Puerto Rico Utility Wants Privatization Plans Ready in 18 Months

May 4, 2018, 6:44 PM

The Puerto Rico Electric Power Authority will make a decision on how it will privatize the public utility within 18 months, CEO Walter Higgins told Bloomberg Environment in a May 4 interview.

The plan would include selling its power plants and leasing its transmission and distribution system to private companies, as Puerto Rico Gov. Ricardo Rossello previously proposed.

“I don’t see my job being to pick, or to say a certain company or way of doing things is the right way to do it. I think my job is to get PREPA to be as well-run as possible as a utility, and set up as much as possible to facilitate the next step, whatever the next step might be,” Higgins said.

The governing board of PREPA will be the first to decide the privatization model and to which entities it will sell the 5,830 megawatts of generation it owns, Higgins said. He didn’t name any utilities in line to buy the power plants, but a request for proposals on those sales could come in 12 to 18 months.

It could take a couple of years for the leasing model for transmission and development to be finished.

Up to Two More Months For Power

Separately, Higgins said it will likely take one or two more months to complete electricity restoration to remaining 25,678 PREPA metered customers still without power following Hurricanes Irma and Maria. That represents 1.74 percent of total customers.

The U.S. Army Corps of Engineers’ emergency restoration mission ends May 18, and it will demobilize the remaining contractors it has employed. Higgins said PREPA is completing its own six-month contracts with other U.S. companies, including Cobra Building Envelope Contractors, which is currently on the island.

“The Federal Emergency Management Agency and Army Corps team will continue its work in support of PREPA as the host-utility takes over final-mile restoration efforts,” Maj. Catalina Carrasco, a spokeswoman for the Army Corps, told Bloomberg Environment.

The contractors are focused now on the hardest-hit, hardest-to-access areas in and around the mountains of Caguas and Arecibo in particular, located around the mountain range called La Cordillera Central.

“In a few cases, we’re trying to identify right now it’s going to take to a long time to get power back, or in some cases it would cost so much that it might be worth the federal expenditure or the time,” Higgins said.

He said solutions PREPA and the Federal Emergency Management Agency are considering for these hardest-to-reach customers are solar panels plus battery storage packs, with a small backup diesel generator.

Higgins took over as PREPA’s CEO in March. He previously served as CEO of Ascendant Group Ltd., a Bermuda-based energy and infrastructure holding company.

Higgins and other representatives from Puerto Rico, along with Bruce Walker of the Energy Department’s Office of Electricity Delivery and Energy Reliability, are scheduled to testify at a May 8 hearing of the Senate Energy and Natural Resources Committee on the state of the island’s electric grid.

To contact the reporter on this story: Rebecca Kern in Washington at rkern@bloombergenvironment.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bloombergenvironment.com

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