Oversight Board Clears Power Expectations Contract After Imposing Strict Revisions

Company Expected to Sign by Next Week

The consortium selected to deliver 400 megawatts of temporary power generation at the Aguirre Power Plant—Power Expectations, LLC; Enchanted Rock; and Reyes Contractor, LLC—has cleared the final hurdle set by the Financial Oversight and Management Board after incorporating a series of stringent conditions related to project execution, performance guarantees, and fuel structure.

In a June 2 letter to PREPA General Counsel Alexis Rivera Medina, the Board confirmed that the final contract submitted on May 29 satisfies all revisions required as part of its conditional approval issued earlier in the month.

PREPA Executive Director Mary Zapata placed the development in the broader context of the emergency procurement effort launched last year. She noted that the Independent Third-Party Procurement Office “managed to negotiate contracts with Power Expectations… to install 400 megawatts of emergency generation at the Aguirre plant, and with the company Gothams Energy for 200 megawatts at the San Juan plant.”

Zapata explained that the Puerto Rico Energy Bureau approved the Power Expectations contract in November 2025 and the Gothams Energy contract in January 2026. PREPA then submitted both agreements to the Oversight Board for review in January and February of this year. After a round of information requests, the Board issued conditional approval for both contracts on May 8, contingent on the government implementing several revisions.

Those revisions were substantial. The Board required the sellers to meet an accelerated deployment schedule supported by a detailed project timeline, enforceable milestones, and weekly and bi‑weekly reporting obligations through the Commercial Operation Date. The revised contract now includes liquidated damages for deployment delays, termination rights if commercial operation is not achieved, and clearly defined procedures for schedule relief. The Board also aligned Force Majeure provisions with these obligations to ensure PREPA can enforce the deployment requirements.

Performance security was another central concern. The updated agreement incorporates a defined Performance Bond structure that applies both before and after commercial operation. It ties the bond directly to deployment obligations, operational performance requirements, liquidated damages, and termination remedies. According to the Board, these mechanisms strengthen PREPA’s ability to respond if the sellers fail to meet their commitments.

Fuel structure was the third pillar of the Board’s conditions. The revised contract requires the sellers, as a condition precedent to commercial operation, to demonstrate that all liquefied natural gas procurement, transportation, storage, regasification infrastructure, supply arrangements, and operational permits are fully in place. LNG is established as the primary fuel source, with diesel operation limited to narrowly defined circumstances, such as LNG supply disruptions due to Force Majeure, a seller fuel default, or declared grid emergencies. The contract also sets a fixed operational rate of 16 cents per kilowatt-hour, excluding fuel and other pass-through charges, to reduce uncertainty in cost allocation.

Zapata confirmed that PREPA incorporated all required revisions and resubmitted the updated documents to the Oversight Board, which this week approved the contract with Power Expectations.  She added that PREPA is now waiting for the company’s representatives to sign the agreement so the execution process can be completed, including PREPA’s signature and filing with the Office of the Comptroller. The Gothams Energy contract, she said, continues under the revision of the Oversight Board.