Wednesday, November 21, 2018

Bill seeks 100% renewable energy generation in Puerto Rico by 2050

By on October 17, 2018

SAN JUAN – Puerto Rico Senate Vice President Larry Seilhamer and Minority Leader Eduardo Bhatia, along with a working group, introduced Wednesday a proposed regulatory framework and energy policy bill that would pave the way for the transformation of the bankrupt Puerto Rico Electric Power Authority (Prepa) and would deal with the effects climate change.

“The bill would allow a robust, accessible and efficient system” for bidding power companies to heed the island’s energy policies, Seilhamer said.

Sens. Larry Seilhamer, second from left, and Eduardo Bhatia, center (Courtesy)

The legislation calls for Puerto Rico to generate power using only renewable energy by 2050 and would end Prepa’s monopoly. It also establishes energy-saving requirements for all agencies, the noncompliance of which could result in the violating agency having its budget cut. Hearings on the bill are slated to start Oct. 26.

Seilhamer said that if the island’s Financial Oversight and Management Board “wants to help” it must lobby Congress to have it exempt Puerto Rico from the maritime cabotage laws that require goods to be shipped on U.S.-flagged vessels. The objective is to reduce the cost to transport natural gas, whose use as a fuel will serve as a transition to the use of renewables.

The filed bill would eliminate the use of coal by 2027, as well as phase out bunker C oil, which no longer complies with federal environmental standards.

The legislation does not address Prepa’s $9 billion debt because the issue is in an in-court bankruptcy-like process, “But the bill calls for the agreement with creditors to be honored,” Seilhamer said.

The bipartisan bill takes into account the effects of climate change and would require the island to aggressively transition to renewables. It defines the responsibilities of all energy providers, which would be regulated by the Puerto Rico Energy Bureau (PREB).

The regulator will have operational and fiscal autonomy through certain fees levied on energy providers. The legislation will grant PREB the power to impose fines for violations, which could be charged as misdemeanors,  and to enforce the bill’s mandates. 

“The PREB will have more money and more teeth,” Bhatia said.     

“This bill is the result of months of meetings, collaborations, studies and the input of different groups and people who contributed to what should be the transformation of the electrical system. The purpose is to have a Puerto Rico with a robust, resilient, affordable and reliable system.

“To this end, we are promoting the reconstruction, modernization and updating of the transmission and distribution system of the network. The monopoly is put to an end as we know it today to give way to competition in power generation and fuel diversity,” Seilhamer said.

“The legislation calls for a new portfolio of renewable energy, which states that by 2025 we will have 20 percent of the energy coming from renewables; by 2040 it will be 50 percent and by 2050 it will be 100 percent. This goal of renewable energy was worked on with the executive branch, and the governor asked us to include 100 percent by 2050. With this, we promote the aggressive transition from the use of fossil fuel for the generation of energy to the integration of renewable energy,” Seilhamer Rodriguez reiterated.

The also chairman of the Special Senate Committee on Energy Affairs added that the measure includes proposals provided by a working group, including Sen. Bhatia; Pablo Vázquez, president of the Engineers & Land Surveyors Association; Tomás Torres, director of the Institute of Competitiveness and Economic Sustainability (ICSE); the Rocky Mountain Institute group; University of Puerto Rico Prof. Luis Aníbal Avilés; and the executive director of the Advisory Commission for a Resilient Puerto Rico, Malu Blázquez Arsuaga.

Torres said the ICSE undertook a public collaborative effort with more than 41 groups to make the proposals, such as those for renewables, a strong regulator and the inclusion of energy cooperatives.

“The bill provides for the creation of energy coops that would unite technology and consumers,” he said.

Bhatia said the bill introduces the concept of prosumers, or those who combine the roles of producer and consumer. For instance, electric grid customers who also produce power and could share the surplus of energy with other users.

“Since 2014, advances in technology have been tremendous, and will allow more and more Puerto Ricans to become energy prosumers, that is, that we can have the capacity to produce energy as well as consume it,” Bhatia added. “The concept of being prosumers should be embraced by all of Puerto Rico and have thousands of families taking advantage of the concept.”

Seilhamer pointed out that the bill promotes the use of small-scale powerplants that have the capacity to operate with multiple fuels that minimize greenhouse gas emissions.

“The contracting parties that buy or operate generation assets of Prepa must modernize the plants or replace them with highly efficient plants in a period no longer than five years from the signing of the sale contract. This will have the effect of eradicating highly polluting fossil fuels such as bunker C.

“Likewise, the plants should have more modern technology, high efficiency and the ability to integrate distributed generation and renewable energy into the transmission and distribution network. The greater efficiency of the plants, and cleaner and cheaper fuel will result in savings in the pocket of consumers,” he said.

In the same way, the bill would require that all electrical service companies, including Prepa, comply with the integrated resource plan approved by the Energy Bureau.

The filed measure also facilitates interconnection to the transmission and distribution network by any available mechanism, including distributed generation, renewable energy sources, net-metering and the use of micro networks.

“The distributed generation capacity that can be interconnected to the electricity grid is increased from 10 [kilowatts] to 25 kilowatts,” Seilhamer said.

Finally, 10 percent of the payments received with respect to Prepa’s transactions will go to a Green Energy Fund to help finance the use of renewables.  

Meanwhile, Prepa’s board has lacked a consumer representative for more than a year. Torres, who is vying for the seat, said the bill will make changes in the law that will allow him to fill it.

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