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Puerto Rico utility to submit revised integrated resource plan

By on May 30, 2019

A Puerto Rico energy regulator hearings in November 2016 to investigate Prepa’s rate hike. (Agustín Criollo/CB)

Energy regulator gave Friday deadline; Prepa chief says power could be restored in months after future hurricane

SAN JUAN — The head of the Puerto Rico Electric Power Authority (Prepa), José Ortiz, said he will comply with the Energy Bureau’s deadline and submit by Friday a revised version of the utility’s integrated resource plan.

He made the remark in an aside during a Puerto Rico Manufacturers Association convention Thursday.

The 20-year IRP is to transform the island’s energy production and presents several strategies and scenarios for long-term supply. Prepa turned over the document to the Puerto Rico Energy Bureau (PREB) in February, but the regulator gave the ultility 30 days to revise it after identifying numerous deficiencies. The regulator later extended the deadline to Friday.

PREB Assistant Commissioner Lillian Mateo Santos said that after the bureau evaluates the document, it will be put through hearings before making a final determination.

The regulator ordered Prepa to justify certain “fixed decisions” and explain the need for preselected natural gas resources and limitations on solar power and storage. This year, the government enacted a law that would require the island to generate all of its power needs from renewable energy sources.

Along with proposing solar and storage projects, the IRP, which was developed by Siemens, the German engineering conglomerate, also recommends a variety of natural-gas infrastructure, compromising the island’s legislated public policy to only use renewables by 2050.

The resource plan proposes to divide the island into eight mini-grid regions for a distributed system that can operate independently in the event of a disaster. It also calls for smaller microgrids in geographical areas that make repairs difficult.

The original IRP supported two scenarios for the provision of energy. The first is a generation portfolio, identified as Scenario 4 Strategy 2 (S4S2), which meets the criteria for least cost, resiliency and viability in terms of installation of solar energy storage and distribution. It calls for the option of developing ship-supplied liquefied natural gas (LNG) terminals at Yabucoa on the east coast and Mayagüez on the west coast.

The scenario also includes an LNG terminal in San Juan, which could obtain permitting approval. The scenario assumes solar and storage costs and availability based on reference-case assumptions.

However, the IRP also favored a scenario called Energy System Modernization (ESM), which according to Prepa, is based on several generation expansions.

“The purpose of the ESM Plan is to expedite the implementation of a preferred plan, utilizing procurement options presented by the Public-Private Partnerships Authority, identify the pricing structure necessary to retain existing natural gas-fired generation in the south, consider location alternatives for new large-scale [combined-cycle gas turbines] and ensure reliable capacity in the San Juan area,” the IRP reads.

The ESM is based on “fixed decisions” that include the building of a natural gas import terminal and gas plant in Yabucoa, a new land-based natural gas import terminal and gas plant in the San Juan area, a ship-based natural gas import terminal and conversion to natural gas of existing units in Mayagüez, and a new powerplant in San Juan. The economic simulation of the ESM case results in 900 megawatts of utility-scale photovoltaic additions over the plan’s first four years.

The bureau sought clarification from Prepa as to why it created a scenario containing the so-called fixed decisions for projects.

Better off

On Thursday, Ortiz also said the island’s electrical system is better prepared to recover after a natural disaster and assured that, instead of a year, it will only take three to four months to bring power back up if a hurricane similar to Maria strikes the island again. Hurricane season starts June 1.

“The transmission is better than before Maria but the distribution still has problems,” he said.

He noted that Prepa has 33 memorandums of understanding signed with other utilities to provide a response, and has drafted contracts with established fees to avoid paying too much for repairs.

More than $100 million worth of inventory is available in staging yards around the island, he said, adding that the utility is also implementing a comprehensive vegetation management plan to reduce the number of outages caused by fallen trees or vegetation.

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