Rep. Bishop has met with energy companies interested in Puerto Rico utility
SAN JUAN – Draft federal legislation to privatize the Puerto Rico Electric Power Authority (Prepa), authored by Alaska Rep. Don Young, coincides with bid reportedly put forth by a consortium formed by Shell North American LNG, Kindle Energy and ITC Holdings to buy the power utility.
Rep. Rob Bishop, who chairs the House Natural Resources Committee, which has jurisdiction over Puerto Rico and U.S. energy production, acknowledged Friday that he has met with executives from oil and gas companies in Washington to talk about Prepa. He also expressed support for the construction of a natural gas facility in Puerto Rico, a proposal that is contained in the bill.
The legislation, which was reported first by Caribbean Business, would make Prepa a private monopoly. The bill would allow a financially sound company that owns at least one facility involved in transmitting, generating and supplying energy, to take over Prepa. The privatization of Prepa would be considered a critical project under the Promesa federal law enacted to restructure the island’s debt.
The bill would not only create a $3 billion assurance program that would pay for revenue shortfalls, but also authorize the construction of an onshore liquefied natural gas facility.
The Puerto Rico Energy Commission recently shelved a review of the viability of the proposed Aguirre Offshore GasPort, a floating natural gas project that was slated to be built off the island’s south coast, stating that it was in the public’s best interest.
At a news conference with Resident Commissioner Jenniffer González during a visit to Puerto Rico on Friday, Bishop said Puerto Rico is at a disadvantage because it has no natural resources and must import power. He said natural gas is the solution to the island’s high power costs.
“Natural gas would be a brilliant way of doing that, and if we could increase natural gas, a vehicle for power on this island, you could reduce the cost as well as the environmental impact…so I would love to see more natural gas ports. They could be either stationary or they could be terminals that float as we have in other areas of the world. Once again, there has to be some infrastructure built before that,” he said. “As we reorganize Prepa, we have to see how we can integrate that.’
He said a natural gas facility could enable Puerto Rico to become a Caribbean energy hub.
According to Debtwire, a three-company consortium formed by Shell North American LNG, Kindle Energy and ITC Holdings is targeting Prepa’s generation business and its transmission and distribution system.
The consortium has proposed to invest some $4 billion in private capital to modernize the utility’s generation and fuel infrastructure over the next decade. Prepa is one of five entities, including the government, that have filed for bankruptcy under Title III of Promesa to restructure about $9 billion in debt.
Sources on the island said the Young energy bill coincides with the proposed energy bid that has also been floating in Washington, D.C.
Bishop acknowledged that he has met with oil and gas companies in Washington but declined to reveal their names. In an aside with Caribbean Business, he said the Young bill “is there. It’s one of the things we have to look at.”
However, Tomás Torres, executive director of the nonprofit Institute for Competitiveness and Sustainable Economy for Puerto Rico, said the Young energy bill, which has yet to be introduced, differs from Puerto Rico’s public policy.
The government is proposing legislation to sell Prepa’s generation facilities but put energy transmission and distribution under private concession.