Puerto Rico energy regulator declares Carraízo Dam project ineligible for fast-track permitting
SAN JUAN – The Puerto Rico Energy Commission (PREC) has declared the proposed Carraízo Dam Hydroelectric Generation Rehabilitation project ineligible to be classified as a “critical energy project” and thus will not be put through an expedited permitting process.
The proposed project was seen as crucial to help reduce energy costs for the Puerto Rico Aqueduct and Sewer Authority (Prasa) and help jumpstart the rehabilitation of other dams to poduce power.
PREC made its decision in a recent letter to Noel Zamot, the Puerto Rico fiscal oversight board’s revitalization coordinator, who is in charge of moving along critical infrastructure.
The proposed Carraízo Dam project includes the installation of three turbines with a generating capacity of 8 megawatts (MW) at the end of the existing dam to generate power from discharge water.
PREC said there were deficiencies in the information it was provided, which limited the regulator’s ability to determine that the project would connect to the Puerto Rico Electric Power Authority’s (Prepa) system or whether it would have an adverse effect on the utility’s integrated resource plan, which PREC had modified.
Federal law establishes that PREC’s evaluation is required for energy projects that will connect to Prepa’s transmission or distribution facilities.
“The Carraizo Dam proposal does not specify if it will interconnect to PREPA’s grid or if the energy produced by the system will be consumed entirely on-site without any need for it to be transmitted through PREPA’s grid. On this subject, the application and supporting documentation provide contradicting information,” PREC wrote.
The application states as one of the benefits of the proposed projects that it will “produce electric energy at very low costs” that will “help considerably in lowering” the cost of electric power for Prasa.
However, PREC said the proposed power purchase agreement between the water utility and Steamflow Technology Corp. states that the contractor will “[a]ssist and/or represent PRASA in negotiations for the formalization of the Electric Power Selling Agreement with the Local Electric Utility,” Prepa.
“Similarly, it is unclear whether Prasa’s facilities will consume the total energy output generated by the project or if excess energy output will be injected to Prepa’s grid,” PREC stressed.
The total projected capacity of the proposed project (7 MW – 8MW) suggests that not all the energy produced by the system will be consumed on-site and would require infrastructure to inject excess energy output to Prepa.
“Certainty regarding the project’s impact on PREPA’s grid, including whether the project interconnects to PREPA’s grid, is a necessary component of the Commission’s evaluation of a proposed critical project under Section 503 of PROMESA [Puerto Rico Oversight, Management, and Economic Stability Act]. A project that does not interconnect to Prepa’s grid, and therefore will operate separately and independently from Prepa’s system is not subject to the commission’s evaluation,” PREC concluded.
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