IEEFA letter: Governor Vazquez urged to pursue alternative path for San Juan, P.R. power plant
January 29, 2020 (IEEFA U.S.) ‒ The Institute for Energy Economics and Financial Analysis (IEEFA) sent a letter on Monday to Puerto Rico’s governor, Wanda Vázquez Garced, urging her to reconsider plans for converting Units 5 and 6 of the San Juan Power Plant from diesel to liquid natural gas (LNG)-based generation.
Signed by IEEFA’s Director of Finance Tom Sanzillo, the letter was accompanied by documents calling into question the financial health of New Fortress Energy (NFE), the company tasked with converting the units from diesel to natural gas as well as the practicality of conversion plans in the wake of damages caused by the recent earthquake in Puerto Rico.
THE LETTER NOTED THAT NFE HAD LITTLE EXPERIENCE IN THE LIQUID NATURAL GAS SECTOR and that the company’s management “has failed to put a single project into service on schedule since becoming a public company.”
NFE’s financial condition could prove “fatal” to the LNG project
The letter was accompanied by an article from Capitol Forum, a private, market information service, that tracked NFE’s history of delayed construction as well as an analysis from a Value Investors Club post that demonstrated how NFE faces an enterprise-wise deteriorating financial condition that could prove “fatal” to the project.
Successful execution of the San Juan project is important, wrote Sanzillo, “for policy reasons, fiscal savings and to send the message that Puerto Rico has changed and can deliver on its promises.”
The letter states further that NFE is a “politically-connected company with little track record in the natural gas business.”
SANZILLO URGES THE GOVERNOR TO EXPLORE OTHER OPTIONS, to signal that Puerto Rico is changing course. “By finding an alternative solution, you will send the right message and set the course of Puerto Rico’s energy development on a sounder and more sustainable path,” the letter concludes.
Full text: Letter to Governor Wanda Vazquez on NFE conversion of San Juan plant
Versión en español: Carta a la gobernadora Wanda Vázquez sobre la conversión de NFE en la planta de San Juan
Media contact: Vivienne Heston ([email protected]), +1 (914-439-8921
About IEEFA
The Institute for Energy Economics and Financial Analysis (IEEFA) conducts global 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.
