PREPA opposes Quanta taking active role in green energy tenders

The Puerto Rico Electric Power Authority says allowing Quanta Services, one of the parent companies of LUMA Energy, to participate in the tenders for renewable energy projects as a contractor or supplier to project proponents, or in any other capacity, would be a conflict of interest.

By THE STAR STAFF

The Puerto Rico Electric Power Authority (PREPA) has opposed a request by Quanta Services, one of the parent companies of LUMA Energy, the private operator of the PREPA transmission and distribution (T&D) system, seeking to be removed from the list of firms banned from participating in any capacity in the tenders for renewable energy projects.

PREPA says allowing Quanta to participate in the tenders by acting as a contractor or supplier to project proponents or in any other capacity would be a conflict of interest.

“Quanta has a 50% ownership interest in LUMA Energy. Thus, in matters related to LUMA’s responsibilities pursuant to the T&D OMA, Quanta acts for all purposes as agent of PREPA,” PREPA noted in a recent motion to the Puerto Rico Energy Bureau (PREB). “In the particular case of renewable energy tranches, LUMA is responsible for compliance with the interconnection of renewables.”

Accordingly, having Quanta or its subsidiaries perform work on behalf of proponents has a substantial potential of resulting in conflicts of interest which could be detrimental to PREPA and PREPA’s relationship with LUMA, the motion said. “In the eventuality that Quanta, as contractor for a proponent, fails to perform as intended, LUMA would be in a classic conflict of interest situation of either defending one of the parties to its consortium or PREPA.

On Feb. 22, 2021, PREPA requested proposals (RFPs) for the first of six renewable energy tenders. As part of the process, PREPA issued a list of “Restricted Parties,” whereby neither the listed entities “nor their respective directors, officers, partners, employees, and persons, or legal entities related to them are eligible to participate as team members or to otherwise assist any proponent or team member, directly or indirectly in the tender.” In doing so, PREPA wanted to avoid possible conflicts of interest.

The PREB later removed PREPA from overseeing the six proposed tenders in 2021 and decided to hire an independent contractor to manage the tenders, arguing that PREPA was too slow in increasing the use of renewable energy sources. In January 2022, the PREB assigned the new responsibilities to Accion Group.

Accion Group has conducted the tenders for Tranche 2 and 3 so far. The deadline for bids on the third tranche of renewable energy tenders was Sept. 1.

Since PREPA had initially included Quanta as a restricted party in the RFP for Tranche 1, the PREB has continued to include Quanta as a restricted party in both the RFPs for Tranche 2 and Tranche 3.

On July 18 of this year, Quanta sent a letter to Accion Group seeking its removal from the “Restricted Parties” inclusion.

Quanta specifically requested that Accion Group consider revising the restrictions on “Restricted Parties” for all past and current tranches of renewable energy generation and energy storage resource projects and any future RFPs to allow Quanta and similarly restricted companies to participate as contractors, sub-contractors, suppliers and vendors in the development, design, engineering, procurement, construction, supply, installation, commissioning, testing or maintenance of the projects.

There are 24 parties restricted from participating in the tenders in any capacity including ATCO, LUMA Energy’s other parent company, and LUMA Energy itself.