Green power firm sues PREPA to force energy purchase

By The Star Staff

PV Properties Inc., an electric power firm that is part of the renewable energy operation Windmar Group, has sued the Puerto Rico Electric Power Authority (PREPA) seeking a court declaration that pursuant to Act 17-2019, PREPA is obligated to acquire energy from PV Properties and pay for it as an administrative expense, which means it would have priority over other debt.

PV Properties filed the suit Tuesday as an adversary complaint within the bankruptcy-like process under the federal Puerto Rico Oversight, Management and Economic Stability Act, commonly known by its acronym, PROMESA. Besides PV Properties, the Windmar Group also comprises Windmar Renewable Energy Inc., Coto Laurel Solar Farm Inc. and Windmar PV Energy Inc., all of which have designed and constructed over 40 megawatts of solar energy sources throughout Puerto Rico, including Vieques and Culebra.

The power produced by PV Properties’ solar panels that is distributed by PREPA generates 24,000 renewable energy certificates (RECs) per year, which are recorded and serialized in the North American Renewable Registry with a value of over $840,000 on the basis of $35 for each REC.

The suit says that while PREPA has to increase its renewable energy production, utility officials recently told the Puerto Rico Energy Bureau (PREB) that the production of energy from petroleum not only has not been reduced, but has dramatically increased from 55.05 percent in 2015 to 61.77 percent in 2016. As revealed by PREPA, “the progress of the generation of electricity by renewable sources is miniscule and insubstantial, consisting of 0.14 percent in 2015 and 2 percent in 2016,” the adversary proceeding said.

“Without any explanation, PREPA has opted not to acquire the RECs made available by PV Properties, which will assist PREPA in complying with Act Number 82-2010 as to its obligation regarding its renewable energy portfolio,” the suit says.

Act 82 of 2010 is the Puerto Rico Energy Diversification Policy Through Sustainable and Alternative Renewable Energy Act, which requires energy providers to have a percentage of their energy come from renewables.

On March 3, 2017, PV Properties filed an administrative complaint with the PREB for an order directed to PREPA for it to acquire PV Properties’ RECs as PREPA is bound to do under Act 82. In the administrative proceeding before PREB, PV Properties sought a determination that PREPA was violating Act 82 by failing to purchase the RECs offered by the firm. PV Properties also sought an order directing PREPA to purchase the RECs offered at the price specified thereby.

On July 12, 2017, PREPA filed a notice with the PREB stating that the administrative proceeding was subject to the automatic bankruptcy stay, but PREB said it fell within its regulatory powers. PV Properties subsequently asked the court for a relief from the stay, which the court denied.

While denying relief from stay, the court recognized that “it is clear, that under these circumstances, the instant case involves a controversy related to PREPA’s alleged noncompliance with energy public policy.” On May 31, 2019 PV Properties filed a renewed motion for relief from the stay in court, but it was also denied.

Nonetheless, PV Properties said that under Act 17-2019, the Puerto Rico Energy Policy law, the issue of the applicability of the “RECs to be distributed to PV Properties as to net metered individual consumer and acquired by PREPA” has been categorically established, which goes against PREPA’s position of not acquiring PV Properties’ RECs applicable to distributed net metered consumers.

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