October 15, 2020 Read More →

Lack of transparency could cost Puerto Rico $10B in FEMA funds for grid work

San Juan Daily Star:

The consumer representative on the Puerto Rico Electric Power Authority (PREPA) board, Tomás Torres Placa, said Wednesday that the contract between the power utility and LUMA Energy would put at risk more than $10 billion in Federal Emergency Management Agency (FEMA) funds for the reconstruction of the grid. 

“Every time the Public-Private Partnerships [Authority], the Energy Bureau, LUMA itself and the Electric Power Authority refuse to allow this to go to a public process, they put at risk the $10.5 billion in FEMA funds that were recently assigned to Puerto Rico,” Torres Placa said in an interview with Radio Isla 1320 AM. 

The Institute for Energy Economics and Financial Analysis has said the contract is likely to push the price of electricity from a targeted 20 cents per kilowatt-hour (kWh) to 30 cents/kWh because of the added costs of debt servicing, fuel prices, political patronage and poor contracting. Consultant and oversight fees are expected to rise to $254 million during the current fiscal year, enough to boost electricity rates by 1.6 cents/kWh.

The LUMA contract also encourages the use of natural gas, thwarting the island’s goal of achieving 100 percent renewable energy by 2050 by allowing LUMA to file changes with regulators to the island’s integrated resource plan. 

[Staff Report]

More: Consumer rep: PREPA-LUMA deal puts $10.5 billion granted by FEMA at risk

Posted in: IEEFA In the News

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