is improperly trying to influence u.s. diplomacy and

really ignited a fire in this are only huge debate in the nuclear deal than what we have seen tweets from the president targeting john kerry and what is calling his shadow diplomacy. before you go, is there anything the white house can do to formally sanction john kerry for doing that? can theyan shut down his discussions with iranian officials, or is this something that a former secretary of state is allowed to do? >> guest: well, some trump supporters have raise the possibility that john kerry violated the logan act, which is this obscure law from the 1700s that bands private citizens from conducting certain diplomacy or foreign affairs for the unitedun states. this law has never been successfully tried. if you remember there were accusations that michael flynn and of the people on the trump team violated this lawmp during the transition when they were

talking with russian officials, and nothing came to pass with it either. so i doubtpa there's anything tt the trump administration to do other than criticize john kerryy to get them to stop these mr. geithner jordan fabian, anything else you know about this 2:00 announcement coming up, or anybody will be standing with the president when he does it? >> guest: yeah, it's still to be determined i think but he will be speaking from the white house, likely to a national television audience, explaining his decision. you have to remember the u.s. intelligence community believes iran is upholding the terms of the deal. he's going to need to explain why he's taking steps to step away from something that his own .government believes is being upheld. >> host: jordan fabian covering for the hillng newspap, he is the white house correspondent. appreciate your time as always. thehill.com if you want to see his work. >> the president will be making his announcement in the rose garden today at 2 p.m. and will

have live coverage on c-span2. >> homeland security secretary kirstjen nielsen testifies on her departments 2019 budget proposal before a senate appropriations subcommittee. you can watch that today live at 2:30 p.m. eastern on c-span3. two more president trump's picture the cia gina haspel testified before the senate intelligence committee asbell the confirmation hearing on her nomination. live coverage begins at 9:30 a.m. eastern also on c-span3. c-span3. you can watch the hearing at c-span.org or by using our free c-span radio app. >> former justice and defense department officials from the obama and george w. bush administration's talked about the potential for russia and other foreign adversaries to hack u.s. elections. they address cyber threats, disinformation