In a period of 10 years, the Puerto Rico Electric Power Authority (Prepa) proposes establishing Public Private Partnerships (PPPs) to generate energy, invest more than two billion dollars to modernize the distribution network and complete the construction of the Aguirre Offshore Gas Port (AOGP) to eliminate dependence on oil in the system.

All at a cost of $4.66 billion and under Title V of the PROMESA law that allows the permitting process for public works to be streamlined, according to the fiscal plan of that public corporation approved by the Fiscal Control Board (FCB).

The building of the AOGP, however, does not yet have the green light because the Energy Commission, entity created to regulate the energy market in the island, still has to approve the Integrated Resource Plan to ensure compliance with energy demand. Likewise, the plan goes further and assumes that by 2018 they will find the financing necessary to cover 80% of the total cost of the project.

Of the total cost of the project, about $470 million, Prepa is prepared to pay $56 million in pre-construction costs, which in turn will come out of the collections for the current fiscal year. The fiscal plan illustrates AOGP as an important step for the generation of energy with natural gas and the compliance of Prepa with the Mercury and Air Toxics Standards (MATS).

The supposed deadlines indicated that Aguirre will operate with natural gas from 2021. Likewise, the dates make a strong commitment to the award of additional PPPs for the generation of energy through an investment of $1.68 million to create competitive opportunities for private tenderers who have the expertise to manage and operate generating plants.

Simultaneous to this task, the plan also establishes the withdrawal of four generating plants for 2022, 2024 and 2025 in San Juan, the Southern Coast and the Aguirre steam units.

A Bold Bet To Completely Discard Use Of Oil For Generation

The year 2026 also means to be a transcendental deadline for Prepa in terms of the fuel to be used in its generating plants. This will mean discarding oil as fuel and increasing natural gas generation by 34% projected for 2018, up to 57% by 2026.

Conversely, the dependence on oil, projected at 45%, would drop by 2% on that date. This would be achieved through an increase in the use of renewable energy from 3% to 18% and coal from 17% to 22%.

However, although the plan bets on PPPs to lead the introduction of alternative sources to generate energy, the document predicts that by 2026, 30% of the energy generated will be through these alliances. Meanwhile, the cost to diversify the energy generation portfolio would be $1.68 billion between 2018 and 2026.