The fallout from the collapse of the Power Expectations contract is not just costing Puerto Rico 400 megawatts of temporary power. It is pushing back, by years, the timeline for solving the island’s broader power crisis.
The scandal has frozen the two procurements, up to 3,000 MW of new flexible generation and another 600 MW to replace Costa Sur’s oldest units, that Puerto Rico was counting on to finally retire its aging, failure-prone fleet and usher in a state-of-the-art energy infrastructure.
The Financial Oversight and Management Board is refusing to let either procurement advance until the government answers questions about feasibility, cost and governance that it first posed more than a month ago, a level of scrutiny the Board says the forged-signature scandal made unavoidable. The next major new generation isn’t expected online before 2031, but that will fall way short of the 5,500 MW industry experts assure is needed for long-term stability.
The same scandal has already forced a separate reassessment of how much temporary generation Puerto Rico still needs now that Power Expectations’ 400 MW has vanished from the table, a process Caribbean Business detailed this week.
This story is about the bigger question sitting behind it: what happens to the island’s aging generation fleet while its two largest planned procurement processes sit in regulatory limbo.
Why the 3,000 MW and 600 MW procurements matter so much
The stakes are hard to overstate. Puerto Rico’s generation fleet is, on average, 50 to 70 years old, and outages tied to breakdowns in that aging fleet have become a near-daily occurrence even after more than a year of repairs Genera PR has described as ahead of schedule.
The 5,500 MW goal to meet demand and maintain adequate reserves is a far higher bar than most U.S. states must clear, since the island’s grid cannot lean on neighboring systems the way mainland utilities do when a plant trips offline.
The 3,000 MW flexible-generation procurement, first put to the market in October 2025, and the 600 MW Costa Sur project, split off into its own procurement track in February 2026 because of strong developer interest, were designed to give PREPA and Genera the new capacity needed to finally retire the oldest, least efficient units, the two Costa Sur units alone date to 1972 and 1973, without leaving the island short of power in the process.
Until those procurements move, Puerto Rico’s near-term relief options are thin, and may be getting thinner. Energiza, a smaller gas-fired project contracted in December 2024 for what has since grown from 478 MW to 560 MW, was already working through its own lengthy approval process, more than 21 months and counting, before the government launched the much larger 3,000 MW competitive procurement last fall.
On the record, the project continues to move: PREB approved a capacity increase in September 2025, and a further contract amendment was still under Oversight Board review as of January 2026.
But according to people familiar with the process, industry executives increasingly believe the plant will not be built, citing siting and other obstacles they describe as disqualifying. Caribbean Business could not independently confirm that assessment on the record, but if it proves accurate, the loss of another 500-plus megawatts already built into Puerto Rico’s generation planning would make an already difficult supply picture considerably worse.
The two other large projects furthest along are not expected to add power until 2031 at the earliest: a natural-gas plant PREPA is negotiating with AES to replace its 510 MW coal-fired units in Guayama, projected at up to 700 MW, and Project Hostos, a $2.5 billion, 500-700 MW gas plant in the Dominican Republic that would send power to Puerto Rico through a new submarine cable.
Combined, those two projects would add roughly 1,200 MW, well short of the 3,600 MW now stuck in regulatory limbo, let alone the up to 5,500 MW some experts say the island ultimately needs, and residents and businesses would have to wait until 2031 or 2032 to see any of it.
The Board’s scrutiny, and what it’s demanding
In a sharply worded August 20 letter to Energy Czar Josué Colón, the FOMB said it has yet to receive answers to critical questions it first posed more than a month ago about the structure, feasibility, and governance of the two procurements. The Board warned that without those answers, it cannot fulfill its legal obligation under PROMESA to ensure that contracts are competitive, fiscally sound, and capable of execution.
The heightened vigilance comes directly in response to the Power Expectations scandal, which the Board said revealed “serious concerns regarding the adequacy of the due diligence efforts conducted and the verification of the selected proponents’ qualifications.”
The Board said it has been waiting 33 days for answers to its July 17 request for information, which sought clarity on port access, fuel logistics, permitting, interconnection, qualification criteria, project costs, deliverability, and ratepayer affordability. Without those answers, the Board warned, competition could be limited, execution risk could rise, and ratepayers could face higher costs.
“No final selection or award should proceed,” the Board wrote, “until P3A (the Public-Private Partnership Authority) provides the requested information and the Oversight Board has had an opportunity to evaluate the responses.” “Urgency does not diminish the need for the procurements to be conducted competitively and transparently,” the Board added.
How the Power Expectations contract unraveled
The Board revoked approval of the $5.9 billion temporary-generation contract on August 14 after Enchanted Rock, whose participation was essential to the consortium’s qualification, alerted the government that its name and signature had been used without authorization. PREPA was ordered to terminate the contract, federal authorities were notified, and the island’s only contracted temporary-generation project, 400 MW meant to stabilize the grid while repairs caught up, vanished overnight.
The Board’s August 17 and 18 letters detailed how the procurement unraveled. Power Expectations and Reyes Contractor lacked the utility-scale experience and financial capacity to qualify on their own, the Board said, making Enchanted Rock’s participation the sole basis for the consortium’s qualification. Power Expectations also transferred Enchanted Rock’s interest to Flotek Industries just two days after the contract was executed, without PREPA’s consent or notice to the Board; PREPA did not learn of the assignment until July 9 and approved it July 31, still unaware that Enchanted Rock had raised forgery concerns weeks earlier. The required $1.18 billion performance bond was never delivered, and no contractual milestones had been met, the Board said, calling the procurement “fundamentally flawed.”
The Third-Party Procurement Office and Power Expectations both pushed back in separate letters, arguing Power Expectations was never given a chance to respond before the Board revoked approval and demanding disclosure of the administrative record. The Board dismissed those objections, saying its decision did not depend on adjudicating the fraud allegations: it revoked approval because the factual basis for its original approval, Enchanted Rock’s participation, no longer existed.
What happens next
Governor Jenniffer González has said she will convene a meeting with the stakeholders involved in the scandal to review firsthand the events that led to the contract’s cancellation, though no date has been announced. For an island still waiting on its next major source of power, how quickly that review, and the Oversight Board’s stalled procurements, move forward may determine how many more years Puerto Rico spends running its power system on plants built decades before most of its residents were born.
