In September 2017, Hurricanes Irma and Maria, both Category 5 storms, caused catastrophic damage to the U.S. Virgin Islands (USVI). On September 6, the eye of Hurricane Irma passed over portions of the USVI—including St. Thomas and St. John—with maximum winds of 185 miles per hour (mph). On September 20, the eye of Hurricane Maria swept near St. Croix with maximum winds of 175 mph. The USVI government estimates that uninsured damage from the hurricanes will exceed $7.5 billion. According to the Virgin Islands Water and Power Authority (VIWAPA), the public water and power utility on the USVI, the Estate Richmond (St. Croix) and Krum Bay (St. Thomas) power plants fared "relatively well during the passage of Hurricane Maria" and provided uninterrupted electrical service to hospitals. However, according to the USVI recovery funding requests, the government estimates that 80-90% of the power transmission and distribution systems across the USVI were damaged. Recovery efforts from the hurricanes initially focused on maintaining electricity to hospitals and restoring electricity to water treatment plants and some industries. Governor Kenneth Mapp announced on January 10, 2018, that the goal to restore power to 90% of "eligible customers" had been met. According to the U.S. Department of Energy (DOE), as of January 31, power has been restored to 93% of total customers (99% of eligible customers) across the USVI. Before the 2017 hurricane season, VIWAPA was already challenged with fiscal problems and aging infrastructure. Although the USVI has never defaulted on its obligations, it shares similar fiscal challenges as other islands in the Caribbean. These include high debt levels, pension obligations, decreasing tax bases, and outdated infrastructures. Policymakers are currently considering possible options for rebuilding the electricity grid on the islands, given the financial debt before the damage from the storms. VIWAPA's financial obligations, according to 2016 financial statements, include $232 million in outstanding debt along with an adjusted net pension liability of $259 million. The USVI government's much larger public debt, described in more detail below, may also affect rebuilding and investments in infrastructure. Should Congress consider funding for electric power restoration, management of the electric power system by VIWAPA or alternatives to VIWAPA may be considered. This report presents a history of VIWAPA, describes issues related to the debt in USVI, and offers some options if Congress considers restructuring the electricity system. Improving the resiliency of USVI's grid will be expensive. Congress may consider whether investment incentives to form public-private partnerships could provide alternatives for modernizing the USVI's grid. Congress may also consider the role of comprehensive energy planning and whether the efforts to restore electric power in USVI will need to progress beyond simple restoration of electricity, and require new investment and oversight by the federal government. The U.S. Virgin Islands are located about 45 miles east of Puerto Rico and about 1,000 miles southeast of Miami, FL. The USVI has a total land area of 134 square miles—nearly twice the area of Washington, DC—and is comprised of three primary districts, the islands of St. Croix, St. John, and St. Thomas. St. Thomas is the primary center for tourism, government, finance, trade, and commerce, and is home to the capital, Charlotte Amalie. The island of St. John lies to the east of St. Thomas. The Virgin Islands National Park covers nearly two-thirds of the island of St. John. St. Croix—situated approximately 40 miles south of St. Thomas and St. John—is the agricultural and manufacturing center of the USVI. In addition to the three large islands, there are approximately 50 smaller islands and cays within the USVI. The British Virgin Islands (BVI) are generally located to the east of the USVI. The USVI population was estimated at 103,700 persons in 2015, and about half of the population resides in Charlotte Amalie. The USVI economy in the past decade has struggled to cope with the closure of a major petroleum refinery in 2012 as well as a long-term decline of manufacturing employment. While the unemployment rate in 2008 (5.8%) equaled the U.S. average, USVI unemployment rose to 13.4% in 2013 and then declined to 10.3% in April 2017, remaining well above the mainland rate. Median household income in the USVI, according to 2009 Census Bureau estimates, was $37,254, well above that of Puerto Rico ($18,314) but below the U.S. level ($50,221). A similar pattern emerges from 2015 estimates of per capita income. Estimated USVI income per capita was $22,653, which was above that of Puerto Rico ($11,394) but below that of the United States as a whole ($28,930). The purchasing power of USVI incomes is diminished by the relatively higher costs of living, including the cost of energy, which is especially high relative to the mainland and other areas. In recent years, the USVI economy has depended heavily on tourism and related trade. In 2015, the USVI hosted 2.6 million visitors, 80% of which arrived on cruise ships. Hotels and other tourist facilities in the Caribbean are typically the largest commercial consumers of electric power. The islands' manufacturing sector, which had played a major role in economic development in the 1960s, is now a minor part of the USVI economy, aside from two rum distilleries, which are heavily subsidized with pub lic funds. Slightly more than 600 people were employed in manufacturing in 2015, mostly in small firms. The February 2012 closure of the HOVENSA refinery compounded economic challenges presented by the 2007-2009 Great Recession. Located on St. Croix, HOVENSA was one of the world's largest petroleum refineries, employing about 1,200 people and nearly 1,000 contractors. The refinery operated as a joint venture between Hess Oil, a U.S. company, and Petróleos de Venezuela, a petroleum company owned by the Venezuelan government since 1998. HOVENSA filed for bankruptcy under chapter 11 of the Bankruptcy Code in September 2015. Some facilities were purchased by Limetree Bay, which maintains an oil storage facility in the USVI. That facility initially employed approximately 80 people, but now employs about 650. The government of the U.S. Virgin Islands received $220 million as part of the agreement to resolve HOVENSA's assets, which was used to cover the government's budget deficit for 2015. Despite the conversion of facilities to oil storage after ceasing refining and petroleum product exports, the refinery closure is estimated to have caused an annual decline of approximately $140 million in tax revenues. Since 2015, economic growth had recovered somewhat after several years of declines in the USVI gross territorial product (GTP). Economic data, however, have been scarce after the hurricanes of September 2017. The public sector of the U.S. Virgin Islands faced serious fiscal challenges even before Hurricanes Irma and Maria. The USVI ran a $110 million deficit in FY2017, with ongoing annual structural deficits of about $170 million. The USVI government's long-term debt, according to FY2016 financial statements, totaled $2 billion, not including $3.4 billion in unfunded pension liability and VIWAPA debt. Several news reports in the last year have posed pointed questions about the sustainability of the islands' public debts. On a per capita or on a percentage of GTP basis, those debt levels are extremely high compared to other subnational governments. Concerns about debt levels had led each of the three major credit ratings agencies to downgrade the islands' public debts in January 2017. Those concerns intensified in the wake of the September 2017 hurricanes, as rating agencies complained of incomplete financial information from the USVI government. Within a month, two agencies withdrew their ratings and Moody's initiated a review of USVI bonds. At the end of January 2018, Moody's asserted that the USVI government would likely need to restructure its debts. Most of USVI's debt is structured as revenue bonds, which may restrict the islands' government's fiscal options. In recent years, the islands' government has run structural deficits and has used bond proceeds to cover shortfalls. Most recently, the islands' government took steps to issue bonds in August 2016, which were to be used to cover financing shortfalls for its FY2017 budget. That issue was postponed until January 2017 and then cancelled. The apparent lack of access to capital markets at reasonable rates has left the islands' government with a narrow set of liquidity resources. The USVI Senate President, according to media reports, stated that the USVI "government [is] experiencing a financial crisis of great proportions." Governor Mapp, inaugurated in January 2015, proposed a series of measures intended to strengthen public finances, including certain tax increases and measures to constrain public spending. A package of tax measures, including higher taxes on beer, liquor, sodas, and timeshare rentals, which were part of the governor's proposals, was enacted on March 22, 2017. The governor also announced that a $40 million revenue anticipation note would be issued through Banco Popular, which he contended would provide the USVI government with liquidity through September 2017. Despite the devastation left in the wake of Hurricanes Irma and Maria, the Mapp Administration has sought to reassure bondholders that the USVI government would honor its financial commitments. The USVI government, nonetheless, faces serious fiscal challenges, even as the Federal Emergency Management Agency (FEMA) has provided at least $456 million in disaster assistance.