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PREPA chief: Gov’t can’t afford to subsidize temporary rate hikes


Puerto Rico Electric Power Authority Executive Director Josué Colón Ortíz

By The Star Staff


Puerto Rico Electric Power Authority (PREPA) Executive Director Josué Colón Ortíz came out Tuesday against the idea of the government subsidizing the temporary energy rate hikes that went into effect this month.


Colón Ortiz said the government of Puerto Rico should not use funds to mitigate hikes such as the 3.67 cents per kilowatt-hour approved by the Puerto Rico Energy Bureau (PREB) last week that will be effective through March.


“Secretary of State Omar Marrero and the AAFAF [Fiscal Agency and Financial Advisory Authority] component were evaluating it, but the reality is -- and I must be very clear and honest as I have always been with you -- the government of Puerto Rico does not have the $100 million or the amount needed to cover price variations in the oil markets every three months,” he told reporters.


“There is no one who controls the prices of fuel and oil derivatives,” Colón Ortiz said following a meeting with Gov. Pedro Pierluisi Urrutia.


Colón Ortiz said it was unfair to think or pretend that the government should pay every time there is an increase in the price of a barrel of fuel and “that the government will have $100 or $200 million available to be able to address that situation.”


Last year, he said, the government was able to use federal funds to mitigate the increase, but this time there is not necessarily money available for that.


Puerto Rico can help mitigate the high costs of fossil fuels by investing in renewable energy sources, but PREPA has been moving at a snail’s pace in reducing its dependence on traditional fuel types.


Because of problems and delays in the delivery of renewable energy projects, the PREB in November stripped PREPA of its oversight authority with respect to the requests for proposals (RFPs) for Tranche 2 renewables. The PREB, the island’s energy regulator, said it will oversee the RFPs with the help of its independent coordinator.


The PREB said “the process conducted by PREPA in connection with the Tranche 1 RFP suffers from numerous shortcomings and failed to comply with important directives and milestones established in the Approved Integrated Resource Plan (IRP),” which is the island’s long-term energy needs plan.


“If the Energy Bureau takes no further action, the implementation of the renewables procurement plan, as well as the integration of renewable energy into the Puerto Rico electrical grid system to meet the applicable Renewable Portfolio Standard, will be at risk,” the regulator said. “There is an urgent need to properly implement the Approved IRP directives regarding the integration of renewables in order to reform the electrical system and meet energy public policy goals.”

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