Fiscal board approves EcoEléctrica BESS contract, but imposes conditions
- The San Juan Daily Star
- 6 hours ago
- 4 min read
By THE STAR STAFF
The Financial Oversight and Management Board has approved, with conditions, a proposed contract between the Puerto Rico Electric Power Authority (PREPA) and EcoEléctrica BESS LLC for the development of a 20‑megawatt battery energy storage system (BESS) in Peñuelas.
BESS technology stores electricity generated from various sources and dispatches it during periods of high demand or generation shortfalls -- an essential component of stabilizing the island’s fragile grid.
According to the information in the oversight board’s website, the board conditioned the approval of the contract on the developer seeking investment tax credits to reduce rates for consumers.
The contract, structured as a standard offer amendment to PREPA’s existing power purchase and operating agreement with the company, is part of the Accelerated Storage Addition Program (ASAP). The Puerto Rico Energy Bureau (PREB) previously reviewed and approved the agreement on Sept. 30, 2025, determining it aligns with Puerto Rico’s Integrated Resource Plan and the island’s energy public policy.
Under the proposal, EcoEléctrica BESS will design and construct the storage facility, with a contract term of 20 years from its commercial operation date and the possibility of two five‑year extensions subject to PREB approval. The oversight board reminded PREPA that any extension must also be submitted for review before it can take effect.
The project carries an estimated maximum cost of $131.1 million, including roughly $12.3 million in passthrough costs tied to the addition of full‑station Black Start capability. The PREB and LUMA have stated that this feature would bolster grid reliability and could speed the restart of associated thermal generation plants by up to 80 hours after major events such as hurricanes.
A key condition imposed by the oversight board concerns the investment tax credits (ITCs) that the developer has not secured. Although energy storage projects in Puerto Rico are generally eligible for these federal credits, LUMA Energy, the private operator of PREPA’s transmission and distribution system, has indicated that the resource provider does not expect to obtain them. The contract sets the monthly storage capability payment price (SCPP) at $16,000 per megawatt (MW) if ITCs are received, but at $20,600 per MW if they are not.
To protect ratepayers, the oversight board is conditioning its approval on the developer making “good‑faith and diligent efforts” to obtain the credits. PREPA must receive quarterly reports from EcoEléctrica BESS documenting those efforts and share them with both the PREB and the oversight board. If the company ultimately cannot qualify, PREPA must provide independently certified documentation supporting that determination before the higher price can take effect.
“According to LUMA, the Resource Provider has not obtained, and does not expect to obtain, ITCs to finance the Storage Facility purportedly because of the current tax structure,” the oversight board said. “We note, however, that energy storage facilities developed in Puerto Rico are generally eligible for ITCs. Additionally, obtaining ITCs would maintain the SCPP at $16,000 per MW per month, ultimately preserving ASAP’s value proposition and resulting in lower costs for ratepayers.”
The board emphasized that its review was limited to determining compliance with Puerto Rico Oversight, Management and Economic Stability Act, or PROMESA, requirements related to competition and fiscal plan alignment. It did not conduct a legal review of the contracting process, nor did it engage in due diligence regarding the contracting parties. Any material modification to the agreement must be resubmitted for approval, the board said.
Construction begins on 2nd BESS project in Vega Baja
The island took another significant step toward modernizing its electrical grid on Thursday as Gov. Jenniffer González Colón and Genera PR announced the start of construction on the island’s second utility‑scale BESS. The project, located in Vega Baja, is expected to help reduce up to 90% of load‑shedding events once the full 430 MW of planned storage capacity is installed across the island.
The Vega Baja initiative involves the demolition and removal of former peaker units at the site, clearing the way for the development of a new foundation that will support a 49‑MW BESS installation. According to Genera PR, battery units designated for the facility have already begun arriving in Puerto Rico.
In February 2025, Genera PR and Tesla signed an agreement to deploy Megapacks at six power plants: Cambalache (Arecibo), Vega Baja, Palo Seco (Toa Baja), Yabucoa (Humacao), Aguirre (Salinas) and Costa Sur (Guayanilla). The installations will collectively add 430 MW of storage capacity, marking Tesla’s largest project of its kind in the United States.
The initiative is supported by $767 million in federal funding, including $533.5 million for equipment and $235.7 million for installation. Of the equipment allocation, $404.7 million -- representing 76% of approved federal funds -- has already been disbursed and reimbursed through the Federal Emergency Management Agency (90%) and Puerto Rico’s Department of Housing via Community Development Block Grant Disaster Recovery funds (10%). All facilities are expected to be operational by the end of 2027.
Local and federal officials attended the announcement in Vega Baja, including Mayor Marcos Cruz Molina, District 11 (Dorado, Vega Alta, Vega Baja) Rep. Elinette González Aguayo, and District 12 (Morovis, Manatí, Vega Baja) Rep. Edgardo Feliciano Sánchez.
Also present were key energy and government leaders: Winnie Irizarry, CEO of Genera PR; Iván Báez, vice president of public and government affairs at Genera; Energy Czar Josué Colón Ortiz, who also heads the Public‑Private Partnerships Authority; PREPA Executive Director Mary Zapata Acosta; Housing Secretary Ciary Pérez Peña; and César Cajigas Villanueva, associate energy director at COR3.
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