IEEFA Questions PREPA’s ‘Misguided’ Electric Plan for Puerto Rico; Notes High Risks and Costs; Sees Perpetuation of Import Addiction

‘Extraordinarily Short Shrift to the Potential for Renewable-Energy Development and for Energy-Efficiency Improvements’

CLEVELAND, May 2, 2016 (IEEFA) — The Institute for Energy Economics and Financial Analysis has filed public comments recommending that the Puerto Rico Electric Commission reject the Puerto Rico Electric Power Authority’s plan to rebuild the island’s electricity system.

The comments, which build on a September IEEFA report, “Opportunity for a New Direction for Puerto Rico’s Electric System,” question the outdated approach PREPA is promoting in its proposal to perpetuate the U.S. commonwealth’s dependence on imported fossil fuels and that would require its customers to pay for over $1 billion in potentially unnecessary infrastructure expansions.

Anna Sommer, an energy analyst and the lead author of the IEEFA public-comment document, said the PREPA proposal is “deeply unimaginative” and gives extraordinarily short shrift to the potential for renewable-energy development and for energy-efficiency improvements across PREPA’s grid and among its customers.

“PREPA can and should do better,” Sommer said. “The agency should be promoting energy independence and affordability by aggressively pursuing energy-efficiency improvements and renewable-energy investments.”

The public comments, prepared on behalf of El Puente’s Latino Climate Action Network (Enlace Latino de Acción Climática) highlight several flaws in the PREPA plan.

Among them:

• PREPA’s treatment of renewables as an afterthought—especially its treatment of solar energy, which is abundant in Puerto Rico.
• The risk PREPA is creating to ratepayers of having to pay for underutilized generation capacity from an overbuilt system.
• The likelihood that the proposed Aguirre Offshore Gas Port—a key component of PREPA’s IRP—will take longer to build than anticipated and, if built, will come in significantly over budget.

Sommer and Kunkel noted that IEEFA’s September 2015 report included three recommendations PREPA could adopt toward prudent modernization of Puerto Rico’s electricity system:

• Pursuit of a clean-energy transformation away from the current over-reliance on expensive and outdated oil-fired power plants.
• Avoiding locking into a long-term strategy that would make Puerto Rico overly reliant on natural gas.
• Implementing an integrated resource plan that would allow for prioritizing investment in wind, solar, and energy efficiency.
  

“We recommend that the commission reject PREPA’s IRP and instead initiate an inclusive public process toward developing an electricity system that is more robust, flexible, and ratepayer friendly than what PREPA is offering,” Sommer and Kunkel wrote.

FULL COMMENTS HERE

Media contact: Karl Cates, [email protected], 917.439.8225

About IEEFA

The Cleveland-based Institute for Energy Economics and Financial Analysis (IEEFA) conducts research and analyses on financial and economic issues related to energy and the environment. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy and to reduce dependence on coal and other non-renewable energy resources.