Disaster Response and Mutual Aid

Legislation would ease cost of waiting for FEMA reimbursement

Marco Rubio and Rick Scott, Republican Senators from Florida, recently introduced the Fairness in Disaster Relief Act (S. 3407), which would authorize the President to reimburse local governments for interest payments on loans needed to cover disaster recovery and mitigation expenses that will be reimbursed under the Stafford Act, but for which the Federal Emergency Management Agency has yet to make payment.

Rep. Neal Dunn, R-Fla., first introduced the legislation (H.R. 5059) in the House in November 2019.

 At issue is the fact that cities wait years for FEMA reimbursement and find themselves paying millions of dollars of interest on loans taken out to cover expenses that FEMA will eventually reimburse.

“The Florida Municipal Electric Association (FMEA) applauds Senators Rubio and Scott for introducing this important legislation,” said Amy Zubaly, Executive Director of FMEA.

In 2017, Hurricane Irma made landfall in the Florida Keys as a strong and powerful Category 4 hurricane, significantly impacting Keys Energy Services, one of Florida’s public power communities. As Irma continued up through the peninsula of Florida, it left its mark on every electric utility in Florida, including all 33 public power utilities.

Exactly eleven months later, Hurricane Michael, one of the strongest and most powerful hurricanes to ever make landfall in the United States, entered the Florida panhandle, leaving devastation and destruction in its wake. Five Florida public power communities experienced the wrath of Michael, with some systems needing to be completely rebuilt.

“Between those two hurricanes, FMEA’s members have filed more than $150 million in claims to FEMA for public assistance, just on the electric side of their operations. To date, they’ve received less than $10 million,” Zubaly said. “The amount of devastation experienced by some of my members was indescribable. These communities worked around the clock, doing an incredible job restoring power to their customers quickly and safely, but those efforts came with significant costs.

“For several of these communities, their hurricane restoration costs far exceeded the amount of reserves at hand, requiring them to take out loans to cover the costs until their reimbursements from FEMA were received. With the reimbursement process taking years in most cases, the interest on these loans have topped $1 million a year for some member utilities.

“We are hopeful that this legislation will not only provide financial relief in covering the costs of the interest incurred during these disasters, but hopefully expedite the reimbursement process overall,” said Zubaly.

The legislation has been referred to the Senate Committee on Homeland Security and Governmental Affairs.