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  • Writer's pictureThe San Juan Daily Star

Governor: Proposed P3 for power generation is three-fifths approved, with P3 Authority board

Gov. Pedro Pierluisi said negotiations with the proposed operator of the island’s legacy power

plants are underway.


Gov. Pedro Pierluisi Urrutia said it is very likely that the Public-Private Partnership Authority (P3A) board may approve on Friday the proposed public-private partnership for the generation, operation and maintenance of Puerto Rico Electric Power Authority (PREPA) legacy plants.

“This contract has to be approved by, among other entities, the Public Private Partnership Authority board; it has to be approved by the board of the Authority itself,” the governor said Thursday at a press conference.

“It has to be approved by the Electric Power Authority, the governing board of the electric power authority. It has to be approved by the Energy Bureau and approved by the oversight board [the Financial Oversight and Management Board],” he said. “So there are five entities that must approve the public-private partnership contract before it can be signed. And practically all those entities that I have just mentioned have already approved it, except the board of the Public-Private Partnerships Authority, which has a meeting scheduled for Friday of this week, and the Board of the Electric Power Authority.”

Pierluisi said negotiations with the proposed operator of the legacy power plants are underway. Citing sources, the STAR reported that it was a consortium headed by New Fortress Energy called Encanto Power.

The governor said he asked Secretary of State Omar Marrero Díaz, who chairs the P3A board, to evaluate whether amendments requested by the legislative leaders as a condition for approving the public-private partnership, could be included in the contract.

House Speaker Rafael “Tatito ” Hernández Montañez and Senate President José Luis Dalmau Santiago had requested the inclusion of language in the contract that would make the contract more transparent and would protect the jobs of PREPA workers.

The Legislature nominated two members of the P3A board and they are under instructions to oppose the contract.

“It is possible that the contract provides for that. If so, then let the presidents of the bodies be informed,” Pierluisi said. “If the contract does not provide for it and it can be modified, then so be it. It must be done. It is possible that some of the approaches and suggestions do not require amending the contract.”

The governor declined to speak on the identity of the contractor citing confidentiality provisions.

He disputed claims that under the law the legacy power plants must be operated by two separate companies instead of one.

“But what the energy transformation law requires is that this entity be different from the one that operates the transmission and distribution network,” Pierluisi said. “So as long as it is another entity, that there is not a monopoly for the entire electrical system in Puerto Rico, that we have at least two entities, one for the transmission and distribution network and one for generation, the law is complied with.”

The governor did not know whether the contract contains language that would seek to avoid the same setbacks customers experienced under the contract with LUMA Energy, the private operator of PREPA’s transmission and distribution system.

“But I tend to think that they are taking all precautionary measures, so that the public-private alliance works,” he said.

In the event the contract does not move forward, the proposed debt adjustment plan for PREPA contains language suggesting that the oversight board may preempt local laws that prevent putting PREPA’s legacy power plants under private management due to legislative opposition, as reported by the STAR in December.

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