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  • Writer's pictureThe San Juan Daily Star

Environmental groups call for probe into purchase of power generators

Last week, the Financial Oversight and Management Board authorized a contract with New Fortress Energy to maintain 14 temporary supplemental generators at the Central Palo Seco and San Juan power plants.

By The Star Staff

The Queremos Sol (We Want Sun) coalition is demanding that the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice investigate the “illegal authorization” of 17 temporary generators that burn methane gas in Puerto Rico’s power plants.

Last week, the Financial Oversight and Management Board authorized a contract with New Fortress Energy, the parent company of Genera PR, that stems from the Puerto Rico Electric Power Authority’s (PREPA) need to keep 14 temporary generators in the Central Palo Seco and San Juan power plants in response to the need for additional energy generation following the impact of Hurricane Fiona.

The generators were installed by the Federal Emergency Management Agency (FEMA) and the U.S. Army Corps of Engineers under an emergency mission that concluded last Friday. The generators, which are owned and are currently being operated by the seller, produce some 350 megawatts (MW) of additional power generation capacity to Puerto Rico, representing some 10% of the installed energy in Puerto Rico and 15% of the power supplied to PREPA’s electrical grid as of November 2023.

The generators’ useful life lasts until Dec. 31, 2025, after which they will be retired. By then, further stabilization of the legacy generation assets that were damaged as a result of Hurricane Fiona is slated to occur, and other generation sources, such as renewable energy and energy storage projects, are expected to be in place.

The proposed contract contemplates the purchase of the generators for a maximum payable amount of $306.5 million, of which 25%, or $76.6 million, was due at closing. FEMA will cover 90% of the maximum payable amount, which amounts to $275.9 million. The remaining 10% will be covered with PREPA’s own funds. PREPA certified that the funds required to cover its 10% share have been allocated.

Last Friday, the oversight board received information from PREPA and the Puerto Rico Public-Private Partnerships Authority indicating that various generators will require preventive maintenance to avoid deterioration.

“We understand that two of the original 17 generators were backup generators and thus are not in rotation,” an oversight board document notes. “We further understand that the expectation is that the 14 units to be acquired continue to produce the approximate 350 MW.”

The seller agreed to provide maintenance to seven of the 14 generators at no cost, according to information provided to PREPA after the contract was sent to the oversight board for approval.

“Further, the Oversight Board is concerned with the Seller’s untimely disclosure of the condition of the Generators,” the board said. “This issue should have been disclosed and resolved prior to PREPA submitting the Proposed Contract for the Oversight Board’s review and approval.”

According to Queremos Sol, Genera PR brought in the methane gas generators under the excuse that they could not generate enough energy for Puerto Rico’s electrical system.

“They were installed as a ‘temporary’ solution without the proper permits, due to the supposed emergency,” said Ruth Santiago, a member of the Queremos Sol coalition. “And now the temporary solution becomes permanent if the government of Puerto Rico and PREPA acquire these polluting generators, ignoring their impact on the health of the surrounding communities and the environment and wasting hundreds of millions of dollars that could well be used to deploy photovoltaic systems on roofs with storage, which is what people need.”

In a letter addressed to the regulatory agency, Queremos Sol charged that the EPA’s action is contrary to the Clean Air Act because the operator of the units, Genera PR – a subsidiary of New Fortress Energy LLC – has admitted that the methane-burning generators are “significant” sources of pollution, which requires obtaining Prevention of Significant Deterioration (PSD) permits prior to their construction.

“PSD permits determine what pollution controls must be installed and what emissions limits must be met before operation begins, but EPA has not issued such permits or required these polluting generators to stop operating until the permits are issued,” said Pedro Saadé, another member of the coalition.

As New Fortress Energy admitted, the temporary generators at the Palo Seco and San Juan plants have operated almost non-stop since their installation in October 2023.

“This has exposed residents of a dense and already contaminated urban area to illegal levels of air pollution,” Saadé said.

The Queremos Sol coalition highlighted that the Clean Air Law does not allow excuses or free passes to pollute as the law unequivocally states that pre-construction permits be evaluated and issued before the facilities begin operations. For this reason, the group requested a formal investigation in a letter sent to EPA Inspector General Sean W. O’Donnell and Michael E. Horowitz, inspector general of the United States Department of Justice.

“Furthermore, we have seen Genera’s delay in scheduled maintenance and repair work, which would appear that they are creating the crisis to justify the need,” said Ingrid Vila Biaggi, president and co-founder of CAMBIO, one of the proposing organizations of Queremos Sol. “However, we have not seen any action from local or federal agencies requesting explanations or issuing fines for non-compliance.”

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