Puerto Rico fiscal board to power authority: Reassess renewable energy contracts
Says these would result in higher electricity rates than projected in fiscal plan
SAN JUAN – The Financial Oversight and Management Board for Puerto Rico warned about the Puerto Rico Electric Power Authority’s (PREPA) July 1 submission of 16 renegotiated non-operational renewable energy power purchase and operating agreements (PPOA), saying these would need to be reassessed.
Acknowledging that an increase of “renewable energy generation is an important part” of the utility’s” transformation, as well as a requirement under Puerto Rico Act 17-2918,” the federally appointed fiscal panel said Prepa must “ensure that renewable energy is delivered at a reasonable and affordable price.”
According to the board’s statement, the “sheer scope proposed by PREPA – delivering 593 megawatts (MW) of renewable energy at once through the 16 proposed contracts – would result in electricity rates higher than projected in the 2020 Certified Fiscal Plan for PREPA.”
The board said the utility should only “qualify those proponents with the highest degree of technical and financial capabilities” to initially grant only only 150 megawatts of “total renewable energy capacity developed through the proposed contracts” to “ensure consistency with the electricity rate projections” in the 2020 Certified Fiscal Plan.
“It is important for Puerto Rico to start increasing the share of renewable energy as soon as possible, and the shovel ready PPOAs provide a unique opportunity. PREPA should then gradually expand renewable energy to take advantage of technological improvements that increase efficiency even further, a more competitive bidding process, and improved contract pricing once Puerto Rico emerges from bankruptcy.
“The Oversight Board believes renewable energy and more affordable electricity prices should not be a tradeoff. The people and businesses of Puerto Rico deserve both,” the panel added.