Puerto Rico Energy Bureau rejects supplier pressure upholds fuel cost order
The Puerto Rico Energy Bureau (PREB) has stood firm on its September 30 order regarding fuel cost adjustments, rejecting pressure from the Puerto Rico Electric Power Authority (PREPA) and liquefied natural gas (LNG) supplier NFEnergia LLC (NFE).
PREPA had filed an urgent motion citing an unsigned communication from NFE, which warned of potential disruptions in LNG supply to the San Juan power plant if the PREB did not reverse or modify its September order. The order set fuel and purchased-power adjustment factors for the last quarter of 2026 and initiated an investigation into excess gas nominations and supply deficiencies.
The PREB found that PREPA's motion did not justify revising the existing order. The regulator noted that NFE's communication lacked proper contractual formalities, including a signature, representative identification, and evidence of proper notice under the Multi-Site Agreement. The PREB also rejected NFE's claim that regulators participated in negotiating the contract, calling the assertion incorrect.
The PREB characterized NFE's communication as an improper attempt to condition essential fuel supply on favorable regulatory action, warning that threatening to withhold gas delivery is 'imprudent and incompatible with the responsibility' of a supplier. The regulator emphasized that it will not allow continuity of fuel supply to be used as leverage.
The September order documented $74.5 million in excess nomination costs reported since January 2025 and deferred $17.6 million in incremental costs tied to supply shortfalls. These amounts remain under examination and are not to be passed on to consumers until responsibility is determined.
The PREB ordered PREPA to comply fully with the September 30 directives and warned that violations could result in administrative fines of up to $250,000 per infraction. The regulator also signaled it may consider additional measures, including those affecting contractual relationships, depending on the results of ongoing investigations.