Tuesday, October 26, 2021

Prepa: Aguirre Offshore GasPort project should move forward

By on February 22, 2017

SAN JUAN – The Puerto Rico Electric Power Authority (Prepa) requested on Tuesday the support of the Economic Development Committee of the House of Representatives to promote and continue construction of the Aguirre Offshore GasPort (AOGP), and to therefore comply with federal regulations and offer a better distribution service to utility customers.

The petition was made by three Prepa representatives who were cited to appear during the public hearings held by the House Committee on Economic Development, Planning, Telecommunications, Public Private Partnerships and Energy, which is chaired by Rep. Víctor Parés Otero. At the hearings, he discussed House Concurrent Resolution 18, which orders Prepa to submit to the Public Private Partnerships Authority (AAPP by its Spanish initials) the projects on powerplant conversion to natural gas or other renewable source located throughout Puerto Rico, especially in the northern region, for the purpose of establishing public-private partnerships.

Engineer Carlos Vázquez Vera, Carlos Rivera and Joel Ayala Hernández asked the House committee to support the Aguirre Offshore GasPort project. (Agustín Criollo / CB)

Engineer Carlos Vázquez Vera, Carlos Rivera and Joel Ayala Hernández asked the House committee to support the Aguirre Offshore GasPort project. (Agustín Criollo / CB)

Prepa argued during testimony presented before the commission by legal adviser Joel Ayala Hernández that “the adaptation of fuel systems to natural gas are more cost-efficient and viable than the installation of environmental pollution control equipment in existing units using residual fuel No. 6. The option of using natural gas requires completing the construction of a system of receipt, gasification and handling of said fuel for the areas where there is interest to serve.”

Prepa has a plan to convert the units of the Aguirre complex so these can use natural gas as fuel, instead of fuels derived from petroleum and diesel.

Ayala Hernández said that the conversion of these units has already seen an approximate investment of about $38 million in order to have the infrastructure ready once the natural gas supplier is available. Likewise, he assured that the use of natural gas for electric power generation at the Aguirre units will be possible with the construction of the AOGP.

For his part, engineer Carlos Vázquez Vera, also representing Prepa, said that although it seemed like a huge project, the conversion of the systems is much less expensive than the construction of a new central generation center.

“The conversion of San Juan 5 and 6, which are the only new and efficient units Prepa has, are the two most efficient combined-cycle units Puerto Rico has. What happens is these machines burn diesel, but the conversion of those machines to natural gas costs less than $15 million. What Prepa is pursuing is that natural gas supply projects be carried out, and as we mentioned, for all intents and purposes AOGP is a private-public alliance for which the parties agreed on what one contributes and what the other contributes,” Vázquez Vera said.

The AOGP project was affected last year because the Puerto Rico Energy Commission (PREC) did not authorize its construction until Prepa provides a detailed analysis of the benefit of the project in terms of costs.

The PREC capped development of the project at $15 million for permits, design, engineering and planning. This limitation, it was said, delayed the project, which would allow, as Prepa insists, to have greater fuel diversification, freeing the public corporation from fluctuations in the price of oil. In addition, it would enable it to comply fully with the Environmental Protection Agency’s Mercury and Air Toxic Standards (MATS).”

Nevertheless, Vázquez Vera reiterated the need for the project and its inclusion within the public corporation’s restructuring plans.

Asked by the committee chairman, project manager Carlos Rivera explained how Prepa invested the $38 million.

“The company has been paid the entire $6.8 million of the contract. The costs amount to $16 million. The other $38 million is part of the conversions that are not part of the contract. It is a necessary project for the conversion to natural gas but it is treated as a separate project in terms of contracting and that is where the cost amounts to $38 million, in the conversion of units 1 and 2 of the Aguirre plant,” Rivera said.

The officials recommended that since the AAPP and Prepa have already begun the project for the development of facilities to receive natural gas for the San Juan and Palo Seco plants, that it continue with the project to establish a public-private partnership that can supply natural gas to both plants.

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