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  • Writer's pictureThe San Juan Daily Star

PREPA customers can expect to see lower energy bills at least through July

Puerto Rico Electric Power Authority Executive Director Josué Colón Ortiz

By The Star Staff

Besides the 20% energy rate reduction ordered by the Puerto Rico Energy Bureau (PREB) for June, Puerto Rico Electric Power Authority (PREPA) consumers should experience in July a 1 cent per kilowatt-hour (kWh) cut in their utility rates for a different reason.

Certain costs associated with the liquified natural gas contract PREPA has with New Fortress Energy will go down to 6.50% from 7.50%, which will result in a lower energy rate for July and possibly August, according to information that came out during a recent PREPA board meeting.

At the meeting, PREPA board member Tomás Torres Placa asked about the reduction that is expected to go into effect in June resulting from some “adders” in the contract. It was revealed then that the cut was slated to go into effect by virtue of the contract in June.

The reduction, which will result in a cut in the cost of energy, is separate and different from the 20.8% drop in the energy bills consumers should see during June after the PREB confirmed a series of excess collections reported by LUMA Energy, the consortium in charge of PREPA’s transmission and distribution system, for March and April.

The cost per kWh for residential customers will be reduced to 20.90 cents from 26.39 cents. Therefore, a subscriber with a monthly consumption of 400 kWh would receive a bill of $83.60 in June, instead of $105.56.

Meanwhile, PREPA said it has completed modifications and closed nine of the renewable energy contracts comprising 555 megawatts (MW) from the Tranche 1 tender.

Launched in February 2021, the Tranche 1 tender sought to award contracts for 1,000 MW of renewable energy capacity and 500 MW of battery storage. PREPA had trouble closing all contracts because the service providers sought amendments to contract terms to adjust for inflation and pricing changes. PREPA officials also blamed LUMA Energy for the delay as it failed to provide information on interconnection costs.

The PREB on April 4 ordered PREPA to close all of the energy power purchase agreements and five battery storage contracts within the 60-day extension period it had granted.

PREPA Executive Director Josué Colón Ortiz said the projects were presented to the PREB. The projects must also obtain the approval of the Financial Oversight and Management Board.

Colón Ortiz said there are four other contracts out of the initial 23 contracts in the Tranche 1 tender that should be closed in June. Those contracts for renewable projects should provide 404.5 MW of energy to Puerto Rico.

“With this we will have a grand total of 959.5 MW of energy in Tranche 1,” he said.

Regarding the battery energy storage contracts obtained in Tranche 1, Colón Ortiz said the utility closed a total of 150 MW of battery storage through three contracts in addition to the 360 MW in battery storage contracts that the utility has for a total of 510 MW in battery energy storage.

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