Puerto Rico Electric Power Authority (PREPA) is prepared to serve
an entire island nation. The government-owned utility is the sole
electricity distributor for Puerto Rico, where it serves more
than 1.4 million residential and business customers. PREPA
owns five primarily fossil-fueled power plants that, with private
cogenerators and purchased power, give it nearly 5,840 MW of
generating capacity, and it has about 33,900 miles of
transmission and distribution lines. In order to provide cheaper
options for power production, the Puerto Rican government has
allowed independent power producers to build cogeneration plants on
the island to sell power to PREPA.
PREPA's long-term challenges include declining energy
sales, high oil costs, and high customer rates, among other issues.
It is looking at revenue diversification options and is
increasing its activities to reduce energy theft as a way to cut
To cut costs PREPA is also exploring fuel diversification
strategies. To this end it is engaging independent power producers,
including fossil fuel plant operators, as well as wind farm and
solar power operators, in collaborative efforts. In 2010 PREPA
signed an agreement with Pattern Energy Group in which Pattern will
supply more than 25,000 homes on the island with wind-generated
power beginning in 2012. Once operational, the wind farm will be
the largest in Puerto Rico.
It is also building the Via Verde Pipeline to supply natural
gas from north to south Puerto Rico. Switching power plants
from expensive fuel oil to cheaper natural gas will save
PREPA money in the long-term, but the pipeline itself will
cost $74 million to complete. The overall infrastructure upgrade
will cost $450 million, including the conversion of oil-fired
power plants to natural gas.
In 2011 PREPA reported an increase in revenues due to the
passing on of a portion of its higher-fuel costs to its customers,
while higher fuel costs drove up its operating loss.
Founded in 1941, PREPA is directed by a board of nine members,
seven appointed by the Governor, and two elected by and
representing clients. The utility operates 35 client service
offices and 29 technical services offices.
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