Saturday, February 4, 2023

Puerto Rico selects company to privatize electricity

SAN JUAN, Puerto Rico ( Associated Press) – Puerto Rico on Wednesday privatized its electricity generation and as part of an initial 22-year contract, Genera to take control of operation and maintenance of state power generation units in the United States Chose PR. Dollar.

The announcement comes as the island struggles to rebuild its deteriorating electricity grid amid frequent blackouts, which Governor Pedro Pierluisi says is partly attributed to “outdated and unstable” generators.

“I am confident that we are on the right track to deliver a reliable and affordable energy system to our people,” the governor said.

Genera PR is a subsidiary of New York-based New Fortress Energy, which works closely with Shell Oil and other oil and gas producers. Genera will also manage contracts related to the purchase of fuel for the island’s 12 power facilities as part of a 10-year contract with the Puerto Rican government.

“Today is a historic day,” said Secretary of State Omar Marrero, who pointed out that recent storms have revealed the deteriorating and critical condition of the island’s energy network.

The island’s power generators, some more than 50 years old, have suffered blackouts in recent years at rates five times the industry average, producing less than half the electricity forecasted by the government.

“Decades of mismanagement and neglect have left Puerto Rico with an expensive, inefficient and outdated energy system,” said a statement supporting the contract awarded to Genera PR by a federal control board that oversees Puerto Rico’s finances. said in.

Many Puerto Ricans are wary of the process, knowing that the privatization of electricity transmission and distribution in June 2021 will not improve problems such as widespread blackouts, which have worsened. The power situation on the island is so bad that the US government recently announced that it would provide temporary power generation through boats and onshore generators.

Another concern is that already high electricity bills could become even more expensive under the new public-private partnership, a fear officials dismissed as they said Genera PR would have incentives to generate savings, including 50% will be given to the consumers.

The company will receive $22.5 million per year during the first years of the contract, a payment that will virtually shut down production units for renewable energy sources as far away as Puerto Rico. Genera PR will also receive incentives of up to $15 million during a 100-day transition period and up to $100 million per year, a payment that will also reduce if the units close.

Wes Edens, founder and CEO of New Fortress Energy, said Genera PR will begin operations in the middle of the year.

He said the blackouts are unacceptable and pointed out that electricity bills in Puerto Rico are “too high.”

Edens said, “While we recognize the challenges that lie ahead… we believe the opportunities here… are tremendous.”

As of Wednesday, the government had refused to publish a copy of the contract or the name of the chosen company, even after the governing board of the Puerto Rico Electric Company and the Authority for Public-Private Partnerships met privately and approved it.

Tomás Torres, a member of the governing board representing the public interest, voted against the contract.

Torres pointed out that these contracts are usually done with extensive citizen participation “that will have an impact on all areas that make up the public interest.” He also stated that Genera PR would have a monopoly on energy as the sole electricity provider on the island.

In addition, Torres warned that the contract represented additional costs for the state power company, which has nearly $9 billion in debt – the largest of any Puerto Rican government agency – and embroiled in a bitter battle with creditors. has happened as it tries to emerge from bankruptcy. … How much debt will be passed on to consumers remains to be seen.

Nation World News Desk
Nation World News Desk
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