PREPA proposes dropping electricity rate to 16¢ by ’19

Written by  //  April 3, 2014  //  General Biz News  //  No comments

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PREPA Executive Director Juan Alicea

PREPA Executive Director Juan Alicea

Puerto Rico Electric Power Authority Executive Director Juan Alicea outlined Wednesday a strategy the agency has set off to reduce the cost of electricity on the island to 16 cents per kilowatt-hour in five years by diversifying fuel sources for power generation.

The plan sets a goal of reducing energy costs to 22 cents in 2015, 20 cents in 2017 and 16 cents in 2019. At present, Puerto Rico residents pay about 28 cents per kilowatt-hour.

To get it done, the public corporation is pushing a four-pronged simultaneous effort: converting more efficient units, integrating 600 megawatts of renewable energy into the existing power grid, replacing and modernizing less efficient units, as well as implementing administrative and operational adjustments, Alicea said.

“Definitely, the main strategy to reduce energy costs in Puerto Rico must be aimed at the diversification of fuel sources for power generation. We will achieve this through initiatives such as the use of natural gas and the integration of renewable energy sources. Also, we will modernize six generating units, which will significantly increase the efficiency of our plants,” Alicea said during a morning news conference.

Alicea also warned that the priority now must be to build the infrastructure needed to receive natural gas, pointing to the Aguirre Offshore GasPort as the facility to be developed. The floating natural gas regasification facility will be located off the coast of Salinas near the Aguirre generation plant.

Once finalized, the project will allow achieving savings as a result of using natural gas by reducing energy production costs, which will in turn reduce the cost per kilowatt-hour, he said.

During the news conference, Alicea also announced that the agency is close to wrapping up the assessment of desirability and convenience for the development of infrastructure for natural gas at the San Juan and Palo Seco facilities. The project being done through the Public Private Partnership law will provide PREPA the necessary evaluation to launch a Request for Proposal from suppliers by year’s end.

Another initiative that will happen this year is the implementation of a price survey process for the modernization of generating units, as well as for improvements to hydroelectric plants capable of to increase their capacity.

“Through these measures, PREPA is moving in the right direction for the renewal of its generation infrastructure,” Alicea said.

Integrating renewable energy projects
Regarding renewable energy projects, Alicea said the agency is “working hard” to safely integrate the proposals.

To this end, in December 2013 the public corporation completed the assessment to ease the level of compliance related to the minimum technical requirements for renewable energy projects.

The following month, the agency announced the agreements reached during the renegotiation of the kilowatt-hour cost with several companies, a process that is ongoing until the goal of integrating up to 600 megawatts into the power grid, he said.

“Developing energy projects takes time, so I encourage joining efforts to achieve a consensus to achieve an energy reform that is beneficial to the people, that is objective and realistic,” Alicea said. “We have no objection to adopting initiatives that are not included in our plan, that may represent faster results and that will translate to greater savings for the people of Puerto Rico.”

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