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Manufacturers recommend putting Puerto Rico electric utility under emergency oversight

By on August 16, 2017

SAN JUAN – The Puerto Rico Manufacturers Association (PRMA) said Wednesday that the island’s Electric Power Authority (Prepa) needs to be put under emergency regulations overseen by the fiscal control board and the Energy Commission (PREC) steer it toward achieving service and efficiency metrics.

That is what PRMA President Rodrigo Masses and Tomás Torres, coordinator of the Competitiveness and Economic Sustainability Institute, said a day after Prepa Executive Director Ricardo Ramos spoke about the deterioration of the electric utility’s infrastructure.

Although Lisa Donahue, Prepa’s former chief restructuring officer, frequently spoke of improvements for the public corporation, Ramos said he inherited an electric utility with 60 percent of its ground fleet unusable; all helicopters out of commission; a deteriorated electric infrastructure, well below industry standards; structural failures in plants; pilots without certification; and 2,893 fewer employee, 86 percent of which are for field operations, among them power line workers, pruners, engineers and specialized technical personnel.

Puerto Rico electric utility puts infrastructure improvement plan on track

The official added that the generation system does not comply with the Environmental Protection Agency’s Mercury and Air Toxics Standard (MATS) rule, and in general the entire electrical system reflects the years of lacking investments in maintenance and improvements.

However, in an interview with Caribbean Business, Noel Zamot, the newly named revitalization coordinator, said that part of his job is to transform Prepa, but is against putting money into the island’s aging power plants to modernize them.

Masses seemed to disagree with Zamot’s expressions. “Now is the time to step into Prepa’s great areas of opportunity…. Our vision is that at Prepa (AEE), we must address the small and immediate as the executive director is doing. But apart from that we have to address the generation, transmission and distribution projects,” he said.

Torres argued that his position was not incompatible with what Zamot expressed. “One thing is the typical project and another thing is at the plant level, but that they be cost-effective and tactical, with purpose and goals,” he said.

Both spoke out against attempts by some Prepa creditors to establish a trustee to increase energy rates so it can pay its $9 billion debt. The situation requires a sustainable debt service for Prepa, an entity that recently filed for bankruptcy under Title III of Promesa law, that takes into account Puerto Rico’s economic development, they said.

Prepa will make every effort to persuade the fiscal board to provide maximum debt relief.

Although the utility’ director said he expects the use of renewable energy to increase, documents submitted to the PREC reveal that of the 68 contracts signed between 2008 and 2012 to provide renewable energy, 58 are in force but the construction of projects under 47 of the contracts are up in the air.

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