Friday, October 23, 2020

Group says fiscal board request for reassessment of energy contracts taints Puerto Rico’s image

By on August 19, 2020

Association of Renewable Energy Producers says panel is stymieing compliance with the law

SAN JUAN – The Association of Renewable Energy Producers (APER by its Spanish acronym) defended Wednesday the renegotiations of the power purchase and operation agreements (PPOA) of the Puerto Rico Electric Power Authority (Prepa) and stressed that a delay in the approval of the contracts by the Financial Oversight and Management Board (FOMB) sends a negative message to proponents that affects the island’s image and business environment.

“Likewise, it delays compliance with the energy law of Puerto Rico, in addition to delaying the transformation that is sought after so much,” reads a media release issued by the trade group.

According to the board’s statement, the “sheer scope proposed by PREPA – delivering 593 megawatts (MW) of renewable energy at once through the 16 proposed contracts – would result in electricity rates higher than projected in the 2020 Certified Fiscal Plan for PREPA.”

The board said the utility should only “qualify those proponents with the highest degree of technical and financial capabilities” and initially grant only only 150 megawatts of “total renewable energy capacity developed through the proposed contracts….”

APER’s release said its executive director, Julián Herencia, believes the board’s decision “is accompanied by a defective and flawed prima facie analysis because it limits the analysis to a fraction of the projects’ useful life instead of considering their total duration. These determinations are extremely disappointing, as the Board knew the parameters of the renegotiation of the contracts and even participated in several meetings where they issued opinions that influenced the process.”

Herencia said: “This new delay projects, once again, the image that Puerto Rico is not complying with its contractual obligations. The opinion issued by the Board regarding the renegotiation of these contracts; it ignores the current law ‘Public Energy Policy Law of PR’ approved in 2019. These contracts are supposed to be part of the first steps in [Prepa’s] transformation. Their position adversely affects the continuity of the restructuring process.”

APER questioned why the “required changes are not accompanied by a rigorous analysis that allows us to understand and consider the reason for these requirements.”

The group went on to say that among the “benefits, the vast majority of the projects have been developed by Puerto Ricans” and consider “using local talent for its development and construction. They require a construction schedule that allows maximizing local resources, ensuring economic development and creating jobs here.”

The board, Herencia said, “had expressed its support for projects that had rates below 10 cents. It had also indicated that PREPA should allow other projects beyond the 16 to have a fair opportunity to negotiate before scrapping them; however, they now state that there should be a limit of 150MW. What are these dramatic changes in posture due to?”

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