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Senate Minority Leader Warns About Prepa, AES

By on March 21, 2016

SAN JUAN — Senate Minority Leader Larry Seilhamer is warning about the amended contract between the Puerto Rico Electric Power Authority (Prepa) and AES, a privately run coal-fired powerplant in Guayama, which would allow the firm to dispose of millions of tons of ashes on the island, the New Progressive Party senator denounced.

Under the original agreement signed in the 1990s, AES had agreed to dispose of the ashes by exporting them, but following an amendment to the contract, the firm has been leaving them on the island. For Seilhamer, this development has resulted in a significant cost reduction for AES, the benefits of which haven’t been registered by Prepa.PrepaInterNews

“This is a very serious situation because as it has been publicly discussed, AES and Prepa amended the agreement to allow the disposal of ash in Puerto Rico, yet there was no modification to the power purchase contract’s economic terms between Prepa and AES, which means that the utility, which is in a severe fiscal crisis, continues to purchase power under the same terms, although AES is registering savings on the cost of transportation of the ashes outside the island,” Seilhamer stated.

A recently released, in-depth article by the Center for Investigative Journalism (CPI by its Spanish initials) raised flags over dealings between AES and Prepa, particularly over the disposal of ash—a by-product of the Guayama plant’s operations.

For his part, Seilhamer said that last year, he referred the amendment to the contract between Prepa and AES to the local Justice Department, Comptroller’s Office and Government Ethics Office, calling for an investigation into why AES’s transportation cost savings were not passed on to the utility and its customers.

“There could be serious concerns over the fiduciary duties of various officials,” he noted, while adding he will refer the matter again to the aforementioned agencies Monday.

“Moreover, soil contamination as a result of depositing ashes in Puerto Rico is highly concerning and should be investigated, as it could harm the environment and result in health conditions,” Seilhamer added.

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