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Governor calls for transformation of Puerto Rico Electric Power Authority


From the October 28, 2013 issue of Public Power Daily

Originally published October 28, 2013

Puerto Rico Gov. Alejandro Garcia Padilla unveiled a new energy policy that calls for transforming the Puerto Rico Electric Power Authority (PREPA), with a goal of lowering energy costs by 20 percent in two years and 50 percent in the next 12 years. Padilla, who took office in January, said the authority is very capable and has committed employees and governing board members, but lacks a clear statutory mandate regarding its functions. His administration will provide PREPA with a strategic plan with defined short-, medium- and long-term goals.

Padilla plans to establish a new regulatory board that will pass judgment on all power purchase contracts with private producers and examine rates to ensure that they reflect the true costs of producing, transmitting and distributing electricity. All meetings of PREPA’s board will be broadcast live and archived online and all contracts will be made public on the Internet, he said. He directed the authority to publish information on its rates and costs every month and to review its rates every two years, relying not just on economic projections but on broad public participation.

The authority should have a new business model in which it depends less on electricity sales and more on income from the provision of other services, Padilla said. He said the authority will have a plan to make the most of its fiber-optic infrastructure.

Padilla said his energy policy focuses on four main actions:
  • Promote a new culture of energy conservation and efficiency;
  • Promote energy independence and develop new sources of renewable energy;
  • Promote the use of public transportation; and
  • Provide more efficient production, distribution and cost of electricity.
PREPA has converted two large oil-burning units to natural gas and is in the process of converting another, Padilla said. That will allow the country to reduce its dependency on oil from 61 percent to 40 percent, lower costs, comply with federal regulations and accept a greater amount of renewable energy, he said. New renewable energy projects have Puerto Rico on track to increase its generation from renewables from 1 percent to 6 percent by the end of 2014, he said. All new distribution network projects should allow the maximum possible integration of renewable resources, he said.

Padilla said his goal is an energy business model where customers are the first priority and conservation and efficiency are promoted, with a generation portfolio with enough diversification to keep prices stable. 

"The country’s energy future is our national project," he said. 
 

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