PREB delays approval of contract for temporary power generation

Energy Czar Josué Colón Ortiz

By The Star Staff

The Puerto Rico Energy Bureau (PREB) has made the approval of the contract with Power Expectations, the firm hired to provide some 800 megawatts of temporary energy to stabilize the power grid, contingent upon certain conditions.

In early June, Energy Czar Josué Colón Ortiz announced that Power Expectations had been chosen for the task. Although another company, Javelin Global Commodities, was also considered for the contract, the government decided not to proceed with it after it refused to keep energy costs below 25 cents per kilowatt-hour.

On June 20, the Puerto Rico Electric Power Authority (PREPA) submitted a motion to the PREB requesting urgent approval for the necessary temporary emergency generation. In response, the PREB stated that it needed certain clarifications before issuing a ruling.

The PREB then ordered PREPA to submit written explanations by July 1, detailing why the draft contract proposes an initial term of two years, with the possibility of extending it for two additional one-year periods, in contrast to the original 18-month timeframe proposed by Genera PR, the private operator of PREPA’s legacy power-generation fleet.

While the PREB may choose to limit any approval to 18 months or accept other contract lengths, it requires comparative data, especially if pricing varies. The PREB noted in its evaluation that the submitted information indicated a base price for years 1 and 2, followed by a decrease in years 3 and 4.

“Please indicate if the Public-Private Partnership Authority or other bidders considered extending the timeframe,” the PREB requested. “If so, submit any revised pricing proposals for the record.”

Additionally, the PREB asked PREPA to provide information and proposals from all qualified bidders during the negotiation process.