The San Juan Daily Star
Energy Bureau launches probe into slow-paced Tranche 1 green energy tender
By The Star Staff
The Puerto Rico Energy Bureau (PREB), the regulator of the island’s energy sector and the entity in charge of implementing renewable energy policy, on Thursday announced it will investigate the processes related to the Tranche 1 tender to determine if it is in line with the island’s renewable goals and to hold accountable the Puerto Rico Electric Power Authority (PREPA) officials who work directly with power purchase agreements.
The Tranche 1 tender, launched in February 2021, consisted of the procurement of 1,000 megawatts (MW) of renewable energy capacity and 500 MW of battery storage. The PREB this week extended to May 31 the deadline for the closing of nine of the 23 renewable and battery storage contracts for Tranche 1 slated to expire this week. The rest of the contracts will expire in mid-June. The process to close the contracts was delayed because the service providers sought amendments to contract terms in order to accommodate inflation and pricing changes. PREPA officials also blamed LUMA Energy for the delay as it failed to provide information on interconnection costs.
Despite the problems, PREPA closed seven of the nine contracts slated to expire April 26. One of the contractors, which has two contracts, decided to use the extension to negotiate certain interconnection matters with LUMA Energy, but it expects to close by the new May 31 deadline, the STAR learned. Four of the proponents dropped out of the process.
“In view of the fact that the delays associated with Tranche 1 of renewable energy and storage projects could affect the legal goals in the short, medium and long term, known as the Renewable Energy Portfolio, and being the entity in charge of supervising and ensuring the compliance with the Renewable Energy Portfolio, the Energy Bureau rules that it is necessary to carry out a comprehensive investigation of all the processes related to Tranche 1, including the officials of the Electric Power Authority and any other electric service company that in some way or another participated and/or made decisions regarding Section 1,” the PREB resolution reads.
PREB Chairman Edison Avilés Deliz said the bureau, through the integrated resource plan, an adjudicative process and with citizen participation, followed the path to achieving the goals of the Renewable Energy Portfolio that Puerto Rico’s public energy policy requires. He said the contracts for the Tranche 1 projects should have closed already.
“The action plan to obtain the necessary renewable energy is based on a competitive process for the acquisition of energy divided into six tranches within a period of three years,” he said. “The first section began on February 22, 2021 and has not yet finished,” he said.
The PREB, in accordance with the provisions of Article 6.11 of Law 57-2014 and Section 15.01 of Regulation 8543, put Gerardo A. Flores, a lawyer, in charge of the probe. He will have the power to administer oaths and take depositions, issue subpoenas, receive and evaluate documents, preside over the hearings, hold conferences to simplify procedures, and use the mechanisms provided by the law to investigate.