Governor warns LNG supplier’s parent firm against using ‘hostile’ tactics
- The San Juan Daily Star
- 1 day ago
- 4 min read
New Fortress Energy suspended fuel deliveries, citing $12 million owed by PREPA
By The Star Staff
Gov. Jenniffer González Colón issued a warning to New Fortress Energy (NFE) on Monday, stating that she will “enforce the current contract” and alleging that the company whose subsidiary supplies liquefied natural gas (LNG) for certain power plants in Puerto Rico is “violating the energy supply contract.”
As previously reported by the Star, in a letter addressed to Energy Czar Josué Colón Ortiz, NFE CEO Wes Edens stated that the Puerto Rico Electric Power Authority (PREPA) currently owes the company over $9 million in unpaid invoices, along with $3 million in interest on those invoices. Consequently, NFE instructed the vessel responsible for supplying gas to the Palo Seco and Puerto Nuevo power plants to depart from the island. The decision came after a week during which NFE’s contracts in Puerto Rico, which are vital for the firm’s financial stability, faced significant threats.
The Financial Oversight and Management Board recently rejected a new LNG supply contract between Genera PR and NF Energía, two NFE subsidiaries. Robert Mujica, the executive director of the oversight board, said the fiscal entity lacked sufficient time to assess the proposed $20 billion, 15-year contract. Following an initial review, the board identified inconsistencies in the request for proposals and a notable lack of market competition, suggesting that NFE effectively holds a monopoly in the sector. However, the board did agree to a temporary extension of the current contract to ensure the continuity of services.
The governor said NFE’s decision to suspend the supply of natural gas to Units 5 and 6 in San Juan is a tactic to pressure for the negotiation of the halted $20 billion contract.
“I have to say that they want to hold Puerto Rico hostage in terms of energy supply,” González Colón said during a press conference. “We are conducting all necessary analyses because this situation deprives the people of Puerto Rico of critical infrastructure, such as electricity -- in this case, natural gas -- while they attempt to use it as leverage for negotiating another contract. They are trying to coerce the government by withholding the supply, which they are contracted to provide.”
“That’s why my team is exploring alternatives to resolve this issue,” the governor added. “If they continue to refuse to supply natural gas unless their terms are met, I have to tell them that this isn’t how we operate in the Puerto Rican government. We will not negotiate with companies that use ‘bargaining’ tactics. This is not how things are done.”
González Colón remarked that NFE has adopted a “hostile attitude that is not in good faith,” which she described as “an attempt at extortion.”
“I must emphasize that if the fuel supply situation is not resolved within the next 24 hours, I will pursue all available remedies to enforce the current contract,” the governor said. “They are indeed violating the energy supply agreement. If they think that this hostile and insincere stance will deprive the government and people of Puerto Rico of electricity during peak generation months, it appears to me to be an attempt at extortion. It seems as if they are trying to negotiate by effectively holding a gun to the government of Puerto Rico’s head, and we will not permit ourselves to be blackmailed by this company. We will take all necessary legal actions to ensure compliance with the current contract, which is set to expire in August 2026 for Terminals 5 and 6, to which they are failing to supply energy.”
González Colón also highlighted that the island government recognizes that Genera PR is responsible for its parent company’s decisions.
“They have been informed of the breach of contract because they are responsible for managing the generating plants,” she said. “Therefore, as the contractor supplying the gas, they must ensure the gas supply is upheld. They are also obligated to enforce the existing contract.”
Regarding the allegation of a $12 million debt outstanding since 2020, the governor insisted that NFE had never made any efforts to secure payment.
“Now they claim there’s a debt from 2020. I inherited a 2018 contract that provides them with that dock,” she said. “Obviously, the [oversight] board is now reviewing that, thank God, and we’re doing our own reviews as well. But now, because we’re in the process of renegotiating another contract, five years later, when they’d never made any collection efforts, they claim the government of Puerto Rico owes them $12 million.”
“... The information we have is that, if there was such a debt -- if there was one -- the Puerto Rico Electric Power Authority’s own lawyers in 2020 refused and didn’t acknowledge that invoice,” . So that was before my arrival. The government of Puerto Rico at that time, through the Puerto Rico Electric Power Authority, didn’t acknowledge that invoice,” González Colón said. “But, if that debt still existed, the contract doesn’t allow them to hold up the delivery of natural gas. There’s an established procedure to resolve that dispute, that has not been followed.”