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  • Writer's pictureThe San Juan Daily Star

PREB orders PREPA to close delayed Tranche 1 PPOAs for green energy

The Puerto Rico Energy Bureau rejected the power authority’s claims that the private operator of its transmission and distribution system, LUMA Energy, should be blamed for the delays.

By The Star Staff

Puerto Rico’s Energy Bureau (PREB) ordered the Puerto Rico Electric Power Authority (PREPA) on Thursday to immediately close Tranche 1 renewable power purchase operating agreements with some 18 developers.

The PREB rejected the power utility’s claims that the private operator of its transmission and distribution (T&D) system, LUMA Energy, should be blamed for the delays.

“As the entity in charge of Tranche 1, PREPA representatives could and should have undoubtedly identified long ago any issues potentially jeopardizing the closing of the Tranche 1 PPOAs [power purchase operating agreements] and by this time found appropriate solutions to the alleged issues,” the PREB said in its ruling. “Unfortunately, the record does not reflect any willingness to concretize the agreements.”

The PREB’s ruling came after PREPA requested on March 31 an extension for the closing of all Tranche 1 RFP contracts until September. In the petition, PREPA noted that LUMA has changed its mind four times regarding the interconnection works and has decided to take the work upon itself even though the PPOAs put that job on the developers. PREPA also cited numerous amendments requested by the service providers and that some of the service providers had requested increases in service prices to accommodate inflation and high interest rates.

The PREB, however, rejected PREPA’s request for an extension and urged the closing of PPOAs whose projects do not have identified issues, and ordered PREPA to negotiate with project developers any amendments to the PPOAs and resubmit the amendments for PREB approval before closing the PPOA.

In February 2021, PREPA launched the first of six tranches for renewable energy projects. The bid procured 1,000 megawatts (MW) of renewable energy and 500 MW of battery storage. The PREB already granted an extension that is slated to expire this month.

Francisco Santos, PREPA’s senior adviser on renewable energy matters, recently said at a PREPA board meeting that the signing of the Tranche 1 contracts, totaling 23, was behind because of LUMA’s delays in providing project proponents with the interconnection costs. In reality, LUMA provided the costs in September but has yet to perform the construction work for the interconnections, according to PREB documents. The private operator of the T&D system issued a request for proposals for the work in March but it may not be ready until July.

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