Puerto Rico privatized its electricity production on Wednesday, selecting Genera PR to take over the operation and maintenance of state power generation units in the U.S. territory as part of an initial $22.5 million annual contract.
Genera PR is a subsidiary of New York-based New Fortress Energy, which works closely with Shell Oil and other oil and gas producers. Genera also will handle contracts related to fuel purchases for the island's 12 power facilities as part of a 10-year contract with Puerto Rico's government. "Decades of mismanagement and neglect have left Puerto Rico with an expensive, inefficient and dated energy system," said a federal control board that oversees Puerto Rico's finances, in a statement supporting the contract awarded to Genera PR.
The company will receive $22.5 million annually for the first five years of the contract, a payment that will drop as Puerto Rico permanently shutters generation units amid a push for more renewable energy sources. Genera PR also will receive up to $15 million during a transition period of 100 days, and up to $100 million a year in incentives, a payment that also will drop as units are shut down.
"While we recognize the challenges that are before us...we believe the opportunities here...are tremendous," Edens said. He said such contracts normally are done with broad citizen participation "given the impact it will have on all sectors that make up public interest." He also noted that Genera PR will have monopoly power as the sole provider of electricity on the island.