The FOMB Orders PREPA to Terminate Deal Amid Signature Controversy
The Financial Oversight and Management Board (FOMB) on Friday revoked its approval of the Puerto Rico Electric Power Authority’s (PREPA) $5.9 billion temporary generation contract with Power Expectations, ordering the public utility to terminate the agreement.
The FOMB has also referred the matter to law‑enforcement authorities after determining the procurement had been “irreparably impaired.”
The Board’s decision follows a statement issued on August 7 by ERock Inc., the holding company of Enchanted Rock, asserting that it “is not a party to this power generation project” and that its name and signature were used without authorization in the procurement. Enchanted Rock’s participation had been one of the central factors in the Board’s conditional approval of the 10‑year contract, which called for the deployment, installation, operation and maintenance of 400 megawatts of temporary generation.
According to the Third‑Party Procurement Office (3PPO), Enchanted Rock was the only member of the consortium with the technical expertise and financial capacity to execute a project of this scale. Power Expectations lacked both, and Reyes Contractor did not have utility‑scale generation experience. With Enchanted Rock disavowing involvement, the Board said the procurement could no longer stand.
“The procurement is irreparably impaired,” the Board wrote, noting that the contract no longer complies with its review policy and is therefore void under PROMESA Section 204.
The revocation marks a dramatic turn for a project that was supposed to help stabilize Puerto Rico’s grid following the Puerto Rico Energy Bureau’s 2025 directive to procure between 700 and 850 MW of temporary generation to offset anticipated shortfalls. PREPA signed the Power Expectations contract on June 10, but 66 days later, the Board said “no significant progress has been reported.”
The Board also underscored longstanding concerns about the procurement, including the contract’s price and valuation, the project schedule, and the financial and execution capacity of Power Expectations. Those concerns were raised repeatedly beginning in January, months before the contract was executed. The Board noted that PREPA waited until January 16, 2026—six months after the solicitation closed—to submit the proposed contract for review.
The Oversight Board’s conditional approval on May 8 and final determination on June 2 both reserved the right to re‑evaluate the contract if “any inaccuracies or misrepresentations – whether intentional or not” came to light. ERock’s statement, the Board said, triggered that clause.
The controversy surrounding the contract has been building for weeks. The Public-Private Partnership Authority (P3A) and Energy Czar Josué Colón disclosed that they referred allegations about the contract’s legitimacy to the Puerto Rico Department of Justice and federal authorities on June 16, the same day the law firm O’Neill & Borges, representing Enchanted Rock and the Oversight Board, raised concerns about the signature. Third‑Party Procurement Office director Osvaldo Carlo conducted an internal review and later confirmed that the matter had been referred to federal investigators. Carlo also said he tracked Jhoby Weaks, the individual whose name appears on the contract, to Colorado, but attempts to reach him were unsuccessful. Caribbean Business attempted to contact Weaks at the email address listed in the contract, but the message bounced.
PREPA has since confirmed that Enchanted Rock was replaced by Flotek Industries shortly after execution, but the FOMB said the substitution did not cure the underlying deficiencies. Enchanted Rock’s participation was the basis for determining the consortium’s capacity; without it, the Board said, the procurement record was no longer accurate or complete.
The Board emphasized that it is not taking a position on the dispute between Power Expectations and Enchanted Rock, but rather on the integrity of the procurement record and whether the conditions of approval were met. “This contract no longer complies with the Oversight Board’s review policy,” the Board said, adding that PREPA must now terminate the agreement.
The revocation leaves Puerto Rico without the 400 MW of temporary generation that regulators expected to be in place this year. The Energy Bureau has already ordered LUMA, Genera and PREPA to reconcile conflicting information about the island’s 800 MW emergency‑generation portfolio and produce firm dates for when each block of capacity will be available. With the Power Expectations contract now void, the island’s stabilization plan faces renewed uncertainty at a moment when repeated generation failures have triggered widespread load shedding.
The Oversight Board said it will continue to monitor PREPA’s next steps and expects full compliance with its directive to terminate the contract. Power Expectations did not respond to requests for comment.
