WASHINGTON – Two House Natural Resources Committee panels will hold hearings on Puerto Rico this month to discuss the possibility of energy reform and federal oversight for the ailing commonwealth, according to a committee spokesperson.
The first hearing, to be held by the Subcommittee on Energy and Mineral Resource is scheduled for Jan. 12. It is expected to focus on shifting Puerto Rico's reliance on oil to natural gas for electricity generation. The Subcommittee on Indian, Insular and Alaska Native Affairs, chaired by Rep. Don Young, R-Alaska, plans to hold a hearing on Jan. 26 on the need for federal oversight of Puerto Rico's financial decisions.
Witnesses for the hearings are not yet official, but will include representatives from here and from Puerto Rico as well as those on the regulatory and industry side of the issues to be considered, the spokesperson said.
Rep. Nydia Velazquez, D-N.Y., criticized the energy and minerals subcommittee hearing, saying Republicans are choosing to tackle secondary topics instead of "the critical issue of restructuring Puerto Rico's debt." She does not sit on the natural resources committee.
"The time for hearings on ancillary topics has long passed," she said. "Congress needs to move legislation swiftly that would give Puerto Rico authority to restructure its debt, just as other localities are able to do."
Resident Commissioner Pedro Pierluisi, D-P.R., a member of the full natural resources committee, released a statement thanking the energy subcommittee for holding a hearing.
"The high cost of electricity is a serious problem in Puerto Rico, for both individuals and businesses," he said. The resident commissioner added he plans to question the witnesses about the steps needed to make the transition to natural gas and restructure the Puerto Rico Electric Power Authority to make its infrastructure more cost efficient.
Pierluisi will be allowed to attend the hearing and question witnesses even though he does not sit on the subcommittee holding the hearing.
The hearings follow a statement by House Speaker Paul Ryan, R-Wis. on Dec. 16 that the House committees with jurisdiction over Puerto Rico will work with commonwealth officials to come up with a "responsible solution" to the fiscal and debt crisis on the island by the end of March.
The Natural Resources Committee wants to look more at the "bigger picture" in its approach to Puerto Rico than the more often discussed Chapter 9 bankruptcy option, over which the House Judiciary Committee has jurisdiction, the spokesman said. The committee plans to merge any energy and oversight legislation into a larger congressional package for consideration by March, he said.
Puerto Rico's downward spiraling finances, including bond defaults and its struggle to pay its almost $70 billion in debt, has drawn increasing attention. Puerto Rico Gov. Alejandro Garcia Padilla has made clear the territory cannot pay its debt, but will try to prioritize payments for its constitutionally guaranteed general obligation debt.
The commonwealth defaulted over the summer on $57 million of Puerto Rico Public Finance Corp. debt and on Jan. 4 when it missed $37.3 million of payments on Puerto Rico Infrastructure Financing Authority and PFC bonds. Analysts said the recent default, which was part of nearly $1 billion of payments due, was small compared to what it could have been. Puerto Rico observers have said the default is likely to trigger lawsuits from creditors and generate additional congressional and government interest in extending help to the island.
There are already a slew of bills in Congress that aim to address Puerto Rico's problems.
Companion bills by Democrats in the House and Senate would put a temporary moratorium on litigation over Puerto Rico debt from Dec. 18 through the end of March until Congress provides some relief to the commonwealth.
The three Republican chairs of the Senate committees with jurisdiction over Puerto Rico have proposed a bill that would authorize the creation of an oversight authority and divert $3 billion of unallocated Affordable Care Act funding to help Puerto Rico stabilize its budget and debt in the short-term. It would not extend bankruptcy protection to the commonwealth.
Rep. Sean Duffy, R-Wis., is sponsoring a bill that would give Puerto Rico access to bankruptcy protection contingent on the commonwealth's acceptance of oversight from a presidentially-appointed five-member financial stability council.
Separate bills by Democrats in the House and the Senate, would extend Chapter 9 bankruptcy access to the island's public authorities.
The Treasury Department also laid out a four-part plan last year that includes bankruptcy access for the entire commonwealth in exchange for a federal oversight body, reforms to Puerto Rico's access to healthcare and tax programs, and funding to update and modernize the commonwealth's antiquated accounting and disclosure practices.
