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  • Writer's pictureThe San Juan Daily Star

Judge takes request to halt Genera PR contract under advisement

U.S. District Judge Laura Taylor Swain


The judge overseeing the Puerto Rico Electric Power Authority’s (PREPA) bankruptcy proceeding took under advisement a decision on a request for an injunction filed by the Electrical Industry and Irrigation Workers Union (UTIER by its Spanish acronym) to stop Genera PR from taking control of PREPA’s thermal power plants.

U.S. District Judge Laura Taylor Swain said Wednesday she was going to issue a ruling promptly because of the urgency of the situation. Genera PR is slated to take over the operation of the power plants on July 1.

UTIER had challenged the Genera PR contract arguing that it violates public policy by creating a private monopoly in power generation. It also filed an injunction to stop it from going into effect.

The union argued that it had standing to pursue the injunction because the contract was going to result in the union’s destruction. Most of the generation workers are going to work for Genera or move to other agencies.

The Financial Oversight and Management Board argued that there was no injury to justify the injunction request. The board noted that PREPA was in a crisis, prompting laws allowing for its privatization.

New Fortress Energy subsidiary Genera PR was selected to operate, maintain and eventually decommission PREPA’s aging power-generation assets through a 10-year agreement established via a public-private partnership (P3). The 100-day transition period ends June 30.

Through the P3, Genera PR will receive $22.5 million annually over five years and could receive bonuses or incentives of up to $100 million, pending on whether consumer savings are achieved. The generation units transferred by PREPA to the company produce about 70% of the energy consumed on the island.

UTIER pointed out that Acts 120-2018 and 17-2019 stipulate that generation assets cannot be assigned or sold to a single contractor.

Act 17-2019 establishes that “no electric service company may, by itself, with subsidiaries or affiliates or jointly, control fifty percent (50%) or more capacity of a generating asset, with the exception of the Authority and only in the case of legacy generation assets.” UTIER said the contract transfers over 50% of the generation capacity to Genera PR.

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