A mystery who evaluated the contract to privatize power generation | Legislature

The evaluation of the draft contract that will allow power generation on the Island to be handed over to private hands continued yesterday with meetings of the Board of Directors of the Authority for Public-Private Partnerships (AAPP), learned THE SPOKESMAN.

The contract to privatize electricity generation is almost ready

Meanwhile, the executive director of this government office, Fermín Fontanés Gómez, has refused to reveal who makes up the Alliance Committee, which at this stage is in charge of supervising the negotiation of the terms and conditions of the Alliance Contract and producing the report with the recommendation.

To questions from this medium, Fontanés Gómez cited the extract from Law 120 —which governs Public-Private Partnerships— about which officials must be part of the committee. Although he insisted that he provide the information, the official did not provide the names.

“The names of the members of the Alliance Committee have never been revealed. This is protected information to safeguard the integrity of competitive processes and avoid undue influence and pressure,” he argued in writing.

However, from the review of the statute it does not follow that the people selected must be kept confidential.

The law establishes that for each alliance a committee will be established that will be made up of the executive director of the Financial Advisory Authority and Fiscal Agent (FAFAF) or his delegate, the official of the government entity that will be privatized —in this case the Authority of Electric Power (AEE)—, a member of PREPA’s Governing Board and two officials from any agency with knowledge and experience in the type of alliance to be established.

On the other hand, the Energy Bureau did not answer whether it has before its consideration the agreement to privatize the management of PREPA’s assets.

Although on Thursday Governor Pedro Pierluisi indicated that the bureau had reviewed it, at the close of this edition they had not issued the corresponding Energy Compliance Certificate.

The Energy Bureau informed in writing that it “will comply with the process established in the Law”, which requires proof “that the preliminary contract complies with the regulatory framework, the public energy policy and the law that is in force.”

analyzes circulate

A source of THE SPOKESMAN reported that this week information about the proponent began to flow, which according to this outlet, is the Genera PR consortium, made up of three companies: NFR Energía LLC affiliated with New Fortress Energy, Peak Energy and Black & Veatch.

“There are some huge tomes that this week was when the Board of Directors began to look at them… Before that, nothing had been circulated in black and white about the provisions and agreements by sections and by stages. None of it was. But they have already gone into (in depth) about it, ”explained the source, who spoke on condition of anonymity because she is not authorized to give information about the process.

He added that it is possible that between Friday and today “we are talking about particular things with something clearer in hand.”

According to the source, as part of the discussion, it was requested to add to the agreement that not only the hiring of island employees and contractors be required —as requested by the legislative presidents on Wednesday— but also that priority be given to the purchase of finished products that are manufactured in the Country —instead of buying them abroad— such as poles, tubes, conduits and electrical panels, among others.

criteria to meet

Among the criteria established by law to select the company to hire under the public-private partnership model, the reputation of the company or consortium is included, and that its directors, shareholders with direct control over corporate policy or its partners, cannot have been convicted of acts of corruption.

The Court of Appeals for the District of Columbia Circuit determined, in June of last year, that the liquefied natural gas terminal that the New Fortress Energy company built in San Juan was built without complying with the regulations and without the permits required by the Commission Federal Energy Regulatory Agency (FERC).

It was not possible to corroborate, at the close of this edition, if the Alliances Committee took this aspect into consideration when choosing Genera PR as the “preferred” proponent.

They ask for guarantees before privatizing power generation


Eduardo Ferrer Ríos, one of the two representatives of the public interest before the Board of Directors of Public-Private Alliances, reported yesterday that they are evaluating the reports of the Alliances Committee and that “there have been meetings about them.”

On whether he is aligned with the positions of the legislative presidents Rafael Tatito Hernández and José Luis Dalmau —that they will only approve a contract that guarantees the six basic points that they communicated to the governor— he declared that because it is a matter that is under his evaluation he cannot make comments or expressions that can be “misinterpreted”, but he assured that these concerns “are being addressed”.

To approve the privatization of any aspect that has to do with the energy system, the unanimous vote of the five members of the Board of Directors of Public-Private Partnerships is required, including the two representatives of the public interest, who were respectively nominated by the legislative presidents.

A vote against or the abstention of any member of the Board of Directors would prevent the signing of the agreement.

The president of the House of Representatives, said yesterday that Ortiz Camacho is “totally” aligned with the position that “there is no transaction” if the six points are not safeguarded, which include the prohibition of subcontracting affiliated companies, the protection of employees , greater transparency, that the savings achieved as a consequence or after the transaction be reverted to customers, among others.

“Let’s be clear: when we made the proposal, we previously discussed it with (Ortiz Camacho) because there have been conversations on the subject since before,” Hernández said.

His expectation is to discuss the contract with Ferrer Ríos and Ortiz Camacho before it is put to a vote, and he insisted that if the guarantees they demand are included, both would vote in favor.

Yesterday Governor Pedro Pierluisi reiterated that he hopes that in the “very near future” the Board of Public Private Alliances will approve the alliance.

“I have already asked that the proposals made by the presidents of the Chamber and Senate be accepted, to the extent possible, and I know that this is happening due to the conversations I have had with both Omar Marrero and Fermín Fontanés. It seems to me that we are going to be able to achieve the goal of having the board unanimously approve this alliance. That has not happened, but I think it will happen, ”he said.

At press time, it was not possible to contact the public interest representative, Liza Ortiz Camacho.

Call to reject privatization

The entity Queremos Sol, which brings together environmental organizations, reported that the six points required by legislative presidents as a condition for voting in favor of this public-private alliance are “insufficient” to guarantee that the private operator provides a good service.

As they understand, the best example is what has happened with LUMA Energy, which manages the power transmission and distribution system.

According to what they said, if Genera PR is in charge of the generation, the transition to renewable energy would be delayed —as established by the public energy policy— since this consortium would have interests associated with generation with fossil fuels.

They pointed out that New Fortress has a contract with PREPA for the supply of natural gas to units 5 and 6 of Central San Juan for five years, for a total of $1.5 billion.

“We urge you to forcefully and clearly reject the privatization of PREPA’s generation,” the entity stated.

For his part, the independent representative, Luis Raúl Torres, agreed that there are not enough guarantees and that it would be illegal to approve an alliance with a single proponent, since it would establish a private monopoly in electricity generation.

“No electric service company, by itself, through, or jointly with a subsidiary or affiliate, may control fifty percent (50%) or more of the capacity of the generation assets, with the exception of the Authority. To the Presidents of the House of Representatives and the Senate, I demand that they ask the 2 people who were recommended by them to the Governor —to be members of the Board of Directors of the Public Administration in representation of the public interest— to vote against that public-private alliance contract or at least abstain,” he said in a press release.

Hernández, president of the Chamber, maintained that privatization is already public policy by law and that the practical thing is that the debate focuses on how to establish a contract that defines parameters with which the failures committed in other alliances can be corrected.

Contract extension to LUMA leads to an increase in pay

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