Puerto Rico Resident Commissioner Grills Expert On 'Near Monopoly Power' For Natural Gas Company

4 months ago

During a House Natural Resources Committee hearing before the Congressional recess, Puerto Rico Resident Commissioner Pablo José Hernández Rivera asked Executive Director of the Financial Oversight and Management Board of Puerto Rico Robert Mujica Jr. about a contract for energy in Puerto Rico.

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00:00And at this time, I would like to recognize the representative from the state of Washington,

00:05Ms. Randall, for five minutes. Ms. Randall. Thank you so much, Mr. Chair, and thank you

00:10to our witnesses here to testify. This is a new policy area for me, and I've been very interested

00:18in learning about the challenges in both fighting corruption, but also supporting the liberty and

00:26sovereignty of the Puerto Rican people. I would like to yield the balance of my time to the

00:32resident commissioner from Puerto Rico to complete some questions he has. Thank you, my dear colleague

00:37Randall. Mr. Mojica, let's talk about things that Congress can do to help Puerto Rico's financial

00:43stability. Would it be good for Puerto Rico for Congress to approve a new tax incentive

00:49for manufacturing to bring back manufacturing to the island?

00:52I'd say, and I think you mentioned this in an earlier part, the loss of 936 contributed

01:03significantly to the economic decline that has happened since then over 20 years. There's been

01:10some blips in between, but you can see a clear path that the economic decline is tied to that

01:15incentive, and that incentive also brought tremendous economic growth. So, you know, I'd leave it

01:20to Congress as what they decide, but I can tell you that that incentive and the loss of that incentive

01:25severely impacted the economy of Puerto Rico and led to some of the actions that led to the bankruptcy.

01:31And for the benefit of my colleagues, there is bipartisan legislation for a new tax incentive

01:36that would focus on supply chain resiliency by giving incentives for companies that relocate from

01:42foreign countries to Puerto Rico, and this will help the country as a whole. And brief history lesson,

01:48936, which was a great incentive for Puerto Rico, was a great incentive for the United States,

01:53and the reason it was eliminated was because the resident commissioner at the time believed it

01:58was incompatible with statehood for Puerto Rico because the requirements of the uniformity clause.

02:03So it's important that we don't let status politics meddle with Puerto Rico's economic development,

02:07and I'm sure that that's something where we can find common ground. Would it be useful or positive for

02:12Puerto Rico to get equal treatment in federal programs like Medicaid, Medicare, and SNAP?

02:20So all the territories are treated differently in some of these programs, and we've advocated for

02:26the SNAP program. I believe there was some bipartisan support for changing that program that would result

02:31in more funding. You know, there is an issue that's realistic with regard to the taxing situation

02:37that affects it, and I know that's something that's been discussed. But we need certainty

02:43with regard to the Medicaid program. You know, the fact that it expires and there's a cliff

02:47prevents long-term budget planning in Puerto Rico. Thank you, and I'm sorry to interrupt,

02:52it's just because of the limited time. And that's another area where there's opportunity for bipartisan

02:56collaboration. The Medicaid extension is supported by Governor González-Colón, Fair Treatment and Medicare

03:01Advantage as well, and the transition to SNAP as well. So I think that's an area where we can work together

03:07to benefit Puerto Rico and the nation more broadly. Mr. Mojica, last week the board voided a 15-year

03:13multi-billion dollar LNG contract between the government and New Fortress Energy. In your opinion,

03:20or in the board's opinion, was that deal rushed through a non-competitive process?

03:26We haven't voided it. We're still reviewing it. Do I think the deal is rushed? Yes. We need time to

03:32evaluate it. We're speaking to the people who negotiated the contract and we have not found

03:37anyone yet who defends all the terms of that deal. That is where we are right now. And just for time's sake,

03:43can you answer yes or no questions? The following ones. Does that contract hand one company near

03:48monopoly power over Puerto Rico's energy supply? That contract does provide exclusivity for all of the

03:56PREPA for any additional LNG supply. Thank you. Was it written so one-sided that it favored New Fortress

04:03over the people of Puerto Rico? It seems to be a one-sided contract and based on what the people who

04:09negotiated the contract told us, these were the terms that were given to them and there was almost

04:15no flexibility in negotiating those terms. And do you think that a fair, transparent process would have

04:20delivered lower costs and more flexibility for our energy future? We think there are probably better

04:26terms that we can work out with that contract and we're working on those. And who would you consider

04:30the party primarily responsible for negotiating this bad contract for the people of Puerto Rico?

04:36Our understanding is the negotiation happened through an organization called the 3PPO,

04:41is the entity that negotiates these contracts. On behalf of the government of Puerto Rico, right?

04:46Yes. Okay, thank you. I'm almost out of time. There are concerns over the board's

04:55striking down contracts for renewable energy, that that has slowed down Puerto Rico's energy

04:59reconstruction. I share a lot of those concerns as well as the ones related to net metering. I see

05:05that I'm out of time, but I wanted to state that for the record and I'd like to submit questions for

05:10the record in writing for later on. Certainly without objection. Thank you. The gentleman's yield,

05:14talking to the President till the time is expired,

Puerto Rico Resident Commissioner Grills Expert On 'Near Monopoly Power' For Natural Gas Company

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