PREPA board to vote on power generation PPP contract today
Exclusive: P3A boss says operator would not be expected to invest own money in plants
Public-Private Partnerships Authority Executive Director Fermín Fontanés Gómez
By THE STAR STAFF
The Puerto Rico Electric Power Authority (PREPA) governing board is slated to vote in a partially closed meeting this afternoon on the public-private partnership (PPP) contract that would put PREPA’s legacy power plants under a private operator.
The vote will take place at 1 p.m. While PREPA’s board has said the proceeding will be aired through the utility’s internet portal, the board will shut down the feed when it discusses the specifics on the contract because the contract is considered confidential until the parties sign it, the STAR learned. PREPA’s board members have the contract already, but at the meeting they are expected to discuss it with Public-Private Partnerships Authority (P3A) officials and, if possible, make amendments to the document.
P3A Executive Director Fermín Fontanés Gómez is expected to be at the board meeting.
One of the board members, Tomás Torres Placa, is expected to vote against the contract as he has already said publicly that now is not the appropriate time to privatize generation, when the supply chain has been hindered by the Russian-Ukraine conflict.
Fontanés commented to the STAR on some aspects of the contract.
Asked about the qualifications of the private operator, who STAR sources said is a consortium composed of New Fortress Energy, Peak Energy and Black & Veatch, Fontanés said the PPP committee evaluated all of the 15 proponents of the proposed PPP, evaluating the costs and finances of the different economic proposals.
What would happen with the old power plants that are slated to be decommissioned? Fontanés said the private operator must comply with the Integrated Resource Plan (IRP), the blueprint of Puerto Rico’s energy needs, which calls for certain power plants to be eliminated as the island must draw its power from renewable energy sources by 2050.
The LUMA Energy contract was criticized because the company was not investing from its own pockets into the transmission and distribution system as everything was being paid for with public funds.
The private operator of the island’s legacy generation assets is not expected to invest in the power plants either, as the investments and repairs will be paid for with federal funds.
“The private operator has the flexibility of making the investment from its own pockets if the [Puerto Rico] Energy Bureau agrees to it because we do not want energy rates to go up,” Fontanés said. “But it is under no obligation. Any investments are paid for through the energy rates.”
While the energy policy law states that there must be more than one company operating the generation sector, Fontanés said that because PREPA is the owner of the power plants, the provision does not apply.
The P3A chief also said that under the contract, none of the PREPA employees will be left jobless. The workers will have the option of transferring for work with the private operator.
On Sunday, the P3A announced that its board of directors unanimously approved the proposed PPP that would put Puerto Rico’s legacy power plants under private management.