The Puerto Rico Electric Power Authority moved a step closer Thursday to opening an important natural gas port that would lower its operating costs.
The Federal Energy Regulatory Commission released a draft environmental impact statement for PREPA's proposed Aguirre Offshore Gasport Project. The opening of this gas port off the southeast coast and the conversion of the nearby Aguirre power plant to natural gas from oil are the authority's two most important near-term capital projects, the authority leadership has said.
The authority is attempting to switch from oil to gas as fast as possible because gas is a much cheaper way of generating electricity.
PREPA owes roughly $8.7 billion in bonds. It is in the midst of a financial crisis partly triggered by rising oil prices. Some analysts think that it may turn to a recently passed Puerto Rico public corporation restructuring law to restructure its debt in the next few months.
In the EIS, FERC environmental staff found that the implementation of the proposed mitigation steps would reduce the environmental impacts to "less-than-significant levels."
The port is proposed for three miles off the coast of Puerto Rico, near Salinas and Guayama. Also part of the proposal is a 4.1 mile long subsea pipeline connecting the gas port to the Aguirre plant. The port would also include a floating storage and regasification unit moored at the gas port on a semi-permanent basis.
FERC will take public comments on the EIS until Sept. 29, said FERC spokeswoman Celeste Miller. FERC staff will then revise the EIS based on the public comments and present a final EIS to FERC commissioners. The commissioners will decide whether to approve the project and if so, what conditions to place on the project.
In December 2013 PREPA president Juan Alicea Flores said the authority planned to complete the gas port by summer 2015 and the conversion of the Aguirre plant to natural gas by April 2015.
In other PREPA news, the Vocero de Puerto Rico website reported that PREPA officials spoke of losses at $267 million, or about $100 million more than projected, at Thursday's PREPA board meeting.
The officials primarily blamed the recent electrical sector reform that was signed in late May. Prior to the reform, PREPA could seek payments for electricity by private enterprises using government facilities. At the board meeting, officials said that some municipal governments rent their facilities to barbershops, television stations, cafes, and other businesses and include the cost of electricity in the rent.
The municipalities have been very slow on paying their own electrical bills.
Another cause of PREPA's increased losses was the termination of agreements to exchange cash or swaps triggered by the lowering of PREPA credit rating, said PREPA official Luis Figueroa, according to Vocero.
