Lawyer warns of load shedding amid possible invalidity of temporary power generation contract

Attorney Rolando Emmanuelli

By THE STAR STAFF

Attorney Rolando Emmanuelli, an expert on the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA, warned Tuesday that the temporary generation contract awarded to Power Expectations could be legally void due to the alleged falsification of energy supplier Enchanted Rock’s signature, an irregularity he says may carry serious consequences for Puerto Rico’s already strained electrical system.

Speaking in a radio interview (Radio Isla), Emmanuelli said the contract lacks the signature of a party the Financial Oversight and Management Board had deemed essential for approval.

“The contract is null because it does not have the signature of an essential party,” he said, adding that the absence of the 400 megawatts (MW) of temporary generation contemplated in the agreement could worsen the island’s vulnerability to load shedding. “Those 400 megawatts will be needed. When you look at the daily reserves of Puerto Rico’s generation system, we are always thin, and any outage causes the famous ‘relevos de carga’ [load shedding].”

He also suggested that economic pressures may have influenced the alleged unauthorized signature.

“Whoever falsified the signature committed fraud,” Emmanuelli said. “Imagine the complexity of a $5 billion business. There are many interests here that could lead to a criminal act.”

The oversight board raised the alarm on Aug. 7, when its executive director, Robert F. Mujica Jr., informed the Third‑Party Procurement Office (3PPO) that Enchanted Rock, now ERock, had told the board its name and signature were used “without our authorization” in the procurement. The board called the allegation “extremely troubling” and said it is considering revoking its approval of the contract and referring the matter to authorities.

The oversight board’s letter also highlighted the project’s lack of progress. Fifty‑seven days after execution, the Puerto Rico Electric Power Authority (PREPA) reported no installation work, no completed milestones, and no delivery of the required $1.18 billion performance bond. PREPA confirmed that Enchanted Rock was replaced by Flotek Industries, a Texas‑based public company, shortly after the contract was signed.

The board noted that Enchanted Rock’s participation was a critical factor in determining that the seller consortium, Power Expectations and Reyes Contractor, had the technical and financial capacity to deliver the 400 MW project. Without ERock, the remaining entities lacked utility‑scale experience and sufficient financial strength.

3PPO President Osvaldo Carlo has publicly defended the procurement process, saying Power Expectations had a valid representation agreement allowing it to sign on Enchanted Rock’s behalf. In a social media post, he said PREPA received a corporate resolution identifying the authorized signatory and that the contract was executed through DocuSign.

Carlo described the dispute as a legal disagreement between corporate partners that escalated after Houston-based Enchanted Rock reorganized under a new parent entity, “E Rock.” He said the matter became moot after Power Expectations invoked an assignment clause and substituted Enchanted Rock with Flotek Industries, which PREPA vetted and approved.

He also emphasized that Puerto Rico’s emergency‑generation deficit forced the Puerto Rico Energy Bureau, island’s sector regulator, to issue a solicitation with unusual terms -- no minimum‑use guarantees and payment only for energy consumed -- conditions that narrowed the market to three bidders and left Power Expectations as the only compliant proponent.

Energy Czar Josué Colón Ortiz said Sunday that the government has been addressing the contract’s irregularities since mid‑June, weeks before the oversight board’s letter. He rejected entering into a public dispute with the board, saying the administration is handling the matter “rigorously, confidentially, and not through the media.”

Colón this week confirmed that PREPA has been working with 3PPO and Carlo to evaluate representations made by Power Expectations, “in some cases under oath.” He said the government has not found evidence of wrongdoing beyond a possible dispute between corporate partners, but investigations remain ongoing.

“We are doing everything required by law to ensure the contracting process was conducted correctly,” Colón said, adding that the government will formally respond to the oversight board’s comments.