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Puerto Rico P3 Authority Advances Utility O&M Procurement

Duke, Exelon among proponents

Puerto Rico’s Public-Private Partnership Authority will in 3Q19 choose a private-sector partner to manage and operate the commonwealth’s electricity transmission and distribution system.

The authority has identified four proponents for the project. They are:

  • Duke Energy
  • Exelon
  • PSEG Services Corporation
  • Quanta Consortium (Atco Ltd., IEM, and Quanta Services)

“The Transmission and Distribution P3 Project is one of great impact, which will allow the modernization of Puerto Rico’s energy system,” Executive Director Omar Marrero said in a statement.

The Puerto Rico Electric Power Authority (PREPA) is the sole provider of electricity for 1.5 million residents. According to its website, the utility’s assets include 2,478 miles of transmission lines; 31,485 miles of distribution lines; 279 38kV substations; and 175 transmission centers.

PREPA has been working to transform its grid, as well as add additional functionality since Hurricanes Irma and Maria devastated the island in 2017. As part of that effort, the utility seeks to diversify its energy resources, establish smart grid technologies, and maximize the use of advanced technology.

Notably, the commonwealth’s aging transmission and distribution system had, according to PREPA, been impacted by a lag in technological upgrades before the hurricanes struck. PREPA in a statement noted that the damage exacerbated existing problems, in addition to creating new ones.

The private partner is expected to ameliorate many of those problems by making system improvements, such as integrating and renewable generation and distributed energy sources. However, some market sources say that the commonwealth’s management of its ongoing debt crisis will be a factor in the utility’s success.

“Puerto Rico’s fiscal health is still the 800-pound gorilla in the room,” one prominent source said. “You have to figure out how to outsource when you have such an overarching fiscal problem.”

The commonwealth as of 2018 had a total $120 billion in debt and pension fund obligations.

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