Mr. Julio is the executive director, the ceo for the Virgin Islands water and power authority, thank you for joining us. He will be followed by mr. Jose morales who is the acting chairman for the Puerto Rico Energy commission. We welcome you, and finally we will have natalie who is the executive director for the Management Board for puerto rico. Welcome to each of you. I would ask that you limit your comments this morning to five minutes, your full testimony will be included as part of the record but i do know colleagues have questions as you have obviously seen from the first panel, there was some directed to our governors that they different so we had the expertise from this panel. Hopefully you will be able to address those in your Opening Statement or in your followon questions. Welcome. German murkowski, Ranking Member cantwell and senators, thank you very much for the opportunity to appear today. Although i am present here physically, my thoughts, my focus are on the people of puerto rico and on the workers on the ground reestablishing power to all of our customers. When i became executive director in march 2017, i knew we faced significant challenges but i never imagined we would face the unprecedented National Crisis caused by two massive hurricanes in just two weeks. Hurricane maria damage nearly every single station, shut down Power Transmission lines across the entire island, devastated operations of control centers and left portico without electrical power. The external challenges that we have phase, hundreds of destroyed structures, substations, distribution poles, lines, transformers were destroyed or damaged. Medications in control centers were inoperable. We were forced to resort to shore way radios and satellite phones to get some sort of medication with our Operational Centers and power plants. They were used by the Salvation Army to use our facilities to go through the radio. Once we are able to establish that medication centers and made it difficult or impossible to assess the damage in some areas. It took us nearly a full week to make contact. In total, today, load has been restored to 49 and we have successfully focused on restoring power to customers including hospitals, water and Sewage Treatment plants. Agencies providing essential services. Water systems and hospitals, im happy to report weve reached 85 . We continue to have challenges, however the area is currently without power and more isolated and more mountainous. Its not as easy to reach those areas. Restoring power to the communities require unique skills and it will take more resources. In this extraordinary recovery effort, the island needs your support. I would like to take a moment to address Whitefish Energy. They receive many offers of assistance from Different Companies. Including one from whitefish. Whitefish indicated that have access to more than 100 workers with 100 pieces of equipment and a large stock of supplies. After the devastation of hurricane maria, i believe they were unable to meet the requirement for mutual assistance. Such as providing accommodations and other logistics. Senators for three weeks, they were suffering for lack of fuel, lack of food and drinking water, lack of ice which is important on a tropical island. How could i have counted on bringing more people into that situation. I needed people that were selfcontained, military unit types that would bring everything. After reviewing half of those proposals from First Responders, only to offer Immediate Service services, meaning there were the first that would be able to arrive, one proposal required 25 million because of the situation. The other offered the ability to pay only for work that was completed taxpayer money was never at risk. There is never an expenditure of 300 million, they get paid when the line theyre working on is finished and delivered and energized. We continue to seek assistance others. I chose to contract with whitefish. Finally, even during the recovery they continue to focus on the plans for the future, Market Pricing that recognizes the cost of delivery. I am grateful for the thousands of employees and we have made significant progress but much more remains to be done. Madame chairman, thank you very much for the opportunity to be here today. I will be happy to answer any questions you may have. Thank you. To determine, members of the United States committee of energy and natural resources. By way of introduction my name is julian. On behalf of my governing board, i would like to thank you for this invitation to appear before this body and provide an overview of authority and the challenges we confront after the aftermath of two hurricanes that left devastation in its wake. Its in the midst of recovery and rebuilding from two major hurricanes which hammered a territory in september. Theres considerable damage, damage that has not been worse than almost two decades. Before i discussed the direct effect of hurricanes, give me the opportunity to discuss how that authority operates. Like so many other caribbean counterparts, the Virgin Islands has no conventional Energy Resources to meet its needs. While the u. S. Mainland can connect to other power grids, Power Companies such as whoppers do not enjoy that interconnection. The three major islands, st. Thomas, st. John and st. Croix are separated by water basin larger challenge. For the bulk of the 53 year history, theyve maximize the benefit of Market Conditions and utilized oil to produce electricity. Given the separation, Distribution Systems are required on st. Thomas and st. Croix. St. Croix is located to the south of st. Thomas and is not interconnected due to the depth of the ocean floor which is approximately 5 miles deep. They plan to diversify the dependence on fuel oil by reducing it by 2025. The diversification strategy began to take hold with the implementation of net metering, connection to the solar grid and most notably the introduction of liquefied Petroleum Gasoline as a primary source of fuel for electricity. This was achieved through partnership with a Multinational Company to build and operate terminals to provide propane supply and oversee the generation of units from solely fuel generated units to try capable units. At the same time the fuel diversification was diverging and pursue integrated Resource Plan which mapped out the generation mix for the utility over the next two decades. Taking a page from our plan, the authority in march entered into a contract to provide degeneration with authority. We expect these to be operational in mid 2018. To focus specifically on hurricane impacts, the most of tens of damage was expensed by the transmission Distribution System and the overall electrical grid. The two power plants estate richmond worked fairly well. Minimal damage for the Transmission System suffered major damage after Hurricane Irma of 80 on st. Thomas, 90 on st. John the two outlying islands each suffering 90 . Hurricane maria renders about 60 of the st. Croix system. We are in the process of rebuilding before we can completely restore our customers. Our commitment to rebuild and reenergize by december. The on ominous task is further competent by challenges of mobilizing materials necessary for the restoration effort. Because of the unique geographical location, we have struggled to be able to move materials and equipment from the United States to the Virgin Islands for the past several weeks. The hurricane also had a devastating effect on the financing of the actual utility. The utility, prior to the storm generated about 26 million in revenue. Currently we are less than 2 million. Month in terms of revenue. Because of the actual price tag, they can actually top 300 million, the financial herder is hard to overcome. Equally concerning are the operational cost, the cost of restoration, our cost associated with prestorm obligation, contractual agreements and previous finance agreements. In the aftermath of catastrophic hurricanes, our task is not only to rebuild but the fact that theres more resiliency. We do not want to rebuild the system that is the same as before. We want to be more resilient, more hardened and do it by micro grid, under grounding and composite poles. Senator, im available to answer any questions and i thank you for the opportunity. Thank you. Mr. Morales. Chair member, Ranking Member and members of the committee, i am the acting chairman of the Puerto Rico Energy commission. Thank you for an inviting me to be here. My testimony makes four points. The commonwealth expert on the electric industry performance, the commission establishes performance standards and pressures while in storing investor confidence. The current emphasis is to restore and transform the industry collectively. For 70 years they operated an integrated or regulated monopoly. The legislature. [inaudible] its created and empowered to use pressures to transform puerto ricos selected industry. The duties are illustrated by the opening provisions of the act. The Commission Shall be able to guarantee the Orderly Development of our electrical system and the provision of electric Power Services at reasonable prices. When establishing standards, the goal is to induce performance comparable to what an effective competition would produce at a reasonable cost. When injecting competition they strike and reward the most costeffective entities. When it becomes reasonable among all the. [inaudible] integrated Resource Plan and performance proceeding with the commission issued the first over in which 3. 5 billion in annual cost were established by an independent body of experts. The order detail the extent of system deterioration any budgeting and spending. The current emphasis is to restore and cap effectively. To identify short, medium and longterm actions that would produce a system that is modern, flexible, resilient and capable of reasonable prices. The difficulties with restoring service show the need to evolve greater resilience is an foster restoration. The commission will promote these technologies, increase private participation and reduce dependence on centralized generation with the goal of enabling us to respond to future emergencies more quickly and cost effectively. also to identify trends of alternative market structures for products and services. Competition for Competitive Services and determine appropriate roles for the generation and resources. The need for independent, free of politics and focused on merits with a single goal of bringing costeffectiveness and competitive to the the commonwh most important infrastructure industry could never be greater. Chairman murkowski, Ranking Member cantwell and members of the committee, thank you for this opportunity to testify and i look forward to your questions. Thank you, mr. Morale is. Ms. Jaresko, welcome. Im natalie maresca, director of management and board for more paprika. It is an honor to appear before the committee. I am not an Energy Expert but i will try to frame for the committee the board approach to the islands power system. Let me first if im a step back that the Oversight Board is a creature of congress created in last years legislation to do with the fiscal and debt crises faced by the commonwealth and many of its instrumentalities including its his power system prepa. The problems were designed to address work decades in the making. Our primary tool story restore access to the private Capital Markets are certified fiscal plans. Before the hurricanes will put in place fiscal plans and associate budgets for the commonwealth and several of its instrumentalities including have that were balanced without additional federal aid. Because the commonwealth and some instrument tells including prepa had an enormous and unpayable debt burden the end of the bankruptcy like process established by title iii. That is more or less what matters to before the hurricane and in the boards of you after the hurricanes the boards role of providing confidence, oversight and transparency is even more important to the welfare of the people of puerto rico and the protection of taxpayers. We are an Oversight Board or card wishes to be able to assure all stakeholders from residents of the island to congressional members, from creditors to american taxpayers at the commonwealth and into instrumentalities are fiscally responsible and selfsufficient. To do so were utilizing all the tools Congress Gave us to the fullest extent possible. We have the power to certified fiscal plans that meet the goals and deny those that dont. Were the power to require thats been the in accordance with the certified fiscal plans and annual budget and where the power to review contracts to acquire they be consistent with certified fiscal plans. The truth is the recovery of the island now depends not only on fiscal discipline but much more importantly on federal hurricane relief. We must revise our fiscal plans reflect the new realities of declining revenues, postal savings at the need for emergency and recovery related expenditures. There is no way around it. The meeting human needs and the longterm success the board was established to facilitate defense on the continued generosity of american taxpayers in the form emergency supplemental appropriations. Similarly the success of our mission depends on the people of puerto rico and its businesses especially its manufacturing base, having the confidence, that timely and sizable federal aid is coming and will be sufficient for the rebuilding and the recovery. In particular the number of people and businesses that lead i have been over the coming months will be deeply affected by the perception where the necessary help is forthcoming. The board joins with the government and people of puerto rico turning back to the power sector this is the single most important block of recovery short and longterm. Our electricity is the key. Without it we will not have functioning classrooms or businesses without it we will not have truly safe and livable neighborhoods, homes. Without it we would even have a working water system because it depends on the restoration of power. Similarly we will not succeed in achieving a longterm sustainable economy which is the mission of unless we can create a reliable affordable sustainable power system. Preface history and systems decrepit condition force service nitrates before the hurricane evidence that fundamental change is needed. The board working with the governor and prepa antennas required transformation of prepa and its revise fiscal plan. That flight is scheduled for certification by the board in the final, first stage, excuse me come february. That plan needs to chart a path to provide stable reliable and caustics effective power via a great set of corporate best practice, private capital and acts as a catalyst for sustained economic growth. And then all of this must be reflected and confirmed in a plan of adjustment proposed by the board that also brings an end to the debt restructuring and ensures the future path for prepa. I commit the prices of revising the fiscal plan will be open and transparent and it will welcome the insight from abroad right of experts to weve already scheduled Service Stakeholder listing sessions and we of course welcome input from the members of the committee, those testify here today, and all of this with good ideas. Again, thank you for the opportunity to testify today and i look forward to the committees questions. Thank you, ms. Jaresko. Thank you all for your testimony here this morning. I think you have, youve heard as you have listened to the questions directed to governor rossello, some frustration may be a bit of frustration, questions about why mutual aid was not triggered earlier. Obviously questions about the whitefish contract and what has happened with that. Clearly an issue of concern for all of us. At senator cantwell mention, its one thing to be responsive in the immediate aftermath of a hurricane. Its another thing to be engaged in something that we would all call couching of the taxpayer when you look at the terms that were agreed to couching. It indicated and the governor said this as well, that right now its about 49 power throughout puerto rico. We recognize that in, particularly in the more intricate parts of the island its going to be a long time before we see power to the ivan. There was an article a couple days ago that on thursday there was a major outage in the area that apparently that whitefish had been working, and that you literally went from, this is quoting this article, went from 40 of power down to 18 . Question to you is, are we seeing, have gone backwards in certain areas . Have we seen parts of the efforts that were rebuilt failing . The 49 that you are saying today is something that i understand is fluid. The governor has said that he wants to be 95 by the end of the year. Is that realistic . And really what does that mean . Because what i was told was that, that may be 95 to certain areas, but longterm for the island of puerto rico, when did you realistically envision power to the full island . So the question for you. So lets go to the first one. We suffered an outage last week, not related to anything failing on any of report repair infrastructure. After the failure we flew over in helicopters to find out the reason. We believe because they denied it, there was an