The Institute for Energy Economics and Financial Analysis (IEEFA) sent a letter to Gov. Wanda Vázquez, 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 LNG sector and that the company’s management “has failed to put a single project into service on schedule since becoming a public company.”
The letter was accompanied by an analysis (“Unit 6 Conversion Stalled Pending Earthquake Damage Assessment”) from Capitol Forum, a private, market information service, that said NFE faces an enterprise-wide, deteriorating financial status that would 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 urged Vázquez 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 sounded and more sustainable path,” the letter concludes.