On September 20, 2017, Hurricane Maria made landfall in Puerto Rico as a Category 4 storm with sustained wind speeds of over 155 miles per hour. The hurricane also brought torrential rainfall with a range of 15 to 25 inches in many areas and 40 inches or more in isolated spots. This resulted in widespread flooding across the island. Puerto Rico's office of emergency management reported that the storm had incapacitated the central electric power system, leaving the entire island without power. Puerto Rico's grid infrastructure was essentially destroyed by Hurricane Maria. Recovery efforts from Hurricane Maria focused on restoring electricity to hospitals, water treatment plants, and some industries. However, the Commonwealth of Puerto Rico (the Commonwealth) was already in recovery mode following the glancing blow struck by Hurricane Irma on September 6, 2017, which left 70% of electricity customers without power. After Maria, officials were estimating that many of Puerto Rico's 3.5 million people could be without electricity for up to six months. Even before the 2017 hurricane season, Puerto Rico's electric power infrastructure was known to be in poor condition, due largely to underinvestment and poor maintenance. Questions are now being raised as to possible options for rebuilding the electricity grid on the island, given the financial debt of the Puerto Rico Electric Power Authority (PREPA) before the damage from the storms. PREPA's current debts at the end of 2016 totaled about $9 billion. PREPA is overseen by a board appointed by the Puerto Rican governor. Some have blamed much of PREPA's woes on governance issues. Hurricanes Irma and Maria brought the electricity system's problems to a head, as power outages before the first storm were eclipsed in magnitude by the island-wide power outages brought on by the destruction of the second storm. Power outages in Puerto Rico have been common, as an apparent lack of maintenance and vegetation management practices have contributed to power outages. Some have questioned PREPA's dispensing with long-established practices (e.g., a request for proposals) following its posthurricane decision to give a major repair and reconstruction contract to a small firm. This decision seemed to eschew normal industry practices which rely on mutual aid as a primary route to system restoration. With the poor state of the electricity system (physically, organizationally, and financially), and a perceived lack of transparency with regard to decisions (both before and since Hurricane Maria), some have called for a new electricity system regime to lead the reconstruction and resiliency planning efforts ahead. Should Congress decide that alternatives to PREPA be considered, the question of what entities and structures could replace PREPA will arise. This report presents a history of PREPA, describes issues related to the debt crisis in Puerto Rico, and offers some options if Congress wants to consider restructuring the electricity system in Puerto Rico. Modernizing Puerto Rico's grid, and taking the next steps to incorporate resiliency, will be expensive. Congress may want to consider whether investment incentives to form public-private partnerships could provide alternatives for modernizing Puerto Rico's grid. Congress may also want to consider whether the efforts to restore electric power in Puerto Rico will need to progress beyond simple restoration of electricity, and require new investment and oversight by the federal government, especially if Congress considers the further goal of building a resilient grid. Puerto Rico was in a fiscal, economic, and social crisis before Hurricane Maria destroyed the electric grid on the island. Some 3,900,000 people live in Puerto Rico, approximately one-third of them within the San Juan metropolitan area. The island, with an area of 3,435 square miles (9,000 sq. km)—110 miles long by 39 miles wide—has a mountainous interior and is surrounded by a wide coastal plain where the majority of the population lives.... Manufacturing, for so many years the workhorse of the island economy, has been hit by competition from low-cost destinations, as well as high local utility, shipping, and other fixed costs. The sector's decline began in 1996, when a 10-year phase-out of U.S. industrial tax breaks began. This marked the end of 75 years of federal incentives that attracted stateside industries and helped make Puerto Rico the Caribbean's industrial powerhouse. Puerto Rico's economy has shrunk by about 15% in the last decade. The fiscal cuts to deal with Puerto Rico's debt crisis and the economy's downward direction, according to one analysis, are projected by the Centre for International Governance Innovation "to result in an additional 12 percent contraction in Puerto Rico's economy over the next 10 years." Approximately 45% of Puerto Rico's population lives under the poverty level. An estimated 47.5% of the Commonwealth's population participates in the labor force, with the island territory having the highest unemployment rate in the United States at 10.1%. Puerto Rico's population has fallen by about 11% in the last decade, and the population has declined about 2% in each of the past three years. The migration of Puerto Rican residents to the mainland reflects challenging economic circumstances and also implies a shrinking customer base for goods and services on the island, including the consumption of electric power. Uncertainty about future demand levels provides another complication to the revitalization of PREPA. PREPA is a public power utility owned by the Commonwealth of Puerto Rico, and is the largest supplier of electricity in the Commonwealth. As of 2014, according to the American Public Power Association, PREPA was one of the largest public power utilities in the United States, serving approximately 1.4 million customers. At that time, PREPA ranked in the top 10 of U.S. public power utilities in terms of net electric power generated, with about 12.7 million megawatt-hours (MWh). In 2014, PREPA sold approximately 17.3 million MWh, which included sales for resale and sales to ultimate consumers of electricity. Revenues from electricity sold in 2014 totaled approximately $4.6 billion (from sales for resale, and sales to ultimate consumers of electricity). Generating electric power anywhere in the world has historically been based on available resources. The Puerto Rico Water Resources Authority (PRWRA) was formed in 1941 with the aim of consolidating existing power operators into an integrated publicly owned utility that could respond to increased demand for electric power, which Puerto Rico was experiencing at the time. As the agency's name suggested, hydropower originally was a major source of electric power. In that respect, Puerto Rico is very similar to some of its Caribbean island neighbors. As demand for electric power grew, the PRWRA purchased the Puerto Rico Railway Light and Power Company and the Mayagüez Light Power and Ice Company in 1945. Over time, Puerto Rico shifted from hydropower dominance to petroleum. Generating power with fuel oil or diesel was a logical choice in the absence of other nonhydro resources. Currently, heavy fuel oil (e.g., number 5 or 6 residual fuel oil) is the dominant source of electricity in Puerto Rico. Unlike most of its island neighbors, Puerto Rico imports coal to fuel its pulverized coal power plant at Guayama, which represents almost 8% of overall electricity generation. In 1950, PRWRA began operating its first thermoelectric facilities fired by petroleum fuels with the San Juan (400 MW), Palo Seco (602 MW), and Costa Sur (990 MW) power plants. In 1979, the Puerto Rico Water Resources Authority changed its name to the Puerto Rico Electric Power Authority. Other major power plants include the Aguirre thermoelectric (900 MW) and Aguirre combined-cycle power (592 MW) plants. As shown in Table 1 , most of the island's electricity is generated at five PREPA-owned, petroleum-derived fuel power plants: Costa Sur, Aguirre, Palo Seco, San Juan, and Cambalache, which are responsible for about 62% of total electricity production capacity. Other large generation (owned by nonutility independent power producers) includes the EcoEléctrica plant, which is fueled by natural gas from imported liquefied natural gas (with about 9% of overall generation capacity), and the AES facility at Guayama, fueled by imported coal. Much of the island's electricity is generated at power plants (e.g., at Aguirre, Costa Sur, AES, and EcoEléctrica) on Puerto Rico's southern coast (see Figure 1 ), located relatively far away from the major population centers. Approximately 2 million of Puerto Rico's people reside in the large urban areas in and around San Juan, Bayamón, and Carolina, on the northern coast of the island. As a result, most electricity must be sent by transmission lines over the island's forested, central mountain range. The almost 6 GigaWatts (GW) in power generation capacity in Puerto Rico has long been dominated by fossil fuels. Figure 2 illustrates that continuing dependency, as petroleum and coal accounted for approximately 64% of generation in 2016. Natural gas and renewable sources accounted for approximately 36% (34% natural gas, 2% renewables). Renewable generation mostly came from several small, privately owned wind and solar photovoltaic (PV) power installations, collectively providing less than 160 MW of capacity. Even before Hurricanes Irma and Maria hit Puerto Rico in September 2017, the finances and operations of PREPA had attracted the attention of Congress. PREPA's debt—about $9 billion—is larger than that of any other operational U.S. public corporation. High electricity prices and the unreliability of power supply resulting from deterioration of the island's generating and transmission infrastructure have hindered the island's economic development prospects and the well-being of its residents. Two threads of policy developments have shaped Puerto Rico's energy sector. First, Puerto Rico's government has taken steps to modernize its energy policy and grid, although implementation of changes has been slow and at times contentious. Second, PREPA has faced increasingly severe financial constraints.