1. Puerto Rico Electric System Challenges Ahead
Presented by:
Tomás J. Torres, MPL, PE, LPP
March 21, 2019

2. Our Current Electrical System
Reliability and Financial Indicators
New Paradigm
Current IRP Proposal Challenges
The Future

3. The ICSE-PR is a 501(c)(3) non-profit, action-oriented organization incorporated in We plan and execute educational activities, create alliances and coordinate changes that foster the socio-economic wellbeing of Puerto Rico.

4. PREPA’s Distribution System
Approximately:
31,550 circuit miles of distribution lines
333 Substations
Legend:
Substations
4.16 KV Circuits
8.32 KV Circuits
13.2 KV Circuits
Source: Consulting Engineer Report, June, 2013; PR Energy Bureau, Sistema Distrubución de la AEE, September 2015

5. Transmission System approx. 2,478 circuit miles of lines:
375 circuit miles of 230 kV
727 circuit miles of 115 kV and 1,376 circuit miles of 38 kV (not shown).
Source: Consulting Engineer Report, June, 2013

6. PREPA’s Generation Fleet
Generating capacity (MW):
2,892 MW Steam-plants
1,032 MW of Combined-cycle
846 MW of Comb.-Turbines
454 MW AES
507 MW EcoEléctrica
8 MW of diesel capacity,
105 MW of Hydroelectric and
200 MW Solar & Wind (not
shown) . s c G s c G
Source: Consulting Engineer Report, June, 2013; FY 2017 Rate Review, PREC.; and IRP filing

7. Reliability Metrics Prior to Hurricane Maria:
System Average Interruption Frequency Index (SAIFI) per year. One Interruption per month.
System Average Interruption Duration Index (SAIDI)- Approx.16 hours per year, 16 hours without power a year.
Customer Average Interruption Duration Index (CAIDI) – Approx minutes per in July 2016 – Power outage average duration of 3 hours.
American Public Power Association, (APPA) National Values:
SAIFI – per year
SAIDI minutes
CAIDI minutes
After Hurricane Maria PR reliability metrics do not fit in national standards
SAIFI – 365 per year ?
Source: FY 2017 Rate Review; American Public Power Association 2015 Distribution System Reliability & Operations Survey .

8. American Public Power Association, (APPA) National Values:
Weighted Mean
Median
Edison Electric Institute Values:
Long-term debt industry’s aggregate total capitalization %
Financial Metrics
Prior to Hurricane María - PREPA Debt to Total Assets ratio reflected insolvency:
2014 PREPA’s Financial Statement :
Total Assets – $10.3 Billion
Capital Assets - $6.8 Billion ratio
Debt: $9.4 Billion
Debt to Total Assets: 0.91.
Using Capital Assets, Debt to Assets:
Debt to Asset Ratio of 1 reflects insolvency.
2017 Values, prior to hurricanes:
Capital Assets estimated on $5 Billion
Debt to Capital Asset was Approx. 2.
After Assets approached 0.
Source: FY 2017 Rate Review; APPA 2018 Financial and Operating Ratios of Public Power Utilities; EEI 2017 Financial Review .

9. Electric System Reconstruction Costs
Overhead and Underground Distribution:
$5,303 Millions
Overhead and Underground Transmission:
$4,900 Millions
Substations 38KV, 115KV, and 230 KV:
$1,668 Millions
Total T&D ONLY:
$11,871 Millions
Source: Build Back Better, 2017, New York Power Authority at al. Pictures by C. Torres

10. Current Model Needs to Change
Transmission Costs:
Mostly Fixed Costs
Distribution Costs:
Mostly Fixed Costs
Generation Costs:
Fixed Costs
Variable costs

11. Prosumers and Microgrids Prosumers and Microgrids
A New Model is Needed
Multiple Flows of Energy
Low Marginal Cost Form Renewables
Prosumers
and Microgrids
Prosumers and Microgrids
Multiple Supply Sources

12. A New Model is Needed
New Puerto Rico Energy Policy, Senate Bill 1121, set the basis for a new model.
Conference Committee Report issued on March 14, 2019 and approve that day by the Puerto Rico Senate. House of Representatives vote scheduled for Tuesday March 19, 2019.
Provides additional resources and budget to the regulator.
Includes statutory requirements to implement energy efficiency and demand-response programs.
Requires the development of energy storage systems, expedited interconnection process for microgrids and net-metering clients.
Redefines the electrical system considering the generation of energy at the distribution grid by electricity consumers (prosumers).
Establishes a gradual increase in the Renewable Energy from 20% in 2025, to 50% in 2040, to a 100% in 2050.

13. Challenges – IRP Proposal
Planning Period; The IRP shall consider a planning period of twenty (20) years.
Filing: Proposed IRP was submitted by PREPA on February 13, 2019
Filing Compliance: On March 16 the Energy Bureau determined that the proposed IRP is not in compliance with Regulation 9021 and ordered PREPA to correct the deficiencies and to refile within 30 days. .
Intervention: Any person may file a petition to intervene in the IRP proceeding within thirty (30) days after the Commission's determination that the proposed IRP is complete.

14. Total Investments in Gas Infrastructure
Challenges – IRP Proposal
Total Investments in Gas Infrastructure
$1,047 Millions
Pus Related Generation in Palo Seco, Mayaguez and Yabucoa

15. 2018 Integrated Resource Plan Appendix 1: Transmission and
Distribution
Designated as Confidential
Contains Critical Energy Infrastructure Information
Sources: PREPA Integrated Resources Plan, Filed to the PR Enegy Bureau 15

16. ¢23 to ¢ 25KWH Challenges – IRP Proposal
Cost of electricity 23 to 25 Cents per KWH: Projected cost of electricity within the plan twenty year period.
Generation Portfolios S4S2 and EMS
¢23 to ¢ 25KWH
Electricity Rates as: proposed on
IRP period:
Low Level ¢23/KWH
High Level ¢25/KWH
PV Solar for Residential Customers
Levelized Cost ¢15.3 /KWH
Debt Surcharge ¢5.7 /KWH 16
Sources: PREPA Integrated Resources Plan, Filed to the PR Enegy Bureau

17. The Future is Now
Puerto Rico needs to transform its electric system. This involves building a modern grid, a grid that can support multiple power flow, and the improvement of related regulatory institutions.
Main challenges rest on the implementation of legal and regulatory energy framework.