PIP files measures to cancel Genera contract, investigate AES’ future
- The San Juan Daily Star
- 7 hours ago
- 5 min read
By THE STAR STAFF
Lawmakers from the Puerto Rican Independence Party (PIP) filed two measures on Thursday calling for the termination of the Genera PR contract and an investigation into the future operations of the AES coal plant, as well as government efforts to convert it to natural gas.
House Concurrent Resolution 390 proposes the immediate cancellation of the contract with legacy power plant fleet operator Genera and the initiation of an orderly transition process, citing the financial situation of Genera’s parent company New Fortress Energy (NFE). House Resolution 780 calls for an investigation into plans for AES and their compatibility with Puerto Rico’s energy policy.
“Continuing the contract with Genera poses a risk to the interests of the Puerto Rican people,” Rep. Denis Márquez Lebrón, the PIP spokesperson in the island House of Representatives, said in a written statement. “New Fortress’ bankruptcy demonstrates that it no longer possesses the financial stability required to act as guarantor for its subsidiary, which carries serious implications. The financial security of the guarantor is essential to safeguarding the public interest.”
Along with asserting that NFE’s situation prevents the company from providing the financial backing required for Genera’s contractual obligations, Márquez Lebrón also questioned the appropriateness of having a company linked to natural gas supply manage the electrical system’s generation units.
“Genera PR proposes solutions and manages the electrical generation system based on the economic interests of its parent company and guarantor,” he said. “It was also the entity that proposed acquiring temporary generation capacity using fossil fuels, primarily natural gas. This insistence on maintaining and expanding reliance on fossil fuels is particularly concerning regarding AES, which poses environmental and public health threats to local communities. While it is claimed that AES will soon be converted to natural gas, the company is simultaneously seeking federal funds to modernize and extend the operation of its coal-fired generation facility.”
The proposed investigation is to examine AES’ current and future operations, government efforts regarding a potential conversion to natural gas, and requests for federal funding to modernize the coal-fired plant.
PIP Deputy Senate Leader Adrián González Costa noted that the inquiry must also determine who would bear the approximately $655.4 million in project costs not covered by potential contributions from the U.S. Department of Energy.
The resolution seeks to establish whether any portion of that amount would fall -- directly or indirectly -- on the Puerto Rico Electric Power Authority (PREPA), the electrical grid, or its customers.
“The country has witnessed and fallen victim to a series of unfortunate events since the two-party system destroyed our electrical grid, only to later justify handing it over to the private sector,” González Costa said. “We have seen worse service, more frequent and longer-lasting blackouts, and ever-rising electricity rates.”
On Aug. 15, Márquez Lebrón and PIP Deputy House Leader Adriana Gutiérrez Colón asked Rep. Víctor Parés Otero, chair of the Government Committee, to hold public hearings regarding contracts involving energy infrastructure firm Power Expectations and other companies.
In their letter, the lawmakers argued that controversies surrounding Power Expectations reveal potential flaws in the evaluation, authorization and contracting processes of the Public-Private Partnerships Authority, the Puerto Rico Energy Bureau and PREPA.
The PIP delegations also reiterated their support for House Bill 797, which proposes returning control of the electrical grid to a public entity featuring citizen participation and governance reforms.
The statement did not include reactions from Genera, NFE, AES or the government regarding those measures.
AAFAF says it is monitoring impact of NFE’s restructuring
The Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF) said meanwhile on Thursday that the island government continues to closely monitor the corporate restructuring of NFE and any potential impact on fuel supply and power generation on the island.
Vicky González Vega, AAFAF’s interim executive director, said in a statement that the administration has followed the process “from its earliest stages,” emphasizing that the government’s priority is safeguarding the continuity and reliability of Puerto Rico’s energy service. She noted that available information points to an orderly restructuring supported by creditors and backed by judicial approvals in both the United Kingdom and the United States.
According to NFE’s quarterly report filed on March 17, 2026, the company entered into a restructuring support agreement that would reduce its corporate debt from roughly $5.7 billion to about $527 million, a decrease of some 91%. The plan received near-unanimous creditor support, was sanctioned by the High Court of Justice of England and Wales, and later recognized by the U.S. Bankruptcy Court for the Southern District of New York. The restructuring is expected to conclude during the third quarter of 2026.
The government is monitoring the process to ensure it does not disrupt fuel supply or interfere with the operational obligations of Genera. AAFAF said current information suggests operational continuity while the restructuring is finalized.
The STAR first reported in March that the restructuring could affect the operations of Genera. The restructuring divided the company’s operations.
González Vega acknowledged public concerns and stressed that any contractual issues must be evaluated “with seriousness and independence,” based on facts, agreements, and applicable law. She added that a corporate restructuring process “does not, by itself, imply a conclusion about the company’s ability to meet its obligations.”
The official said the government will continue coordinating with relevant regulatory entities to ensure that any determinations protect the stability of the electrical system, continuity of service and the public interest.
On Wednesday, in a demand echoing part of the PIP legislative action to follow, the “Queremos Sol” (We Want Sun) coalition called on PREPA and Energy Czar Josué Colón Ortiz to evaluate the immediate termination of contracts with NFEnergía and Genera, citing the restructuring proceedings and financial situation of NFE.
The demand was formalized through letters in which the coalition asked for a review of the agreements to determine whether insolvency, debt defaults and restructuring processes constitute grounds for termination or allow for the exercise of other contractual remedies.
“Puerto Rico cannot wait for a financial crisis to turn into yet another energy crisis before acting,” stated Laura Arroyo, an attorney with Earthjustice and a member of Queremos Sol. “New Fortress Energy’s situation compels the government to do now what any responsible administrator would do: review the contracts, determine our rights, and protect the public interest before it is too late.”
Comments