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  • Writer's pictureThe San Juan Daily Star

PREPA board approves contract to privatize energy generation on the island

Tomás Torres, consumer representative on the Puerto Rico Electric Power Authority governing board


The Puerto Rico Electric Power Authority (PREPA) governing board in a 4-1 vote Thursday afternoon approved the contract that would put PREPA’s legacy power plants under a private operator.

PREPA board member Tomás Torres voted against the deal because, he said, it is a mere contract for operation and maintenance, a task that PREPA personnel can carry out.

“We are going to pay millions to a private firm and take away resources that can be used by PREPA to pay its debt or for capital works,” Torres said.

PREPA has been bankrupt since 2017 and is in court to restructure close to $10 billion in debt.

Details of the contract with the private operator were kept secret because the information is considered confidential until the parties sign it. Sources said the selected private operator, which has been identified as a consortium headed by a subsidiary of New Fortress Energy called NFR Energia, Peak Energy and Black & Veatch, will be paid anywhere up to $100 million.

The contract, which the Public-Private Partnerships Authority (P3A) board approved unanimously last Sunday (Jan. 15), now goes to the consideration of Gov. Pedro Pierluisi Urrutia, who has 30 days to act. The Financial Oversight and Management Board must review it also.

PREPA Governing Board Chairman Fernando Gil Enseñat revealed that the Puerto Rico Energy Bureau issued a certificate of compliance on Jan. 15. The document has yet to be made public.

Gil Enseñat said the contract will be valid for 10 years and that after the fifth year it can be reviewed. Costs of the contract are expected to go down significantly after the sixth year, once power plants are decommissioned in favor of renewable energy.

Ángel Figueroa Jaramillo, president of the Electrical Industry and Irrigation Workers Union (UTIER), said the union will wait until the contents of the contract are made public before deciding its next step.

He said the contract is very similar to the one that put LUMA Energy in charge of PREPA’s transmission and distribution system. However, he said the protections provided to the workers are only the ones guaranteed by law and not the collective bargaining agreement. Under the LUMA Energy contract, workers could work with the private operator or move to other government agencies.

Most workers moved to other government agencies to avoid losing their pensions.

“My advice to the workers is not to go to work for the private operator,” the UTIER president said.

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