Energy regulator demands answers from Genera on fuel conversion infrastructure

Palo Seco Power Plant in Toa Baja

By The Star Staff

The Puerto Rico Energy Bureau (PREB) has requested explanations from Genera PR about the lack of fuel conversion infrastructure in the temporary generating units installed by the Federal Emergency Management Agency (FEMA) and the U.S. Army Corps of Engineers (USACE) after Hurricane Fiona.

The regulatory body has questioned Genera, the private operator of the Puerto Rico Electric Power Authority (PREPA) power plants, about the lack of necessary infrastructure so the plants can operate using diesel or natural gas.

In a resolution and order, the PREB stated that “the temporary generating units installed by FEMA and USACE at the Palo Seco and San Juan Power Plants were designed to primarily operate on natural gas, with diesel as a backup, from the moment of their installation.”

Furthermore, in response to media reports regarding the availability of natural gas supplies, the PREB found that Genera lacks the infrastructure needed to switch from natural gas to diesel in the temporary units, despite ongoing claims to the contrary.

As a result, the PREB has given Genera 10 days to explain why the necessary infrastructure for switching fuels is unavailable, particularly in light of the natural gas shortage and Genera’s repeated assertions that the units are dual-fuel.

Additionally, the PREB has ordered both Genera and PREPA to submit monthly reports starting on Aug. 15. The reports must detail any incidents or limitations related to the inability to switch fuels, the impact of such limitations, technical documentation, and measures taken or planned to address those issues, as well as the results of any claims associated with the natural gas supply contract.

The reports should also include “all instances in which diesel has been used instead of natural gas since the beginning of the contract, the causes of each incident, corrective actions taken, and evidence of claims made under the contract,” as stated in the resolution and order.

The PREB reiterated its responsibility to ensure regulatory compliance and the prudent use of public funds.

“One of the most important roles of the Energy Bureau, as the regulator of the electrical system, is to ensure compliance,” the PREB noted. “Therefore, it must take all necessary actions and make regulatory determinations to ensure that its regulated entities provide safe, reliable, and reasonably priced electric service.”

The temporary units installed at the Palo Seco and San Juan plants were authorized to operate until March 15, 2024. However, due to the ongoing need for energy backup, FEMA allocated over $335 million to extend their operation until December of this year.

The document also warns Genera and PREPA that failure to comply with the resolution and order will result in fines.