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P3 Authority opens RFQ seeking co.’s to manage PREPA’s legacy energy units

The Puerto Rico Public-Private Partnership Authority, together with the Puerto Rico Electric Power Authority, issued a Request for Qualifications seeking companies interested in managing, operating, maintaining and decommissioning one or more of the utility’s base-load generation plants and gas turbine peaking plants across the island.

This is the second P3 agreement that the government is seeking to establish to continue migrating toward private management of the island’s energy grid.

“Following the successful completion of the T&D RFP Process, the next phase of PREPA’s transformation process contemplates tapping private operational expertise for the operation, maintenance and eventual decommissioning, of PREPA’s Legacy Generation Assets,” the P3 Authority confirmed in the RFQ document, referring to the agreement announced in late June with LUMA Energy.

“To that effect, the P3 Authority and PREPA are looking to enter into a public-private partnership with one or more persons, including private sector companies or consortia, electric or energy cooperatives. The project will not involve the sale of any of the said Legacy Generation Assets.” said Fermín E. Fontanés, executive director of the P3 Authority.

The so-called “Legacy Generation Assets,” have a total systemwide PREPA-owned generation capacity of some 3,600 megawatts of power. The RFQ lists 15 facilities that are either out of service, in service, or providing limited service in: Aguirre; Cambalache; Costa Sur; Mayagüez; Palo Seco; San Juan; Daguao; Yabucoa; Jobos; and, Vega Baja.

“While the Legacy Generation Assets suffered only minimal damage from Hurricanes Irma and María [in 2017], the Costa Sur base-load generation plant and two of the four Mayagüez peaking units sustained significant damage as a result of the Jan. 7, 2020 earthquake,” according to the RFQ.

“Costa Sur Unit 5 is expected to be online in August 2020, and San Juan Unit 5 and 6 base-load generation plant has recently completed a conversion of combustion turbine Units 5 & 6 were recently converted from oil to dual fuel capability,” the document confirms.

“As a result, both units are now capable and commissioned to burn natural gas or diesel (number 2 fuel oil). This conversion was implemented in conjunction with the New Fortress LNG import facility and gas infrastructure to San Juan Unit 5 and Unit 6,” the RFQ states.

Meanwhile, “at the Palo Seco complex, three new Pratt & Whitney FT8 MOBILPAC units were installed and commissioned in 2019 although operations are still limited due to the need to install water injection systems for NOX control. The units are intended for peaking use and may be relocated in the future. For the purposes of this RFQ, these units will be operated by the successful proponent,” the document further noted.

“The remaining Legacy Generation Assets have historically been vulnerable to transformer failures, voltage and frequency fluctuations and transmission line outages. They thus experience above industry average equivalent forced outage rates, primarily as a result of poor equipment conditions due to the age of the units,” the document states.

Meanwhile, PREPA Acting Executive Director Efran Paredes said “Puerto Rico needs a modern electric system to increase reliability and resiliency, reduce costs, facilitate distributed generation and allow for economic recovery of the island.”

“Any modernization efforts need to focus on short- and long-term solutions to, among other objectives, reduce Puerto Rico’s reliance on fuel oil, increase availability of renewable energy and natural gas, increase system resilience and efficiency, invest in facility repairs, improve dispatch through implementation of modern technology, and retire, replace and upgrade inefficient generation assets,” he said.

Responses are due on Sept. 15, 2020 at 5 p.m.

Author Details
Author Details
Business reporter with 29 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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