RFA-18-0001 - In the Matter of Commonwealth Oil Refining Company, Inc./Commonwealth of Puerto Rico

You are here

On May 23, 2018, OHA denied a request from the Commonwealth of Puerto Rico (Puerto Rico) to distribute funds it holds in trust arising from various settlement agreements entered into by the DOE with Commonwealth Oil Refining Company, Inc. (Corco). Puerto Rico submitted to DOE a Request for Authorization to spend approximately $1.08 million of its Corco funds pursuant to a Distribution Plan. The Corco funds are required to be spent in accordance with priorities set forth in a refund distribution agreement entered into pursuant to litigation concerning the crude oil price regulations. The Distribution Plan proposed to spend Puerto Rico's Corco funds to build an energy-focused educational complex, the Energy Pavilion, in Bayamon, Puerto Rico. The Energy Pavilion would also support a research center to use technology to increase energy efficiency on Puerto Rico. After examining the proposed Energy Pavilion project, Puerto Rico asserted that the Energy Pavilion itself would change energy consumption habits for future generations and that it would reduce dependence on fossil fuel-based energy consumption through increased use of renewable energy sources and decreased energy demand. However, OHA determined that it was unclear how the funds used to construct the Pavilion would flow to Puerto Rico's energy customers and that the cost savings attributable to the Energy Pavilion were meager in comparison to the investment. In this regard, OHA estimated that it would take nearly 35 years for Puerto Ricans to realize savings equivalent to the cost of the construction of the Energy Pavilion from Corco funds. OHA also found that the proposed energy research center would focus on long-term energy plans and policies and would not have a significant impact on reducing Puerto Rico's dependence on fossil fuels in the foreseeable future. Consequently, OHA denied Puerto Rico's request to spend its Corco funds pursuant to the Distribution Plan. OHA Case No. RFA-18-0001 (Kristin L. Martin)