• The San Juan Daily Star

Governor confident PREPA will prevail in court against PUMA in diesel dispute

Gov. Pedro Pierluisi

By John McPhaul

Gov. Pedro Pierluisi Urrutia said Monday that he is confident that Judge Anthony Cuevas Ramos will validate the Puerto Rico Electric Power Authority’s interest in using fuel from a pump connected to a valve controlled by PUMA Energy and which supplies fuel for the San Juan Power Plant from the Cataño Oil Dock.

“Although I recognize contractual rights, sometimes they have to yield to the interest of the state,” the governor said at a press conference. “We are going to defend that essential electricity service that our people need, tooth and nail.”

Pierluisi did not want to answer when asked if PUMA Energy’s attitude could be a reason to cancel the contract that the company still has for $605 million with PREPA.

Last Saturday, PREPA Executive Director Josué Colón Ortíz acknowledged at a press conference that if PUMA Energy does not allow the diesel fuel to reach the San Juan Power Plant, selective blackouts will be necessary.

“We do not have all the units available to supply electricity at all times,” Colón Ortiz said in response to questions from the press. “If, on top of that, the units that are supposed to be in service cannot be due to lack of fuel, that creates an unforeseen situation that puts us in a situation susceptible to load changes, and we are not going to allow that.”

PREPA and PUMA Energy are at odds because the company lost a $265 million contract to supply diesel to the public corporation. PUMA Energy still has a $605 million contract to supply Bunker C fuel.

The controversy springs from the fact that PREPA at the moment only has diesel available until mid-December. Therefore, the only facility available for that purpose is the Cataño Oil Dock, which is managed by a group of companies that include PUMA Energy and Best Petroleum.

Novum, the company that obtained the contract to bring diesel to PREPA, contracted with Best Petroleum to use the facilities to supply the fuel. However, a valve has to be closed so that the fuel reaches the Central San Juan power station. PUMA Energy claims it owns that valve and did not agree to close it. The company made it a condition for closing the valve that it be awarded a one-year contract to bring diesel to PREPA’s other facilities, which was rejected by the public corporation.

Last Friday afternoon the conflict went to San Juan Superior Court, where Judge Anthony Cuevas Ramos ordered PUMA Energy to allow PREPA to receive the fuel, for which a hearing is to be held this Friday to resolve the dispute.

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