Through the Energy Infrastructure Reinvestment (EIR) project category of the Title 17 Clean Energy Financing Program, the Loan Programs Office (LPO) can finance projects that retool, repower, repurpose, or replace energy infrastructure that has ceased operations or enable operating energy infrastructure to avoid, reduce, utilize, or sequester air pollutants or greenhouse gas emissions.
As required by the Puerto Rico Energy Bureau (PREB)—the electric utility’s regulator—the Puerto Rico Electric Power Authority (PREPA) is currently executing a Procurement Plan to replace its fossil fuel generation assets with renewable energy and battery storage systems in stages and on a set schedule in order to meet the territory’s renewable energy policy targets of 40% by 2025, 60% by 2040 and 100% by 2050. The Procurement Plan consists of a series of consecutive Requests for Proposals (RFP), where each tranche seeks to procure a specific capacity target. At present, PREPA has executed several agreements for eligible technologies under Tranche 1 of the Procurement Plan. Tranche 2 RFP is in progress, and on July 18, 2023, Tranche 3 has opened its bid process. The PREB Independent Coordinator, as PREB’s representative, is in charge of the execution of Tranche 2 and 3. PREB’s RFP for Tranche 2 and 3 can be found at: https://prebrfp.accionpower.com/.
LPO has determined that solar photovoltaic (PV) and battery energy storage systems projects previously contracted under Tranche 1 and renewable energy projects, including solar PV and battery energy storage systems expected to be contracted in Tranches 2 and 3, will be replacing “energy infrastructure” (as defined in section 1706 of Title 17) that has ceased operations in Puerto Rico. This means that these projects meet one of the key eligibility requirements under EIR and are eligible to apply under the EIR program for financing (see p. 11 in the Title 17 Program Guidance for more on eligibility requirements). Such projects must still satisfy other applicable EIR eligibility and application requirements as specified in the Title 17 Program Guidance, including satisfactory due diligence by LPO with respect to the terms of the principal project agreements.
Through EIR, project developers can seek federally backed loans and loan guarantees with low interests for up to 30 years. Unlike the section 1703 program, there is no innovation requirement.
For more information, visit the EIR web page and review the full Title 17 Program Guidance. If you have a project that may be eligible for financing through the EIR project category, please request a no-cost pre-application consultation.
Background and Context
The Puerto Rico Energy Public Policy Act of 2019 (Act 17-2019) modified the territory’s renewable portfolio standard to require 100% renewable energy generation in Puerto Rico by 2050 and prohibited coal-fired energy generation after January 2028.
On August 24, 2020, PREB issued a Final Resolution and Order, docket number CEPR-AP-2018-0001, on the PREPA Integrated Resource Plan (IRP). The IRP outlines the timeline for development of the electric power system, taking into account all reasonable resources needed to meet power demand for electric power services during a 20-year planning horizon. The Final Resolution required the replacement over time of PREPA-owned fossil fueled generation (including oil-fired and gas-fired steam units at Aguirre, San Juan, Palo Seco and Costa Sur) with renewable energy, including solar PV and battery energy storage resources.
In response, PREB required and approved the aforementioned Procurement Plan requiring PREPA to select and award contracts for new renewable energy and energy storage resources in six successive Tranches of RFPs. PREB has been in charge, through the PREB-IC, to select the contracts to be awarded by PREPA for Tranche 2 to Tranche 6. The Procurement Plan calls for awarding contracts for up to 3,750 MW of solar PV or equivalent renewable energy resources, and for up to 1,500 MW of 4-hour battery energy storage systems or equivalent resources.
In February 2022, DOE joined FEMA, the Department of Housing and Urban Development, and the Commonwealth of Puerto Rico in launching the Puerto Rico Grid Resilience and Transitions to 100% Renewable Energy Study (PR100), a 2-year study creating a community-driven and locally tailored roadmap to help Puerto Rico meet its target of 100% renewable electricity, improve power sector resiliency, and increase access to affordable renewable energy on the island. The final study will be published in December 2023.