Fiscal board approves PREPA fuel supply contract
By The Star Staff
The Financial Oversight and Management Board for Puerto Rico announced Tuesday the approval of the proposed $265.5 million fuel supply contract between the Puerto Rico Electric Power Authority (PREPA) and Novum Energy Trading Inc.
The contract’s goal is to provide fuel for the San Juan, Palo Seco, Aguirre, Mayagüez and Cambalache power plants, and PREPA’s gas turbines.
The contract includes payment for fuel at market prices and a fee for logistics and delivery, known as a price adder.
The price adder negotiated under PREPA’s enhanced procurement process is about 19% lower than the $9.63 million adder of the current supplier, Puma Energy Caribe LLC, which has been PREPA’s sole provider of diesel fuel since 2014.
“The proposed contract is the result of a competitive procurement process that led to more favorable terms and will produce measurable savings compared to PREPA’s existing diesel fuel supply contract,” the oversight board’s executive director Natalie Jaresko said in a statement.
“The proposals received show there is market appetite to supply PREPA with diesel fuel in a transparent bidding process,” she said. “PREPA should take advantage of this renewed interest and continually look for new opportunities to achieve the best possible terms for Puerto Rico’s consumers.”
The contract with Novum is a one-year agreement expected to become effective on Nov. 21, extendable for an additional one-year term under the same terms and conditions, if both parties agree.
Earlier this month, the oversight board approved a $6.2 million contract with the firm King and Spalding and a $3.1 million contract with the advising firm Sargent and Lundy Puerto Rico.