Oversight pushes back against 3PPO, defends authority over temporary generation contract

Robert Mujica Jr., executive director of the Financial Oversight and Management Board for Puerto Rico.

By THE STAR STAFF

The Financial Oversight and Management Board for Puerto Rico (FOMB) has forcefully rejected allegations by the Third‑Party Procurement Office (3PPO) that it has exceeded its statutory authority in reviewing a proposed temporary power generation contract awarded to Power Expectations, LLC. 

In a letter dated February 13, 2026, the Board argued that its recent requests for information are fully consistent with PROMESA and necessary to safeguard Puerto Rico from fiscal and operational risk.

The exchange follows a January 28 letter from 3PPO President Osvaldo Carlo Linares, who accused the Board of escalating its involvement in the Temporary Power Generation 2 (TPG2) procurement far beyond what PROMESA allows. Carlo Linares asserted that the procurement had already gone through a compliant competitive process, had been evaluated under federal procurement standards, and had received appropriate review from the Puerto Rico Energy Bureau (PREB).

The Oversight Board, however, rejected those claims unequivocally. The Board’s letter emphasizes that PROMESA explicitly grants it broad authority to obtain documentation necessary to perform its responsibilities. It pointed to Section 104(c)(2), which empowers the Board to secure any information needed to enforce the law’s mandates, and Section 204(b)(2), which obligates the Board to ensure that proposed government contracts promote market competition and do not conflict with the certified Fiscal Plan.

In that context, the Board said its January 21 Request for Information (RFI) to PREPA was a textbook example of a lawful action. The 3PPO’s position that the request was improper, the Board argued, is “inconsistent with PROMESA’s plain language and purpose.” The letter further stressed that its RFIs do not constitute operational interference or an attempt to second‑guess technical evaluations. Instead, they are part of a standard contract‑review procedure that the 3PPO has acknowledged in the past. The Board pointed out that 3PPO recently responded to similar requests during the review of the Gas Sale Agreement involving PREPA, the Public‑Private Partnerships Authority (P3A), and NF Energía, LLC.

The Oversight Board said concerns already raised by documents provided by the 3PPO justify its continued scrutiny of the temporary power generation contract. According to the letter, Power Expectations, LLC appears to have limited financial capacity and minimal experience handling the type of large‑scale energy projects contemplated under the contract. The Board also pointed to background issues involving the company’s principal—issues that the 3PPO itself admitted were not disclosed during the procurement process.

Adding to those concerns was a communication from the P3A in which the agency acknowledged that it did not conduct any due diligence or background checks on the parties involved in the RFP. The Board said this acknowledgment, combined with the other red flags, underscores the need for a deeper and more transparent review of the procurement and vendor selection process.

The Board also raised unresolved questions regarding the potential use of federal funding for the interconnection work associated with the temporary generation project. If federal funds are to be used, the Board stressed, it must determine whether any requests for such funds have been submitted or approved and whether the procurement meets the requirements of 2 CFR 200, which governs federal procurement standards. The Board noted that PREB itself explicitly stated in a December 2025 order that its authority over the contract is “strictly limited” to verifying compliance with the regulatory framework governing public utilities, not evaluating competition, fiscal impacts, or vendor qualifications. Those areas, the Board argued, fall squarely under PROMESA and therefore under the Board’s jurisdiction.

The Board cited mainland and local media reporting—including a Florida article labeling the contract as “Whitefish 2.0”—as further justification for its oversight, although it emphasized it was not adopting that characterization. The comparison stems from the controversial 2017 Whitefish Energy contract, which drew national scrutiny after Hurricane María. The Board also noted that in a background report submitted by the 3PPO, the office itself recognized that Power Expectations had been widely compared to Whitefish due to its small size and political connections. While the Board made no factual findings about those allegations, it said such reporting underscores the importance of transparency and careful documentation.

The 3PPO’s letter also alleged a potential conflict of interest involving an FOMB official who has a family relationship with a partner at McConnell Valdés, the law firm representing a proponent that competed unsuccessfully for the TPG2 contract. The Board dismissed the allegation, asserting that internal ethics policies, disclosures, and oversight by an Independent Ethics Advisor ensure compliance and prevent conflicts.

The Board concluded its letter by signaling that additional RFIs may follow and that it reserves the right to block the execution or enforcement of the contract if it determines that the procurement or contract terms violate PROMESA or the certified Fiscal Plan. “We hope such actions will not be necessary,” the letter said, while making clear that the option remains on the table.

The 3PPO, for its part, continues to insist that further delays are unacceptable and that the TPG2 contract is critical to stabilizing Puerto Rico’s fragile electric system. Carlo Linares argues that because no fiscal plan inconsistency has been identified, the Board should step back and allow execution to proceed.

The clash now represents one of the most consequential confrontations over energy governance since Puerto Rico’s post‑Hurricane María reconstruction began. At stake is not only the future of the TPG2 project but also the broader question of how emergency procurement powers interact with federal fiscal oversight under PROMESA—an unresolved tension that may define the next phase of energy contracting on the island.