Lawsuit challenges natural gas monopoly in Puerto Rico

At the center of the dispute is the exclusive contract awarded to New Fortress Energy for the operation of Piers A and B at the Port of San Juan.

By The Star Staff

Former Puerto Rico Electric Power Authority board head Luis Aníbal Avilés Pagán has filed a mandamus petition in the Court of First Instance in San Juan to compel the government to halt the consolidation of a monopoly over natural gas in the U.S. territory.

On Thursday, Aviles Pagan told the STAR the case is before Judge Anthony Cuevas.

The lawsuit targets several agencies, including the Ports Authority, the Electric Power Authority, the Energy Bureau, the Authority for Public-Private Partnerships, the AAFAF, and the Department of Justice, which Aviles Pagan expected to subpoena this week. At the center of the dispute is the exclusive contract awarded to New Fortress Energy (NFE) for the operation of Piers A and B at the Port of San Juan. The lawsuit contends that the natural gas supply contracts were signed without effective competition or adequate regulatory review.

“This appeal requests something fundamental: strict compliance with the laws of Puerto Rico. It seeks to prevent the establishment of a vertically integrated private monopoly over natural gas, which would violate the current legal framework. The complacency of these agencies cannot be allowed to transform essential infrastructure into an asset controlled by a single entity,” stated Luis Aníbal Avilés.

Among the agencies mentioned, the inaction of the Ports Authority stands out. The authority granted and has maintained an exclusive use contract for the pier without activating clauses that would allow it to suspend operations in cases of regulatory noncompliance. The NFE regasification plant operated for years without the necessary federal authorization, yet the Ports Authority did not utilize its authority to impose sanctions or ensure open access to other suppliers.

The lawsuit also addresses concerns raised by the Fiscal Oversight Board, which recently warned that the proposed contracts with NFE could jeopardize the island’s energy security and lead to a monopolistic structure that goes against the public interest.

Governor Jenniffer González Colón asserted on July 18 that “Puerto Rico finds itself in a situation of near defenselessness” against the conditions imposed by the contracting company. “Although it has claimed that this is an inherited contract, the truth is that under the Constitution of the Commonwealth and applicable laws, the executive branch has a duty to ensure the legality of current administrative actions and has the authority to intervene, oversee, and correct contracts entered into in violation of the legal system,” Avilés remarked.

The lawsuit emphasizes that NFE’s unilateral suspension of gas supplies has compelled the Puerto Rico Electric Power Authority to rely on diesel, resulting in a significantly higher cost and generating monthly overruns between $14 and $21 million. This has a direct impact on the electricity rates paid by consumers.

“Every day that these agencies fail to act, the damage to the public interest increases. This lawsuit is a call to restore legality in the management of the country’s energy infrastructure,” Avilés concluded.