The Puerto Rico Electric Power Authority (PREPA) is the primary electricity provider in the archipelago ofPREPA has been a vertically integrated monopoly for As has been widely reported, PREPA is also saddled with a debt of approximately nine billion dollars. Before Hurricanes Irma and Maria, PREPA had declining sales and excess capacity—peak demand was at 3060 MW, while capacity stood at Fossil fuels continued to supply 97–98 percent of its generation fleet, with imported fuel oil supplying the bulk of it, while 11 large-scale renewable projects ran through power purchase and operating agreements with PREPA’s grid crumbled after the hurricanes, leaving many without power for This article reviews Puerto Rico’s efforts to rebuild the grid in the context of the long-term plan approved for PREPA before the hurricanes and identifies key issues informing those rebuilding efforts.
On the heels of the hurricanes, the Puerto Rico Energy Resiliency Working Group, comprised of governmental and private entities, laid out a blueprint to rebuild Puerto Rico’s electricalThe group called for the transformation of the system to one “that is hardened, smarter, more efficient, cleaner, and less dependent of fossil fuel The group contemplated “increased use of distributed energy resources and accelerated penetration of Their assessment also recognized the potential conversion of certain units from fuel oil to natural gas, but acknowledged that distributed energy resources (DER) including energy storage and microgrids “may lessen PREPA’s dependence on large central generating stations, with the potential to retire existing plants and/or defer The microgrids serving critical infrastructure and remote communities had an estimated capital expenditure of The group recognized that its recommendations would have to be vetted in the context of a new
In a similar vein, in July 2018, Siemens—consultant for PREPA’s IRP—concluded that the Puerto Rico electric system should strive to be more “renewable, resilient, andTo become more resilient, Siemens proposed that the island be divided into 10 regional microgrids, which it called the “mini-grids.” Siemens’ proposal had an estimated cost of $7.6 billion for capital investments, of which $5 billion were attributed to the capital cost of new solar photovoltaics and
Regulatory Changes and Customer Participation
A decade ago, Puerto Rico’s unregulated and monopolistic energy landscape may have stymied plans to make the grid cleaner and more resilient. Widespread electrification, albeit unreliable, may have also rendered the promise of DER as illusory and unnecessarily expensive. Less than a year after the hurricanes, however, Puerto Rico’s regulatory environment and energy-related developments may facilitate efforts to make electricity services more reliable and resilient and to deploy DER. New laws include:
- The Regulation on Microgrid Development, which sets the framework to develop personal, cooperative, or third-party microgrids that can connect and disconnect to PREPA’s grid and may run on renewable energy and/or combined heat and
- The Puerto Rico Electric Power System Act, which initiated the sale of PREPA’s generation assets and delegation of other electric services to
- The Electric Cooperatives Act of Puerto Rico, which formally recognizes the cooperative system as a means to finance and operate
Recent exponential growth in solar deployment offers insight into customers’ potential use of these regulatory tools to meet theirMaximo Solar, for example, reportedly reached $32 million in year-over-year sales in 2018 compared to $18 million the
The community of Toro Negro, in the town of Ciales, has already spearheaded a community solar project whose solar panels were supplied by The project has a total capacity of 82.8kW, consists of 20 independent solar and battery systems, three different types of inverters and will provide power to 28 residences in the Each residence may connect to and receive electricity from PREPA’s grid, and 6 out of the 20 systems may supply electricity to Comunidad Solar Toro Negro, Inc., a nonprofit, holds the project’s property interests and will
While Toro Negro pushes for energy independence, the second proceeding for PREPA’s IRP is under way. It is useful, however, to revisit the first IRP proceeding. A year before the hurricanes struck, the Puerto Rico Energy Bureau (previously the Energy Commission) approved the Final Resolution and Order on theThe Commission approved certain elements of PREPA’s IRP like investments in transmission systems, but rejected others like the Aguirre Offshore Gas Port project (AOGP), which included constructing an LNG port in the South and converting certain units to PREPA was ordered to conduct a cost-benefit analysis of AOGP, as it had not proven that it was the most
In its preliminary filings for the second IRP, PREPA has proposed several scenarios that rely on at least one new LNG facility on the island or offshore and that introduce the minigrid concept advanced by
On November 19, 2018, the AOGP project wasDays after, the Energy Bureau allowed PREPA to continue a request for proposal (RFP) process to convert certain generation units in San Juan to natural gas and build the necessary infrastructure to supply natural gas to those The first IRP, however, did not study the conversion of these units to The Energy Bureau instead ordered PREPA to model said conversions in the ongoing
Puerto Rican residents are implementing significant changes to how the electric system was traditionally perceived. Their participation in novel proprietary, financing, and system models to supply themselves with power deserves attention. Although Toro Negro is only 1 of 2 projects submitted to the Energy Bureau for review as a microgrid, its success could incentivize other communities to establish their ownPREPA is expected to submit its official IRP proposal in February 2019, where the recent exponential growth in customer solar and battery systems should be quantified. In the island, a car is indispensable and, post-hurricane Maria, so is near load electricity generation.
PREPA’s pursuit of an RFP to supply natural gas to San Juan circumvents the IRP process, and the Energy Bureau’s endorsement may serve to undermine the validity of the approved IRP. Although the Energy Bureau ordered PREPA to study options including the conversion of certain power generation units to natural gas in the current IRP proceeding, it will remain to be seen how PREPA’s push for LNG in San Juan shapes the island’s energy plan to the potential exclusion of DERs and other alternatives that may be less capital-intensive and could provide a meaningful shift in the island’s energy portfolio development. Given PREPA’s projected load forecast and AOGP’s trajectory, customers may be better served with an IRP process that fully vets newly proposed gas alternatives and how these may feed off and enhance the demand-side projects happening concurrently. Moreover, as shown in the Working Group and Siemens reports, different microgrid configurations could yield material cost differentials, differences that should also be vetted.