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A Clean Prepa in ‘Build Back Better’ Yet to Commence

By on October 2, 2018

Editor’s note: The following report originally appeared in the Sept. 27, 2018, issue of Caribbean Business.

The start of the “Build Back Better” phase at the Puerto Rico Electric Power Authority (Prepa) may take place on the island-municipalities of Vieques and Culebra with the construction of a microgrid and overhaul of the entire power infrastructure with metal or concrete poles that would be able to withstand 150-mile-per-hour winds.

“It is the start of the Build Back Better…. It is a snapshot of what we want to do in Puerto Rico,” said José Sepúlveda, director of Prepa’s transmission & distribution system. The idea is for the two islands [municipalities] to be independent from the [big island of Puerto Rico’s] power grid. What will happen with an undersea-power cable that would connect Vieques and Culebra to a power substation in Naguabo? Sepúlveda said that while Prepa initially was not interested in repairing this cable, there are now plans to make it operational.

The process of “Building Back Better” also entails burying lines to critical infrastructure, such as hospitals, and in the case of Vieques and Culebra, gas stations.

While Sepúlveda said Prepa has already begun the build back better phase, he also acknowledged it will take several months for reconstruction to begin because officials still must submit projects for consideration by federal officials.

A preliminary integrated resource plan (IRP) obtained by Caribbean Business shows that Prepa is planning to build microgrids to overhaul the system, so the energy is distributed closer to customers. Right now, all energy is produced in the south and brought to the north through a network of powerlines that cross the island, which are often difficult to reach.

Chaos in real time

Sepúlveda said one of Prepa’s most important projects is the so-called automation that will allow workers to monitor and control any mishaps from a powerplant in real time.

“We have very skilled workers, but we need to focus on decreasing the response time for repairs,” he said.

Reducing the amount of time experiencing power interruptions or to fix damaged lines is crucial to the industrial sector because a power outage often means loss of production. There already is information to the effect that Bristol-Myers, Dupont and Baxter want to build their own microgrids and to be independent from Prepa, which could cost Prepa money.

“Like any business, we want to be able to sell energy. And we are concerned if we are unable to provide energy because then our clients will leave,” noted Fernando Padilla, Prepa’s project management officer. “We are planning to harden that entire corridor from Humacao to Caguas, which has pharmaceutical companies,” he said.

While two reports have estimated the price tag for Build Back Better at $18 billion, the potential costs associated with the transformation of Puerto Rico’s energy sector will vary greatly depending on choices made between the many technical, financial and policy options and trade-offs.

Because the cost to transform the energy sector depends on decisions yet to be made, the total amount that must be spent is uncertain and could differ by millions to billions of dollars depending on these choices.

Sepúlveda could not provide specifics about how much money Prepa will get and how much it has already spent. Prepa is at a stage where it is presenting projects for the Federal Emergency Management Agency’s (FEMA) Section 428 or the hardening phase.

“We are basically ending the emergency phase. We presented FEMA about $500 million in projects the authority believes are still for the emergency phase and will present projects for the reconstruction phase, but I don’t have the amount,” Sepúlveda said, adding that information is still being compiled.

The $500 million is needed to repair downed powerlines that were not powered because they were not urgently needed to provide electricity to the people. However, the lines are needed to stabilize the system and prevent outages. “FEMA told us to identify them, so we could act on them first, before reconstruction,” he said.

He said Prepa is entering the Build Back Better phase, but it will take months before the rebuilding starts because officials need to provide designs for what they want to do first.

Before embarking on rebuilding, Prepa is also changing its construction standards. Toward this goal, Prepa announced that grid reconstruction would utilize U.S. Department of Agriculture (USDA) Rural Development Utility Service standards. It plans to buy posts that are able to resist winds of up to 150 miles per hour, “which means they will be made of metal and will be [anchored in] a concrete base.”

Prepa will also be using concrete poles but may have to keep wooden poles in place in some areas where trucks or platforms cannot access them. “There are places, like in yards, where I am going to have to keep the wooden poles because I simply cannot access them with a truck. I need to use a worker wearing spurs to climb [the poles] to fix lines,” he said.

The hardening phase also entails burying 115,000- and 38,000-volt powerlines in critical areas, such as Centro Médico in San Juan’s Río Piedras district or Veterans Hospital. As reported by Caribbean Business, Prepa’s IRP calls for the use of natural gas to fire up its powerplants as a transition to renewables. Back in July, it issued requests for proposal (RFPs) to transform Units 5 and 6 of the San Juan Powerplant to use natural gas. The plan includes gas pipelines to transport the gas. “I don’t know about the gas pipeline, but I can tell you that what is contained in the IRP is what we plan on doing,” Sepúlveda said. “I can tell you we are seriously looking at renewables, but our generators are old, and they need to be able to handle renewables.”

A study completed by Siemens a few years ago stated that Prepa had limitations on to how much renewable power it can add to its grid. Sepúlveda explained that solar panels installed on a house can produce up to 100 percent of its power and, the next minute, is only producing 95 percent. “Our machines cannot handle that. They cannot be turned on fast…. We need to create a system that can handle energy fluctuations,” he said.

Prepa, Sepulveda said, will be transformed into a system that can use multiple alternatives to provide power. “Prepa must look at ways to bring the generation, which is in the south, to the north, or build minigrids in the north so we can respond faster,” he said.

On the other hand, he does not foresee the elimination of easements or important powerlines, such as the 51000 and 51900 powerlines that run from the south and then to Carolina and Bayamón.

Another proposed plan to help Prepa Build Back Better is to “standardize” voltage for transmission and distribution. Prepa uses six different voltages for power, a number that is expected to be reduced to three. That will make it easier for the public corporation to obtain equipment. “Instead of buying different transformers, I will be able to buy one transformer. During the emergency, we had to buy from different companies because nothing was standardized,” he said.

Part of the hardening process will also include cutting trees near powerlines. Sepúlveda said that because Prepa does not have a sufficient number of workers, it plans to hire outside contractors for tree trimming and cutting.

When Hurricane Maria hit the island, it not only downed powerlines but also flooded nine substations and two regional complexes in Arecibo and Mayagüez, respectively. “These substations will have to be redesigned or raised so they do not get flooded again, or moved to another location. I think one or two, like the one at Charco Hondo, Utuado, will probably have to be moved,” he said.

While Sepúlveda said solar panels and other renewable energy equipment can also be destroyed during a hurricane, Prepa will find ways to anchor solar panels and other equipment to make them resilient. Prepa also plans to continue to use its hydroelectric powerplants, but Sepúlveda did not know if the hydroelectric plants not in operation will be used.

Microgrids and industry

During the summer, the Puerto Rico Industrial Development Co. (Pridco), a government entity that works to boost the island’s economy, issued solicitations to establish microgrids at five industrial sites. In accordance with microgrid rules released in May, Pridco is interested in microgrids that utilize renewables.

Pridco said bidders on the project must undertake all aspects of the proposed microgrids as well as maintain them.

Microgrids must afford complete grid independence and the RFP says it is “imperative” that the projects provide innovative approaches, capable of supporting indefinite island-mode operation, meeting full energy demand during all points of the year.

The sites are: 

  • Aguadilla, which has 1,900 employees working in aerospace, defense, cloud computing and biotechnology. Tenants include Honeywell, Pratt & Whitney and Hewlett-Packard. The load is 18.75 megavolt amperes (MVA)/15-megawatt (MW) peak.
  • Añasco, where 3,000 employees work in biopharma and technology. Tenants include Edwards Lifesciences, J&J Vision Care, Amphenol, Cardinal Health, Techno-Plastics Industries, Integra Neurosciences and GE Industrial. The load is 9.4 MVA/7.5 MW peak.
  • Jayuya, home of Baxter Healthcare, a biopharma facility with 600 employees. The load is 6.25 MVA/5 MW peak.
  • Juana Díaz, where 1,500 employees manufacture medical devices. The tenants are CooperVision, Monsanto and Syngenta. The load is 9.7 MVA/8.7 MW peak.
  • Santa Isabel employs 1,600 people and specializes in aerospace, agricultural research and logistics. The tenants are United Technologies, AG Reliant Genetics, DHL, Techno-Plastics and Integra Neurosciences. The load is 4.7 MVA/4.2 MW peak.

A source within Prepa says the proposals to build microgrids for industry will impact Prepa’s revenues since industries comprise a huge chunk of Prepa’s revenues. Padilla said Prepa’s transformation will provide the reliability that industries need at affordable prices. He said Prepa’s privatization will continue while the system is also being made resilient.

Sepúlveda, on the other hand, said he sees a brighter future for Prepa. “With the allocation of federal funds, we are completing designs for the future grid and are working on that to minimize interruptions,” he said.

Natalie Jaresko, executive director of the Financial Oversight & Management Board, said there is no question that “if you have more microgrids, we are going to be hurting revenue potential. However, Jaresko said that even if a person is getting energy from a microgrid and is off the grid, there will be something put in place or a “legacy charge” to ensure payment of debt.

“There will still need to be some contribution, and I don’t know what form it is going to take…,” she said.

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