Osvaldo Carlo Linares’ remarks were made after the Oversight Board flagged irregularities
As the Financial Oversight and Management Board weighs revoking its approval of PREPA’s $5.8 billion temporary generation contract, Third‑Party Procurement Office (3PPO) President Osvaldo Carlo Linares is publicly pushing back, offering his own account of the controversy that has engulfed the project and triggered a formal review.
In a detailed social‑media post, Carlo Linares said recent claims about irregularities in the contract awarded by PREPA have circulated “without context,” creating confusion about a procurement he argues was both transparent and constrained by Puerto Rico’s dire need for emergency generation. His remarks come days after Enchanted Rock, the Texas‑based microgrid developer whose participation helped secure the Financial Oversight and Management Board’s (FOMB) approval, told the Board that its name and signature were used “without our authorization” in the procurement.
That allegation has shaken the foundation of the deal. In an August 7 letter, the FOMB warned that it is “reviewing all of its options, including revoking its approval of the Contract and making a referral to the relevant authorities,” citing both the signature dispute and the project’s lack of progress 57 days into the deployment window. PREPA has confirmed that no milestones have been met, the required $1.18 billion performance bond has not been delivered, and the seller has already requested an extension, which PREPA denied.
Carlo Linares, however, insists the procurement unfolded under extraordinary conditions. He explained that Puerto Rico’s emergency‑generation deficit forced PREB to order a solicitation with highly unusual terms: no minimum‑use guarantees and payment only for energy consumed. “The proponent was forced to make a ‘billion’ investment without being guaranteed a minimum of use,” he wrote, arguing that such a business model “doesn’t exist anywhere else in the world.”
According to Carlo Linares, only three companies, Power Expectations, Gotham, and Javelin, were willing to negotiate under those constraints. Javelin was eliminated for demanding guarantees; Gotham for proposing a barge in an environmentally sensitive area. Power Expectations, he said, was the only bidder able to meet all requirements, including a price per kilowatt-hour equal to or lower than what consumers already paid.
Carlo Linares also defended the consortium structure that originally included Enchanted Rock. He said Power Expectations had a representation agreement allowing it to sign contracts on Enchanted Rock’s behalf in Puerto Rico, and that PREPA received a corporate resolution identifying the authorized signatory. “The contract with PREPA was signed… using the electronic signature program known as ‘Docusign’,” he wrote.
The dispute, he said, emerged only after Enchanted Rock reorganized under a new parent entity, “E Rock,” and later questioned whether the consortium still had authority to sign. Carlo Linares described the matter as a legal disagreement between private companies; one he believes is now moot because Enchanted Rock is no longer part of the contract. Power Expectations invoked an assignment clause and substituted Flotek Industries, a Texas‑based public company that PREPA vetted and approved.
Carlo Linares’ account stands in sharp contrast to the Oversight Board’s position. The Board has emphasized that Enchanted Rock’s participation was a critical factor in assessing the consortium’s technical and financial capacity. Without it, the remaining entities lacked experience in utility-scale generation and had limited financial strength. A 3PPO analysis from August 2025 found that Power Expectations “did not provide adequate evidence of organizational or financial strength to sustain a ten-year contract valued at up to $5.8 billion.”
The Board also noted that the project has made no meaningful progress at the Aguirre power plant, where the 400 MW units were supposed to be installed, and that key contractual obligations, including the performance bond and milestone reports, remain unfulfilled.
