• Tom King

The Puerto Rico Energy Bureau (New Name) Asks for Help

Updated: Aug 29, 2018

Thomas King

President & Founding Director

Borincana Foundation Inc.

August 25, 2018

Hato Rey August 10, 2018

We have spent quite a few hours over the last week plus pouring through the questions released by the Puerto Rico Energy Board (newly renamed and weakened in a government reshuffle) in search of public comment on retail wheeling. The questions are disorganized, lacking in context, and display overall a distinct lack of confidence in the direction of either retail wheeling or the future of the market. All of the Commissioners are serious, dedicated public servants, but none of them have held these positions for more than a few months. This is less a request for comment and more a cry for help.

Nevertheless, we laud the determination of the Commissioners to seek public comment on the potential shape of the market and regulation of retail wheeling. We believe that sending a transparent and reasonable signal to the market regarding not only future rules, but also process, in advance of finalizing the same is a worthwhile undertaking that may support market transformation and economic recovery. We will be providing summary responses and recommendations in that spirit.

This request for public comment raises some questions:

· Why now? The Commission has had the obligation to promulgate regulations for retail wheeling since it was first established in 2014. This effort to review and promulgate regulations for retail wheeling would appear to be conflated with open questions as to the future of market design. With the legislature taking up the effort in a few months to meet self-imposed deadlines, wouldn’t it be better to wait for the context this effort will provide?

· Why so fast? We question the haste with which this comment period has been undertaken. We strongly believe the public should have between 60 - 90 days, not 20. Is this just an effort to get PREPA on record? Given the exceedingly short time allowed, our comments will represent primarily our expertise and direct experiences, will not reflect substantive research on the issues, and will not benefit from the refinement that comes from the ability to collaborate and exchange ideas with peers.

· What are the Commissioners thoughts about wheeling and market design? We don’t really know because no context is provided but there are other clues. The nature of some questions reveals instances of a top-down, command-and-control utility market perspective that may prove a significant impediment to an efficient and successful transformation of the energy market. And what does it suggest that the underlying assumption of one question is that PREPA’s successors would not be competitive in an open market? Another question asks what can be done to level the playing field so distributed resources can compete with traditional generation. Have they not been paying attention?

We hope that there will be a next phase to this effort and that the Commission will provide a more extended period of time for review and response and that it will lay out a framework for its vision of the future market and regulation at that time to provide necessary context.

Despite considerable active involvement from smart, experienced, helpful sources like the SSEB, SEPA, and RMI, Puerto Rico’s government, utility, and regulator are neither efficiently coordinating guidance nor are they getting enough of what they need. Moreover, Puerto Rico needs to add a voice now with experience of privatization and a clear understanding of the importance of transparent, reliable, supportive, and dynamic regulatory systems to underpin the value of private sector investment. Without it there is no trust in the system or the future, and without trust in the system and belief in the future there is nothing for the private sector to invest in.

Puerto Rico needs more thoughtful, experienced, and independent voices to weigh in on the formulation of regulation and market design for the energy sector - now and continuing indefinitely into the future. The Fundación Borincana is committed to being one of those voices.

Borincana Foundation Inc. (Fundación Borincana)
a Puerto Rican Charitable Organization under Section 1101.01(a)(2) and a U.S. non-profit 501c(3) 
IRS Determination Letter available on request
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