THIS WEEK AT A GLANCE
FEMA authorized $1.18 billion for 176 reconstruction projects across Puerto Rico, unlocking funds that had been delayed under DHS Secretary Noem’s large project review requirement. The release followed congressional oversight pressure led by House Homeland Security Committee Chairman Andrew Garbarino, who had been pushing DHS for months to release delayed disaster aid nationwide. Puerto Rico was among the largest beneficiaries.
Also this week: the U.S. approved a subsea power cable between the Dominican Republic and Puerto Rico capable of transmitting 700 MW of electricity in both directions. Senators Heinrich and Murray, joined by 17 bipartisan lawmakers, called DOE’s cancellation of Puerto Rico energy projects “illegal.” DOE issued its largest loan in history — $26.5 billion to Southern Company — and COR3 made its legal certification for FEMA-funded contracts voluntary.
PUERTO RICO IN WASHINGTON
FEMA Authorizes $1.18 Billion for 176 Reconstruction Projects in Puerto Rico
Date: February 26, 2026
FEMA authorized $1,183,611,623 for the execution of 176 reconstruction projects across Puerto Rico, releasing funds that had been delayed under a DHS policy requiring Secretary Noem’s personal approval on any FEMA expenditure over $100,000. The release came as part of a broader nationwide push to clear a multibillion-dollar backlog in disaster aid, following months of congressional oversight pressure led by House Homeland Security Committee Chairman Andrew Garbarino (R-NY), who sent a letter to DHS in January calling for the expedited review and release of critical funds.
Of the total, $316.6 million corresponds to hazard mitigation funds under FEMA’s Accelerated Award Strategy (FAASt). The funds will support projects across approximately 40 municipalities, including reconstruction of electrical grid infrastructure, water and sewer systems, schools, and public housing.
Why This Matters: This is the single largest release of FEMA reconstruction funds for Puerto Rico in recent memory. The fact that it came as part of a nationwide effort to clear a backlog — not as an isolated action — is significant context. Chairman Garbarino’s sustained oversight of DHS created the conditions for this release across multiple states and territories. Government contractors, subrecipients, and municipalities with approved projects should be preparing to move immediately on execution, as COR3 will be under pressure to demonstrate progress. The release also underscores the importance of federal procurement compliance: with over $1 billion now flowing, oversight scrutiny on how these funds are spent will intensify.
U.S. Approves Subsea Power Cable Between Dominican Republic and Puerto Rico
The U.S. has approved a subsea power cable between the Dominican Republic and Puerto Rico, expected to be completed by 2031. The cable would allow 700 megawatts of electricity to be transmitted in both directions between the two islands.
Key Details:
Why This Matters: This is a potentially transformative infrastructure project for Puerto Rico’s energy sector. A 700 MW interconnection would represent a significant share of the island’s total generation capacity and could fundamentally change the economics of renewable energy investment on the island. If Puerto Rico can export surplus solar generation, it creates a revenue stream that could help finance grid modernization. Energy developers, IPPs, and renewable energy investors should be tracking this project’s permitting timeline closely.
Bipartisan Lawmakers Call DOE Cancellation of Puerto Rico Energy Projects “Illegal”
Senators Heinrich (D-NM) and Murray (D-WA), joined by Resident Commissioner Hernández and 17 other lawmakers from both parties in the House and Senate, sent a letter to DOE criticizing the department’s recent cancellation of Puerto Rico energy projects. The lawmakers characterized the cancellations as “illegal” and called for the projects to be reinstated.
Why This Matters: Bipartisan congressional pressure on DOE to reinstate Puerto Rico energy projects signals that the cancellations have generated political risk for the department. The breadth of the coalition — 19 lawmakers across both chambers and both parties — increases the likelihood of congressional oversight hearings or legislative action to compel reinstatement. Government contractors and energy developers with projects affected by the cancellations should be monitoring this closely.
COR3 Makes Legal Certification Voluntary for FEMA-Funded Contract Filings
Date: February 26, 2026
COR3 issued Memorandum COR3-OL-2026-02 informing all FEMA-funded subrecipients that the legal certification previously required as part of the contract evaluation process will no longer be mandatory for initial contract filings. The certification had been used as a documentary control mechanism to strengthen procurement files and mitigate risks to federal fund eligibility.
While the certification is now voluntary, COR3 strongly recommends that subrecipients obtain legal review of their procurement processes — particularly in early stages — to identify compliance risks before submission. COR3 expressly reserved the right to require a legal certification or memorandum at any stage of the evaluation process on a case-by-case basis, particularly for complex procurements, deviations from permitted acquisition methods, documentation deficiencies, or potential conflicts of interest.
Why This Matters: With $1.18 billion in FEMA funds now authorized for Puerto Rico, this timing is critical. The voluntary certification does not reduce the compliance burden on subrecipients — federal procurement rules remain fully in effect, and COR3 retains discretion to require legal review at any time. Subrecipients who skip the certification assume the full risk of non-compliance findings, audit flags, or fund eligibility determinations. Given the scale of funds now flowing and the heightened federal scrutiny that accompanies it, obtaining independent legal review of procurement processes remains a best practice.
AGENCY WATCH: DOE & FERC
DOE Issues Largest Loan in Department History: $26.5 Billion to Southern Company
Date: February 25, 2026
DOE announced a $26.5 billion loan to Southern Company — the largest in department history — projected to save Alabama and Georgia customers over $7 billion in electricity costs. The investment is expected to lower Southern Company’s interest expenses by $300 million annually, create thousands of jobs, and increase grid reliability.
Puerto Rico Connection: This loan demonstrates a federal financing model that could be applied to modernize Puerto Rico’s grid and reduce electricity costs. The scale and structure of the loan — designed to pass savings directly to ratepayers — is exactly the kind of mechanism Puerto Rico energy advocates have argued should be deployed on the island.
$171.5 Million for Geothermal Energy Research
Date: February 25, 2026
DOE announced $171.5 million in funding to expand U.S. geothermal energy research and exploratory drilling. The U.S. currently leads the world in geothermal electricity capacity at approximately 4 gigawatts, with DOE analysis projecting potential growth to 300 gigawatts by 2050.
Puerto Rico Connection: While there are currently no active geothermal plants in Puerto Rico, some experts have identified geothermal potential on the island. New federal research funding could create opportunities for Puerto Rico to explore this resource as part of its broader energy diversification strategy.
FERC Submits Interregional Transfer Capability Report to Congress
Date: February 25, 2026
FERC submitted its interregional transfer capability report to Congress, analyzing how electricity moves between regions and how to strengthen interstate connections to ensure adequate power supply. The report found that evaluating the need for more interregional transfer capability would be beneficial, though it stopped short of recommending specific transmission development.
OTHER DEVELOPMENTS
Progressive Senators Push Back on LNG Export Expansion
Progressive senators urged Energy Secretary Wright to halt plans to double U.S. liquefied natural gas exports, arguing that rising exports have contributed to higher domestic utility bills. LNG exports grew 26% in 2025, with an additional 8% increase expected in 2026. The U.S. exported over 100 million metric tons of LNG last year for the first time in history. Average U.S. household electricity costs rose nearly 6.7% in 2025 compared with the prior year.
LOOKING AHEAD
March 4, 2026: Energy Subcommittee legislative hearing — “America’s Energy Infrastructure: Authorizing Pipeline Safety” (Rayburn 2123, 10:15 AM). This is the PHMSA reauthorization hearing and the first Energy Subcommittee action since the cybersecurity markup in early February.
On Our Radar:
NEED MORE DETAIL?
Maceira Zayas Law offers in-depth regulatory analysis, legislative tracking, and staff training on federal energy developments affecting Puerto Rico. For questions about any item in this briefing, or to schedule a consultation, contact:
Anthony O. Maceira, Managing Member
amaceira@mzls.com
© 2026 Maceira Zayas Law. All rights reserved. This briefing is provided for informational purposes only and does not constitute legal advice.
