As if they were trying to “bring to life” a toy by sections, the United States Army Corps of Engineers (USACE) intends to begin the generation of energy from the Palo Seco facility with a temporary unit in the next nine days, while the Puerto Rico Electric Power Authority (PREPA) focuses on interconnecting other generating plants.
This dynamic aim to link the southern area, which produces the largest generation of electricity, with the northern one, which requires greater demand. And if the 50-megawatt generator that is already in Puerto Rico, through a USACE contract with the company Weston Solutions is added, the authorities assure that they could give stability to the north zone that daily suffers blackouts that have left critical areas such as the Medical Center without power.
To do so, yesterday the USACE granted a $ 240 million contract to repair the energy system, the second of perhaps half a dozen it intends to grant. Meanwhile, PREPA intends to interconnect between the weekend and early next week the first lines of the north and south systems to increase from 13.7 percent of customers who had the service yesterday, up to 30 percent.
"These lines are important and these interconnections are essential to lift the economic engine of the Island. Pharmaceutical companies represent one-third of the gross national product of Puerto Rico. That is an indispensable cluster where the Power Authority has to focus its resources," pointed out Fernando Padilla, PREPA Project Manager.
That 30 percent, he said, should increase to 50 percent by mid-November. Meanwhile, by early December, the figure should reach 80 percent, until it reaches 95 percent, the goal imposed by Governor Ricardo Rosselló by December 15.
Although PREPA’s crews work across the Island on a daily basis, Padilla acknowledged that this additional power generation will mainly impact customers in the metropolitan area.
Interconnections require three phases: repairing the transmission lines, substations and distribution lines.
José Sánchez, Director of Field Operations and Safety of the Corps of Engineers, said that the priority is to energize hospitals and pumping plants, filtration and water treatment plants and then connecting the southern lines with the northern ones "to give more stability to the energy of the metropolitan area."
Padilla agrees with that approach, although he added the connection of the industrial zone to the list of priorities.
Sánchez specified that it is necessary to connect the three most important transmission PREPA lines. One of them, the South Coast to Arecibo, has already been repaired. The line from Aguirre to Bayamón and the line from South Coast to Manatí still have to be repaired, he explained.
The line from Aguirre to Bayamón has 13 fallen towers and the one from the South Coast to Manatí has four towers on the ground. "There is definitely viability in terms of being able to bring energy to the metropolitan area," he expressed.
Ricardo Santos, former president of the Electrical Industry and Irrigation Workers Union (UTIER, Spanish acronym) assured that the connection works between the plants of the north and the south are advanced. He stressed, however, that it is a temporary measure. "There will still be weakness," he stated.
Palo Seco, yes or no?
As for the possibility of using for generation the section that is not closed from the Palo Seco plant, Sánchez recalled that PREPA determined to close it after a study conducted by the insurance company.
Sánchez indicated that those events were prior to Hurricane Maria and the USACE must repair everything broken or damaged after the atmospheric event. They concentrate on locating in Palo Seco the generator that already brought Weston Solutions to the Island for $ 53.1 million, and that they expect to have it connected before October 25.
He recalled that the power station in San Juan is operating, but along with Palo Seco it is not enough to supply the demand of the north area. "Although the San Juan plant is operating, it is not fully energized and, whenever they try to increase the demand a little, the plant falls. And that is what this plant (Palo Seco, with the Weston Solutions generator) will provide, stabilization to that as they bring the transmission lines and are energized," he explained.
Padilla reaffirmed PREPA administrative decision not to energize Palo Seco, as it "is not safe" and there is a plan to "replace that voltage without incurring in fundamental security risks."
Santos thought the opposite. "They must do all to put the units one and three of Palo Seco into service," he said and added that, in his opinion, it is "fundamental" to stabilize the electrical system in the metropolitan area.
Citizens and businesses are growing impatient for the lack of electricity is exhausted at a time when the alternatives to restore the service are reduced, both in legal and operational terms.
On the legal front, a large number of the most important decisions of PREPA, such as energy projects through public-private partnerships, will depend on the course of the adjustment of obligations sought by the Board, through Title III of PROMESA.
Last Friday and faced with the precarious situation on the Island, insurers Assured Guaranty and National Public Finance Guarantee (NPFG) decided to leave aside the adversarial process they initiated against PREPA last August 7.
Assured and National, like Syncora Guaranty, asked the court to lift the automatic suspension of litigation that protects PREPA under PROMESA, so that the court would appoint a trustee for the public corporation and proceed with an increase in the electricity rate. This is because, according to PREPA´s bond contract, when the public corporation does not generate enough income, it is obliged to raise the electricity bill in order to pay bondholders and, in turn, to remit the incomes that apply to reserve accounts to pay bondholders.
"We urge the Board and PREPA to take this opportunity to work collaboratively with the creditors, as we did before, to produce a comprehensive rebuilding plan to ensure that electricity is restored in Puerto Rico as soon as possible and PREPA to proceed with a long-term development plan that can be worked out in consensus with all stakeholders," indicated Assured Chief Executive Officer Dominic Frederico.
"Although we have strong legal rights and believe that PREPA is required to send the pledged revenues to the debt trustee, we also believe that it would be inappropriate to continue litigating this issue while PREPA is totally immersed in efforts to restore electricity throughout the Island," said Bill Fallon, chief executive officer of NFPG.
The withdrawal of both lawsuits gives PREPA some relief, but does not mean more revenue for the public utility.
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