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  • Writer's pictureThe San Juan Daily Star

Protesters demand end to AES contract, urge denial of requested amendments

AES Puerto Rico’s coal-fired plant in Guayama provides a significant portion of the island’s electric power.

By The Star Staff

Protesters from various environmental groups and other citizens attended a Puerto Rico Energy Bureau (PREB) public hearing Monday to reject proposed amendments to the power purchase operating agreement (PPOA) of AES Puerto Rico, which they say will lead to higher rates, and to demand the company’s exit from the island.

Myrna Conti, an environmental activist, complained that the PREB held a hasty hearing without giving the public enough time to conduct an analysis. She said she was outraged by the fact that the proposed amendments were partially redacted and criticized the possible use of public funds to try to save the financially ailing company.

“I am concerned that the Puerto Rico Electric Power Authority [PREPA] is seeking approval of these amendments by December 1,” she said, adding that the contract with AES PR should be canceled because the company has only contributed to pollution.

AES PR has a coal-fired plant in Guayama that provides a significant portion of the island’s energy. The amendments to the 1994 power and operating agreement, which are contained in 23 pages, were discussed with AES lawyers at a meeting last week.

The amendments seek to replace the existing coal-fired facility in Guayama with a renewable energy facility because AES PR must stop using coal after Jan. 1, 2028 under a new energy policy.

AES also defaulted in the payment of its bonds per a 2000 trust agreement with the Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority (AFICA by its Spanish acronym), the Bankers Trust Company, which was the bond trustee.

The goal of the PPOA is to maintain the “economic stability and environmental compliance” of the facility pending its retirement and expedite the removal of combustion waste byproducts and accelerate Puerto Rico’s transition to renewables.

However, parts of the proposed amendments were redacted, and protesters expressed concern that the amendments will lead to higher utility rates. According to the amendments, the certified fiscal plan contains baseline rate projections for PREPA. The baseline rate projections may be impacted by, among other things, PREPA’s ability to identify sources of funding to satisfy its cost share funding obligations and AES PR’s liquidity challenges.

“If PREPA cannot identify sources of funding to satisfy its cost share funding obligations relating to the cost of the Federal Emergency Management Agency’s federal funding programs, PREPA may have to raise its rates to satisfy its obligations,” the partially redacted document said. “Pursuant to a power purchase and operating agreement with AES Puerto Rico, PREPA receives a portion of its energy supply from AES Puerto Rico’s coal generation facility. AES Puerto Rico is currently experiencing liquidity challenges. If AES Puerto Rico is not able to cover its operating expenses, PREPA may have to accept amendments to this PPOA to ensure the continued production of energy from the AES coal facility, which is necessary for PREPA to meet all demands for power, and might need to raise rates to cover costs related to any such amendment.”

Eva Prados, a lawyer and member of a committee that is seeking an audit of Puerto Rico’s debt, criticized the fact that the amendments were partially redacted and chided the PREB for not ensuring Puerto Rico had energy rates at a reasonable cost.

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Deborah Marchant
Deborah Marchant

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