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New York assists with Puerto Rico power grid rebuild plan

A wide-ranging stakeholder group came out with a $17.6 billion plan Tuesday to rebuild and modernize Puerto Rico's power grid after it was devastated by recent hurricanes that involves a shift away from liquid fuels toward gas and renewable energy.

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"I applaud the actions of the Puerto Rico Energy Resiliency Working Group for developing this plan and creating a critical foundation to rebuild and reimagine Puerto Rico's electric power system," Puerto Rico Governor Ricardo Rossello, said in a statement. Rossello was in New York Monday, meeting with New York Governor Andrew Cuomo, among others.

"Governor Cuomo and the people of New York are stepping up yet again to provide unwavering support throughout this difficult recovery process," he added.

With over a million residents from the commonwealth living in New York, the state has the largest Puerto Rican population on the US mainland, according to Hunter College research, which has helped forge a close relationship between the two governments.

"We need to act now to transform the island's power grid and provide the people of Puerto Rico with a modern and reliable electric system," Cuomo said. Currently, more than 450 New York State utilities workers are on the ground in Puerto Rico.

Puerto Rico's 5,840 MW of generation -- connected by 2,478 miles of transmission -- was first hit by Hurricane Irma September 6 and then devastated by Hurricane Maria September 20.

The power grid rebuild plan focuses first on supplying emergency power mostly with diesel generators, then moves from system restoration to grid hardening and finally suggests a design for the future that includes shifting fossil generation to gas, distributed energy resources and microgrids.

Government-owned Puerto Rico Electric Power Authority owns 14 generating facilities, with 47% of its generation fired by fuel oil, 37% from gas, 17% from coal and 2% from renewables.

PREPA has also bought power from a small handful of generating assets owned by other producers.

The Puerto Rico power system sustained a level of destruction that "presents an unprecedented opportunity" to create a power grid that is "hardened, smarter, more efficient, cleaner, and less dependent on fossil fuel imports," according to the "Build Back Better: Reimagining and Strengthening the Power Grid of Puerto Rico" report.


COST ESTIMATES DOMINATED BY TRANSMISSION, DISTRIBUTION


Costs are dominated by the transmission and distribution segments, which together are estimated to cost about $9.6 billion. Generation costs are estimated at $3.2 billion, with 92% of that for the installation of a dual fired F-class turbine at the 602-MW Palo Seco plant and an H-class turbine at the 1,200-MW Aguirre plant. Those plants currently burn residual fuel oil, distillate fuel oil and some gas.

The damage to Palo Seco was so extensive the working group recommends shutting it down or replacing it as described above. The cooling towers at the Aguirre plant experienced significant damage that is "a major driver of the costs to repair," according to the report.

The Punta Lima wind farm was significantly damaged, losing approximately half the turbine blades and sustaining vertical post damage, the report said. The Santa Isabel wind farm was "seemingly intact."

Wind farm repair costs are estimated at $25 million and solar farm repairs at $40 million, which could take approximately nine to 12 months. The cost to deploy microgrids is estimated at a little more than $1 billion and solar installations are recommended for new construction at a cost of $315 million.

The report did not include information on how the grid restoration and modernization efforts might be funded and Governor Cuomo's office did not respond to a request for comment.

Defaulting on $9 billion of debt, PREPA filed for bankruptcy July 2, 2017.

The Puerto Rico Energy Resiliency Working Group consists of PREPA and New York utilities, US government entities, trade groups, research organizations and Navigant Consulting.

--Jared Anderson, jared.anderson@spglobal.com

--Edited by Richard Rubin, richard.rubin@spglobal.com