PDP: Documents reveal irregularities in Genera contract redo

By The Star Staff

The Popular Democratic Party (PDP) Senate delegation publicly released official data Tuesday concerning the renegotiation of the Genera contract by the administration of Gov. Jenniffer González Colón.

A petition made by the delegation and addressed to Josué Colón Ortiz, the executive director of the Public-Private Partnerships Authority, sought the state’s contract with Genera, as well as any amended agreements. Additionally, the PDP requested documents related to the renegotiation process, communications exchanged between the commonwealth government and the Puerto Rico Energy Bureau (PREB), and any letters or evidence indicating that the government had informed LUMA Energy about breaches of contractual clauses.

“The administration of Jenniffer González publicly claims that the renegotiation of this contract was initiated by her administration. That is false and demonstrates the governor’s duplicity,” the PDP senators said. “According to a confidential report prepared by FTI Consulting, it appears that Genera itself initiated the renegotiation because the original contract was not cost-effective for them. They found it more beneficial to have a fixed payment of $110 million, and the State Government acquiesced.”

In addition to the complaint, the PDP delegation called on González Colón administration to publicly release the FTI report, which was paid for with public funds. An ongoing motion filed by the Institute of Competitiveness and Economic Sustainability demands that the PREB order the publication of the report, but no decision has been made thus far.

Furthermore, the minority legislators noted, with the renegotiation of Genera’s contract, potential incentive payments that the company could have received were eliminated in exchange for a fixed payment of $110 million for the duration of the contract. Alternate minority leader Marially González Huertas, a senator from the district of Ponce, noted, “This amendment removed the ‘Decommissioning Incentive,’ which would have compelled Genera to modernize the country’s energy system.”

“The government of Jenniffer González opted to grant $110 million to Genera instead of investing in the modernization of our generation infrastructure,” she said.

Sen. Josian Santiago Rivera highlighted another concern regarding the renegotiation of the Genera contract. By eliminating the incentive payments or bonuses, he said, the requirement for Genera to achieve fuel savings was also removed.

“What does this mean?” Santiago asked. “Under the original contract, if Genera achieved fuel savings, they would present a ‘Fuel Optimization Plan’ that could lead to compensation for those savings, directly benefiting consumers. Now, with the fixed payment of $110 million, Genera profits regardless of whether they save fuel.”

Sen. Ada Álvarez Conde raised a fourth point, questioning the source of funds for the fixed payment of $110 million.

“The governor has not publicly disclosed where this money will come from,” she said. “On March 27, she claimed it would not come from a rate increase. However, just six days earlier, on March 21, the State Government informed the Energy Bureau that $70 million (63.64%) of the $110 million for Genera’s fixed payment would come from future reconciliations of the ‘Fuel Charge Adjustment (FCA).’ This effectively means an adjustment to consumer bills that will begin to impact them as early as July of this year.”

The “FCA Clause” adjusts the fuel charge for consumers.

Former Senate President José Luis Dalmau Santiago noted that: “Fifth, the State Government has sent multiple letters to LUMA Energy regarding various issues, including non-compliance with federal contracting regulations, a lack of cooperation with audits, and obstruction of the Office of the Comptroller during their audits.”

“However, no formal accusations have been made against the company, despite the fact that on February 18, 2025, the Senate sent a letter to Josué Colón mentioning that the company had claimed to clear 16,000 miles of power lines but had only managed to clear 72 miles at a total cost of $12.”