Sunday, October 24, 2021

PREC Has Four Different Proceedings Against Prepa

By on June 24, 2017

The Puerto Rico Energy Commission (PREC) is conducting four different proceedings and making numerous demands on the Puerto Rico Electric Power Authority (Prepa) that are allegedly overwhelming the public utility and further straining its relationship with its regulator.

Prepa has very limited personnel available to comply with the requests for documents, legal briefs and other demands made by PREC, sources at the utility told Caribbean Business, stating that many employees have retired and there is a hiring freeze, so staff is limited.

PREC announced it will hold technical hearings June 26 to 28 on its economic analysis of the proposed Aguirre Offshore GasPort (AOGP), a liquefied natural gas (LNG) facility in Salinas, but did so after criticizing Prepa’s attempts to slow the ongoing investigation of the project.

The Puerto Rico Electric Power Authority (PREPA) logo is displayed in San Juan, Puerto Rico, on Friday, April 29, 2016. (Erika Rodriguez/Bloomberg via Getty Images)

The energy regulator has declined to approve construction of the AOGP, arguing it cannot at this time conclude it is the least costly and least risky path for serving customers’ needs and meeting the island’s energy policy. Since at least 2013, Prepa has touted the gasport, which was slated to provide natural gas to the Aguirre powerplant, as its main alternative to reducing energy costs for customers, but intervenors in the process are proposing other alternatives such as a gas pipeline from EcoEléctrica in Peñuelas to the Aguirre powerplant in Salinas.

With the technical hearing slated for next week, PREC recently launched a probe to ensure there are no other alternatives to the project that are more economically viable. Prepa has insisted the gasport will help reduce utility rates and that it is the most viable alternative, noting that it has 99% of its permitting approved.

Going back and forth

PREC has not relented in its efforts. Prepa officials recently requested additional time, until June 23, to submit a market research report on LNG, arguing that while they have been holding negotiations with their three LNG suppliers to obtain the authorization to disclose the data to PREC, such efforts have taken longer than expected. Prepa then asked PREC not to fine the public utility for not complying with the order to submit the report because it was depending on third parties for the information.

PREC noted contradictions in Prepa’s explanations because Prepa had said its Aguirre site analysis was based on Prepa’s own LNG market research rather than information from third parties. “Prepa cannot deny the commission, subject to limited exceptions, access to information relevant to its statutory duties and responsibilities simply because it deems such information to be confidential,” reads the order written by Interim Chairman José Román and Associate Commissioner Ángel Rivera.

PREC said Prepa’s argument that it was seeking approval from third parties to provide the information was “unpersuasive.”

PREC noted it has strict confidentiality rules aimed at preventing the disclosure of confidential or sensitive information. “Secondly, the commission has broad statutory authority to require Prepa to provide any type of information relevant to matters under the commission’s jurisdiction, including information deemed confidential by Prepa, or any other third party,” the commissioners said.

As this paper was going to press, PREC had not returned calls from Caribbean Business seeking information on whether Prepa had submitted the required documentation.

Prepa ’s plate is full

Earlier this month, Prepa complained to PREC that it had multiple deadlines pending, before June 30, on different procedures before the commission. Prepa is also completing the process toward making the restructuring support agreement a reality, since its approval by the Financial Oversight & Management Board was extended to June 28.

PREC was forced to agree to extend deadlines for other probes related to Prepa. For example, certain deadlines on Prepa’s performance were extended until July 14 and 15 to allow comments from interested parties.

The start of proceedings on the cost, allocation, rate design and other issues was extended to July 15. Five proceedings within Prepa’s Integrated Resource Plan were pushed a month ahead, to July 30. These pertain to the evaluation process for a large dual-capable combined-cycle (CC) unit at Aguirre; repowering reports on Aguirre CC units one and two; the plan to collect information related to consumption, peak hours and customer classes; negotiation efforts to date renewable energy contracts; and the review of renewable energy interconnection capabilities and limits.

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