Oversight Board Chides PREPA for Delays on 400 MW Temporary Generation Contract

The Financial Oversight and Management Board (FOMB) has asked the Puerto Rico Electric Power Authority (PREPA) and the Third‑Party Procurement Office (3PPO about the status of the 400‑megawatt temporary generation project, citing lapsed deadlines and missing compliance reports.

The contract was awarded last year to Power Expectations, LLC; Enchanted Rock; and Reyes Contractor, LLC under an accelerated deployment schedule, but project construction appears to be suffering from delays.

In a July 16 letter to PREPA Executive Director Mary C. Zapata Acosta and 3PPO President Osvaldo Carlo Linares, the FOMB noted that 36 days have elapsed since the June 10 start of the contract term, leaving 114 days in the 150-day deployment window for the emergency project at the Aguirre power plant. The contract was approved on June 2 after PREPA incorporated Board-required revisions, including strengthened milestone enforcement, reporting obligations, performance guarantees, and fuel-structure assurances.

The temporary generation procurement was launched to address an anticipated 700-850 MW shortfall identified by the Puerto Rico Energy Bureau (PREB). The energy regulator ordered PREPA to secure emergency generation to stabilize system reliability, prompting 3PPO to issue the RFP that led to the selection of the Power Expectations consortium.

According to the FOMB, several contractual obligations have already come due, including the delivery of a performance bond equal to 100% of the construction-phase contract value — approximately $1.18 billion — no later than 15 business days after execution. That deadline fell on or about July 1. The Board asked PREPA to confirm whether the bond was delivered on time, whether any extension was requested or granted, and whether PREPA issued a notice of default or a cure notice.

The Board also noted that milestone compliance reports required under Section 2.5 of the contract have not been provided despite prior inquiries. PREPA must submit biweekly reports through day 90 of the deployment period and weekly reports thereafter until commercial operation is achieved.

The expected commercial operation date is November 7, 2026, absent delays or extensions. The Board requested copies of all milestone reports, a breakdown of completed and pending milestones, explanations for any delays, and PREPA’s current estimate for the commercial operation date. It also asked for documentation on interconnection studies, any changes to the seller parties, and confirmation that the executed contract filed with the Comptroller matches the approved version.

PREPA and 3PPO must submit a complete written response with supporting documentation by July 22. The companies did not answer requests for comment.