The Puerto Rico Electric Power Authority on Friday urged the Federal Energy Regulatory Commission to lift a cap on how much liquefied natural gas can be stored at a facility owned by EcoEléctrica, saying the limit threatens grid stability.
“FERC’s limitation of the fuel level of the EcoEléctrica LNG storage tank places the Island’s reserve margins and stability at risk,” Josué Colón-Ortiz, PREPA executive director, said in a letter to FERC.
The cap imposed by FERC could cost PREPA more than $250 million this year if it must continue burning Bunker C fuel oil at its 820-MW Costa Sur power plant instead of gas supplied by EcoEléctrica, Colón-Ortiz said.
EcoEléctrica’s LNG terminal supplies gas to the company’s 540-MW Penuelas power plant and to PREPA’s Costa Sur plant. The power plants produce about 40% of Puerto Rico’s electricity, according to PREPA.
After earthquakes with epicenters near EcoEléctrica’s LNG terminal hit Puerto Rico in late 2019 and early 2020, FERC ordered the company to not fill its storage facility above 63 feet, a level that represents about 60% of its capacity, while analysis was done on the structure to make sure it was safe. In April, FERC rejected EcoEléctrica’s request to raise the storage level to 91 feet, saying the company failed to show the storage facility could withstand severe earthquakes.
EcoEléctrica’s LNG supply is of “utmost importance” for Puerto Rico’s electric system, in part because the power plants the storage facility serves provide baseload power and ancillary services that help maintain the island’s grid, according to Colón-Ortiz.
Further, when Hurricane Fiona damaged EcoEléctrica’s LNG supply terminal last month, the Penuelas and Costa Sur power plants weren’t able to fully run on gas while the terminal was being repaired, according to Colón-Ortiz. As a result, PREPA’s ability to supply power was limited, and it was forced to use more expensive diesel fuel in its plant, he said.
“In the final balance of interests, the possible (not probable) risks are overwhelmingly outweighed by the fact that, considerably reducing the fuel storage limitations will allow both Costa Sur and EcoEléctrica to comply with emission regulations, maximize electricity production, provide much-needed frequency regulation for the system’s stability, and minimize costs to the people of Puerto Rico,” Colón-Ortiz said in the letter.
EcoEléctrica on Friday filed a confidential report at FERC analyzing the LNG storage facility’s ability to withstand earthquakes. Since April, EcoEléctrica has submitted six reports evaluating various aspects of the storage facility’s structure.
FERC is keeping a close eye on conditions in Puerto Rico following the hurricane, according to Celeste Miller, an agency spokesperson. The commission plans to respond to PREPA “in due course,” she said Monday.
