Puerto Rico Energy Commission Approves Fortuño-Era Renewables
Editor’s note: This article first appeared in the June 12-18 print issue of Caribbean Business.
Nine of 10 energy projects evaluated by the Puerto Rico Energy Commission (PREC) for designation as “critical projects” to expedite their construction, were part of 63 renewable energy contracts signed by the former administration of Gov. Luis Fortuño and whose terms were described as “onerous” and “leonine” by his successor Gov. Alejandro García Padilla.
The García Padilla administration renegotiated about 20 of these 63 contracts, most of which were in flood-prone areas or on farmland. The contracts, which were for periods of 25 to 30 years, required the now-bankrupt Puerto Rico Electric Power Authority (Prepa) to pay 15 cents-18 cents per kilowatt-hour for the energy produced and a yearly rider of up to 2 percent.
The reports on the PREC projects showed, however, that under García Padilla’s administration, the contracts for the projects were extended instead of canceled, even though there were questions about whether they could be placed within the energy grid. Prepa eventually commissioned a study from Siemens that found up to 600 megawatts (MWs) of renewable energy could be integrated with the power grid.
PREC examined the projects to first determine if they would have an effect on the approved Integrated Resource Plan (IRP) and, second, whether it would “adversely affect” an approved IRP. The files on the projects show they were included in the approved IRP, even though Prepa is preparing a new one that is to be completed later this year.
Of the 10 energy projects reviewed, PREC rejected two of them. The Cabo Rojo Solar Photovoltaic Energy System, a solar array in Cabo Rojo, was not accepted because, while its sponsors said a contract was signed in 2011, PREC could not find the power-purchase agreement or identify the project in the IRP.
PREC also rejected the proposed Carraízo Dam Hydroelectric Generation Rehabilitation project, which proposes the installation of three turbines at the dam with generating capacity of 8 MWs. The project, which was not part of the original 63 contracts, was rejected because, while the sponsors said it would help reduce power costs for the Puerto Rico Aqueduct & Sewer Authority (Prasa), there were no indications Prasa would consume the output of energy generated by the project. The $12 million project is proposed by SteamFlow Technology, whose corporate certificate does not appear in the State Department’s corporate registry.
PREC gave the green light to the proposed Blue Beetle III PV solar plant, a proposed 20-MW solar facility in Arecibo, which has had a power-purchase operating agreement since October 2011, after it was determined the project was contemplated in the IRP.
PREC also gave the green light to M Solar Generating, a 50-MW solar facility in Vega Baja, which had signed a power-purchase agreement in 2012 with Prepa for 25 years. PREC said that while the project is not part of the IRP, it was going to help Prepa comply with renewable requirements. The project was slated to begin construction this year, according to a settlement.
PREC said Vega Serena Solar, a 20-MW solar facility in Vega Baja, which already has a power-purchase agreement signed, was eligible to become a critical project. The commission also approved the Vega Baja Solar project, a 15-MW solar and battery-storage facility in Naguabo, which has had a power-purchase agreement with Prepa since December 2011 and was amended in October 2012.
- Other projects that received the PREC seal of approval were:
Morovis Solar, a 33.5-MW solar and battery-storage facility in Morovis. The project has had a power-purchase agreement with Prepa since December 2011, which was amended three times, in 2012, 2014 and 2015.
- Guayama Solar Energy, a 17.8-MW solar and battery-storage project in Guayama, which has had a power-purchase operating agreement with Prepa since 2010, which has been amended twice since then, in 2011 and 2014.
- Solar Project San Juan, a proposed 15-MW solar and battery-storage facility in San Lorenzo, which has had a power-purchase agreement with Prepa since 2012 and was later amended.
- SolarBlue Bemoga, a proposed 20-MW facility in Dorado, which has had a power-purchase agreement with Prepa that was signed in October 2012 and amended Dec. 21, 2012, and two times thereafter, in 2014 and 2015.