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  • Writer's pictureThe San Juan Daily Star

Court, fiscal board approve millions in energy-related contracts

Punta Lima wind farm in Naguabo (TCGM/Facebook)

By The Star Staff

Title III bankruptcy judge Laura Taylor Swain has allowed the Puerto Rico Electric Power Authority (PREPA) to assume the power purchase and operating agreement (PPOA) with Punta Lima, according to a recent order.

Developed by Elawan, the 23-megawatt (MW) wind energy facility in Naguabo was rebuilt after Hurricane Maria rendered it inoperable six years ago.

PREPA and Punta Lima entered into the original PPOA contract in 2009, which provided for an energy purchase price of $0.125 per kilowatt hour (kWh) of net electrical output (expressed in kilowatt hours) from the project, with such amount subject to annual escalation at a rate of 1.5%. However, on Sept. 20, 2017, Hurricane Maria inflicted significant damage to the project, rendering it inoperable.

“The assumption of the Punta Lima PPOA does not give rise to any claim for cure costs, and the assumption of the Punta Lima PPOA shall not result in a breach or violation of, or not otherwise defined herein shall have the meanings given to them in the notice,” read the court order.

The Financial Oversight and Management Board approved the current version of the Punta Lima PPOA last year.

Meanwhile, the oversight board approved several contracts for LUMA Energy, including a contract with Wright Tree Services Inc. for vegetation clearing service for $488 million and an initial term of 12 months with an allowable two additional terms of 12 months each by mutual agreement.

The board also approved a contract between LUMA and CSA Architects & Engineers LLP for architectural and engineering services. The contract contemplates assistance to LUMA in the permanent improvement, strengthening, and hardening of the electrical grid and LUMA’s distribution and operations infrastructure. The proposed contract has a maximum payable amount of $79 million.

The oversight board also gave the green light to another $79 million contract between LUMA and Integra Design Group PSC and a $59 million contract with Ray-SECo PSC. Both are for design and engineering services aimed at improving, strengthening, and hardening LUMA’s transmission and distribution infrastructure to enhance operational resilience.

In addition, the board allowed a $172 million one-year contract between LUMA and Ceres Environmental Services Inc. for vegetation clearing services.

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