Energy in 2027: What a Democratic Congress Can Fix, and What it Can’t

Part of a post-election series today exploring the impact on business in Puerto Rico.

Puerto Rico heads into 2027 paying a record 33.86 cents per kilowatt-hour, against a mainland residential average of 18.3 cents, according to Energy Information Administration data cited by Fortune.

A typical 800 kWh household bill rose about 18%, to $271, on Oct. 1. Since Oct. 31, the San Juan and Palo Seco units have been burning costlier diesel after New Fortress Energy stopped delivering natural gas, and the government says substitute fuel has already cost more than $100 million.

Two forces shape what comes next: the federal retreat from renewable energy and the fuel shock from the Iran war. The new Democratic majority has real but very different leverage over each.

The 2025 tax law ended the 30% residential solar credit at the close of 2025, according to E&E News. It struck a market where rooftop systems had passed more than 10% of consumption, as PV magazine reported in September 2025.

Leased systems still qualify for credits, which favors third-party installers, while utility-scale projects had to start construction by July 4, 2026, or be in service by the end of 2027.

The sharper blow came from the Energy Department. The $1 billion Puerto Rico Energy Resilience Fund, created by Congress in 2022 and championed by former Secretary Jennifer Granholm, was terminated in January.

About 6,000 low-income and medically vulnerable households had received solar and batteries, and more than 12,000 approved homes were left waiting, according to a lawsuit filed Oct. 30 in federal court in San Juan. The department told Congress up to $350 million would go to “practical fixes to improve generation,” Latitude Media reported.

Rooftop solar still pencils out for many homes and businesses at today’s rates, and net metering remains protected by local law. But the federal subsidy that drew middle-income buyers is gone.

What the new majority can change

Restoring tax credits is the hardest path. Chuck Schumer pledged in March to restore and expand them if Democrats won. That takes a tax bill with 60 Senate votes and the president’s signature.

With 56 seats if Alaska and Mississippi hold, Democrats would be four Republicans short of breaking a filibuster, a gap that narrows on energy-cost measures with home-state appeal, though it’s altogether possible for Dems to persuade four Republicans to join a veto override.

Still, appropriations offer the faster route. In February, Martin Heinrich, the top Democrat on Senate Energy and Natural Resources, joined Patty Murray and Resident Commissioner Pablo José Hernández in demanding reinstatement of the cancelled awards, in a letter co-signed by 17 lawmakers from both parties.

Heinrich is in line to chair that committee and Murray is expected to lead Senate Appropriations, where spending bills can direct how energy funds are used.

The rest of Puerto Rico’s watch list: Ron Wyden at Finance, who writes energy tax law; Frank Pallone at Energy and Commerce, who has vowed to prioritize clean energy; and Jared Huffman at Natural Resources, who released the GAO audit finding $10.7 billion in grid funds undisbursed.

Among the newcomers, none is known to have yet staked out a Puerto Rico energy agenda, so the incumbents hold the keys.

The war, the price of oil and what Congress can do

Since the war began Feb. 28, Brent crude has swung between about $70 and $120 a barrel. It settled at $98.29 on Nov. 5, according to published market reports, after new tanker attacks near the Strait of Hormuz, and President Trump has threatened to resume major strikes after the midterms.

Petroleum supplied 63% of Puerto Rico’s overall energy use in 2024, so every swing reaches the island’s bills.

Congress can end a war two ways. A war powers resolution forces a vote, but the president can veto it, and overriding this one requires two-thirds of both chambers. Four Republican senators backed one this year, though two, Susan Collins and Bill Cassidy, leave office in January.

The stronger lever is the power of the purse. Schumer said Nov. 4 that “we are going to end the war,” citing funding as a tool. Barring money for hostilities in a must-pass spending bill forces a negotiation, but the 2007 Iraq precedent, when a veto stripped a withdrawal timeline, shows its limits.

Does American gas lower the bill?

In part. Puerto Rico already buys more American gas than ever: about 35% of its LNG came directly from the United States in 2025, and 59% counting Mexican LNG made from U.S. pipeline gas, according to a Cato Institute analysis of industry data.

U.S. gas prices are set largely by domestic supply and tend to be less exposed than oil-linked fuels to shocks like the strike on Qatar’s Ras Laffan complex. And as the governor noted this week, gas costs less than the diesel it replaces.

The constraints are shipping and suppliers. The Jones Act requires U.S.-built ships between U.S. ports; the one qualifying LNG carrier serving the island, Crowley’s American Energy, is nearly 32 years old.

In 2019, the Democratic chairman and Republican ranking member of House Transportation jointly opposed a Puerto Rico LNG waiver, and the change in leadership is unlikely to alter that labor-backed consensus. Meanwhile, the New Fortress rupture shows that a single supplier can cost more than any price swing.

The bottom line: Congress can pry loose some clean-energy money and press to end the war, the one move that would ease global fuel prices. The cost of the next kilowatt-hour, however, depends more on fuel contracts, the Energy Bureau’s scrutiny of pass-through charges and how quickly the island replaces its gas supplier.