New Fortress Energy, which began operating Puerto Rico’s power plants after a devastating 2017 hurricane, is now unable to pay its debts.
The New York-based company recently agreed with its creditors to split into two companies—one to operate its assets in Brazil, another to manage its other assets, including those in Puerto Rico.
The company holds a 10-year contract to operate the Puerto Rico Electric Power Authority’s power plants, as well as a seven-year contract to supply the island with natural gas. The company has worked to convert more of Puerto Rico’s power plants to run on gas and faced scrutiny for building an import facility in San Juan without required approvals.
Following a collapse of the Puerto Rico’s electric grid after Hurricane Maria in 2017, many residents and civic groups called for upgrading Puerto Rico’s electric infrastructure with wind and solar power, microgrids, and distributed generation sources. The island’s electric utility instead embarked on a privatization plan that involved handing management of its power plants and transmission lines to energy companies.
New Fortress Energy has proposed increasing the amount of natural gas sold in Puerto Rico by 150 percent by converting six existing oil-fired power plants to run on natural gas, according to the Institute for Energy Economics and Financial Analysis (IEEFA).
In a recent report, however, IEEFA analysts found that the company had overstated current natural gas sales, claiming “current volumes” are 50 trillion British thermal units per year, compared to the 24 trillion British thermal units sold over the last 12 months.