Puerto Rico government and EPA agree to amend AES contract behind closed doors

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Javier Quintana, PREPA's executive director

Photo by: Alberto Bartolomei

On a summer day in 2015, the elevator doors at the headquarters of the Puerto Rico Electric and Power Authority (PREPA) in Santurce opened.

Off the elevator walked out Manuel Mata, President of AES Puerto Rico, a company that since 2002 has sold 454 Megawatts of electricity to the public corporation derived from its coal fuel plant in Guayama. The annual invoice for the deal exceeds $300 million.

Without attracting attention and protected from public scrutiny, Mata walked up to the executive offices and signed a legal document.

Senator Ramón Luis Nieves, Manuel Mata, president of AES, and Eduardo Bhatia, President of the Senate of Puerto Rico

Photo by: Energy and Water Resources Committee

Senator Ramón Luis Nieves, Manuel Mata, president of AES, and Eduardo Bhatia, president of the Senate of Puerto Rico

It dealt with an amendment in the contract made between the multinational company and PREPA: a clause that prohibited the company from disposing its waste derived from the burning of the coal on any part of the island.

A few days later, on July 17, 2015, the agreement was completed. Once signed by Carlos Castro Montalvo, the former Interim Director of PREPA, the rules of the game changed.  This action allowed for the disposal of millions of tons of toxic waste in garbage landfills on the island and paved the way for AES to save millions of dollars because it would not be forced to export the coal ashes as it had promised PREPA on October 11, 1994.

The approved amendment did not represent any tangible benefit for the 1.4 million clients billed by PREPA. Neither did it benefit the thousands of people who are exposed to the effects of coal ashes on the island.

The surprising new arrangement forfeited the agreement made by AES with the Planning Board on May 1, 1996 and also with the facts the company certified in its Environmental Impact Statement (EIS).

According to the Location Permit approved by Norma Burgos Andújar, the former President of the Planning Board, AES had agreed to dispose of the ashes out of Puerto Rico, “including the possibility of returning them” to their place of origin, the Republic of Colombia.

Jaime Fuster Berlingeri, former judge for the Supreme Court of Puerto Rico

Photo by: Rama Judicial de Puerto Rico

Jaime Fuster Berlingeri, former judge of the Supreme Court of Puerto Rico

AES also agreed in the EIS that it would not deposit the ashes or its derivatives as “solid waste products in the landfills of Puerto Rico.”

In a lawsuit brought on by ecologists groups, the now deceased Puerto Rico Supreme Court Judge, Jaime Fuster Berlingeri, decided in favor of the corporation and stated on June 29, 1998 that “neither the ashes or its derivatives would be deposited as solid waste in the landfills in Puerto Rico.”

Now, all these guarantees became null and void.

Contradictions of the Federal Environmental Protection Agency

In the years 2014 and 2015, more than 350 million tons of AES ashes were illegally dumped at the Humacao landfill, as well as, another 7,000 tons dumped in the Peñuelas landfill, as admitted by the Environmental Quality Board (EQB).

In addition, since AES started producing electricity more than a decade ago, undetermined quantities of waste have ended up in residential and commercial areas on the island, exposing the soil, bodies of water, and human beings to polluted toxic material.

These facts were acknowledged in a phone interview with Judith Enck, Region 2 Administrator of the Environmental Protection Agency (EPA).

“The general concern is  heavy metals. Here we found elevated levels of arsenic, so that gave us a very strong position to say ‘stop the spreading this all over Puerto Rico,” as the official expressed.

However, none of these violations has lead to a revocation of permits.

On the contrary, in spite of the concerns, it was Enck, the EPA highest-ranking official in the Caribbean, who recommended through a letter, that the prohibition be lifted so that AES would dispose of the ashes in landfills or certified deposits, in or outside the island.

Laura Vélez, EQB's former president, in a press conference with the Governor of Puerto Rico

Photo by: La Fortaleza

Laura Vélez, EQB’s former president, in a press conference with the Governor of Puerto Rico

“An appropriate disposal option needs to be available for the material,” she wrote on August 14, 2014 to the former president of the EQB, Laura Vélez Vélez and past PREPA Executive Director, Juan Alicea Flores.

In an interview with the CIJPR (Center for Investigative Journalism of Puerto Rico), Enck claimed that her intention was to stop the “uncontrollable” spread of coal ashes in Puerto Rico and to dispose of them in authorized locations.

As a condition, she determined that the landfills and containers that hold the ashes need to have coatings or synthetic liners to reduce the possibility that the nearby ground and bodies of waters will be polluted with heavy metals, especially, with arsenic.

Nevertheless, neither Enck nor the EPA have given instructions to provide protection to wells that have been threatened for a decade with heavy metal contamination due to the tons of compressed ashes on the island’s surfaces.

Can the coal ash residue pollute the Aquifer of the South? – asked the CIJPR.

“It’s possible that there’s been ground water contamination,” she admitted. “We’re not aware of  the environmental damage at this time, but I am very interested in AES installing theses liners and having this controlled staging area that would then lead to the export of the ash off the island. But you’re absolutely right. There has been problems around the country (US) with coal ash disposal. Pretty significant problems,” she admitted.

Likewise, when we asked her why it was not better to make AES export the surplus of ashes, as was guaranteed by the private company to the government of Puerto Rico in the 1990’s, Enck pointed out a jurisdictional problem.

“The EPA does not have the legal authority to say ‘you have to ship it out of the island.’ We do have the authority to say that they should be taken to a legitimate landfill. If the government of Puerto Rico wanted to do that (exportation orders), they could do that,” she added.

Hot Potato

But, the executive director of PREPA, Javier Quintana Méndez, said that based on the Enck’s written recommendation and the emergence of new federal environmental regulations —which allowed AES to keep its ash production in Puerto Rico— the public corporation allowed the to amend the contract.

“Therefore, that clause was no longer necessary to us. And so, the amendment allowed AES to be able to dispose of those ashes in landfills on the island,” he insisted.

Nevertheless, when (Quintana) was faced with the incidents made public by the media that presented evidence that the multinational company did not comply with the original clause of the contract for many years, Quintana insisted that at that time, he was not the executive director.

In his own defense, the official stressed that the Authority is “always on watch for environmental compliance.” However, this premise contradicts PREPA’s historical record.  For example, the public corporation has not complied with the federal environmental standards known as Mercury Air Toxic Standards (MATS) since last year.

On the other hand, Quintana Méndez showed difficulty in trying to explain who had requested altering the contract. “In this particular case, it is through a request made by the company as well as from information that we received from the EPA, in terms that the company requested the amendment.” But the public official appears to have reversed the order of events, as in the letter sent by the EPA Administrator on this topic the federal officer categorically states the opposite. “The Puerto Rico Electric Authority (PREPA) has asked the U.S. Environmental Protection Agency and the Puerto Rico Environmental Quality Board (EQB) to confirm in writing whether they believe that the 1994 Power Purchase and Operating Agreement between PREPA and AES Puerto Rico L.P. should be modified to allow the coal combustion residuals (CCRs) i.e. coal ash, generated by AES power plant in Guayama PR to be disposed of in a landfill in Puerto Rico”, Enck wrote to the PREPA and the EQB in 2014.

Quintana Méndez also avoided answering how this change could benefit more than a million residential, commercial, and industrial PREPA clients.

“Well, look, this is an internal issue of the corporation and, basically, there is a resolution from the environmental agencies that it is acceptable that they use the landfills to dispose of the ashes,” he answered.

Likewise, Quintana Méndez stated he does not know how much AES would save through the amendment of the contract.

Do you have any idea how much it would cost to export the ashes?, asked the CIJPR.

“I have no idea, but I believe it should be a more costly activity than disposing them in a landfill,” he answered.

The executive director also assured that he did not have enough information to emit a judgment on Agremax, a commercial product created by AES with moistened coal ashes that it has tried to sell unsuccessfully as a construction aggregate.

However, when we showed him a photograph taken in 2006 in which he appeared with high-ranking AES executives being presented Environmental Excellence awards from the Puerto Rico Manufacturers Association, the official responded by saying that “he was often” invited to awards ceremonies and to having his picture taken with a group.

At that time, Quintana Méndez served as the executive director of the Solid Waste Authority and during the awards presentation, AES was recognized for “beneficial usage” of products derived from coal combustion.

Enck is not well informed

Enck, on the other hand, asked the CIJPR to pay “special attention to the fact” that the ashes that are produced in Guayama “are no longer being dispersed throughout the island.”

At the same time, she insisted that AES “ is exporting them to Alabama.”

When confronted with proof of cargo trucks moving tons (of ashes) to the Peñuelas and Humacao landfills, the EPA administrator promised to investigate further.

Five days later, Enck asked to correct the record.

“AES has communicated to EPA that they are not sending Agremax to Alabama, and haven’t done so for a few years,” Elías Rodríguez, representing the official, wrote on January 26.

From that moment on, written communication with AES Puerto Rico representatives and the CIJPR to coordinate an interview with their president, Manuel Mata, were interrupted.  Including a preliminary date that had been set for the encounter.

Unfortunate Scandal

Ruth Santiago Quiñones — an Environmental Rights lawyer that knows the beginnings of AES in Guayama — described the change to the contract as “unfortunate.”  Santiago Quiñones belongs to the Diálogo Ambiental organization, which has censured AES for years for the contamination it has caused.

“This was not the original and legal plan. It was a requirement set for them to operate and they have violated it for a long time,” she continued.

In addition, Santiago Quiñones questioned the validity of the procedure, since the Planning Board has not amended its resolution to allow for the disposal of the ashes on the island “even less with the Supreme Court, that approved the operation of the plant based on that condition.”

“The fact is that there is no way the court would amend it.  It would have to be (rejected) a new case,” she indicated.

Juan Rosario Maldonado, from Misión Industrial, an organization that in the 1990’s challenged the courts in relation to the permits awarded to AES, agreed with the attorney.

It was precisely Rosario, as the consumers’ representative in the PREPA Governing Board, who brought forth repeated objections to amending the contract with AES between 2012 and 2015, “because it was a company that had violated its environmental contract.”

“However, they waited until I left my position to do it,” he condemned the decision upon learning that the contract had been changed a month after his term expired on the Board.

“I would have made a public scandal since this is barbarian to me. The company told me that it was not going to deposit the ashes here and then it violated the contract. I think it is a scandal to continue doing business with them,” he expressed.

Another matter is the lack of transparency, since the PREPA Governing Board did not communicate or transmit on the Internet the meeting held where the changes were approved for AES.

The executive director of the Authority pointed out that the meetings where issues related to contracts are discussed or “privileged information are not public meetings and are so provided in Law 57.”

However, that same Law 57 of July 1, 2014 states that PREPA has to publish all of its contracts on the Internet “within a period of 10 calendar days” upon signing.

But it was not until a few days ago, when the CIJPR started to publish the series of reports on coal ashes that PREPA published the amended contract on their web page.

Red Flag

Osvaldo Rosario López, Chemistry PhD, warned that the EPA, PREPA and the EQB now “go hand in hand” in the creation of new problems for the landfills on the island.

Among them, “a time bomb with heavy metals, radioisotopes, that in the long-run will get into the environment. Even more so, in a tropical island with much rain,” he commented.

“I have seen trucks unloading ashes to cover trash, where the winds lifts the trash and transports it for kilometers downwind to communities that breathe them (ashes) and no one in the government is doing anything to protect them,” he condemned.

María Gunnoe, Goldman Prize winner in 2009

Photo by: Earth Justice

María Gunnoe, Goldman Prize winner in 2009

Upon learning about this matter, María Gunnoe, winner of the Goldman Award 2009 in her  struggles against mining exploitation in the United States, gave a warning to the communities: “It is very difficult for me to trust that the government will deal with this enormous problem, because it is our government that has created it.”

Gunnoe has called for solidarity and organization taking in account her three decades of  experience in condemning the destruction of Appalachian mountains and polluting rivers and streams in the zone.

“The strategies put in place in Puerto Rico are the same ones they used in the Appalachians.  Divide to conquer is always the same first move that the corporations use to depopulate and pollute communities,” she added.

“On many occasions, we have encountered extreme violence with non-violent actions, trying to establish peace,” she continued. “That’s why it is time that we all unite at a worldwide level to say in one voice that producing electricity through pollution is inhumane,” she pointed out.


Jason Rodríguez Grafal collaborated in this article.

Toxic Ash: A Caribbean time bomb is the result of collaboration between the Center for Investigative Journalism and La Pela del Sur newspaper, through a special grant of environmental journalism awarded by “Para la Naturaleza”. See the complete series with its graphics and interactives in periodismoinvestigativo.com

1 thoughts on “Puerto Rico government and EPA agree to amend AES contract behind closed doors

  1. Tremendo artículo de periodismo INVESTIGATIVO, como debe ser, y en inglés (para que se entere más gente en este mundo, como debe ser, también). ¡¡Lxs felicito, CIJPR! Y gracias, en particular, a Omar Alfonso por este esfuerzo que, esperemos, traerá la cola que hace falta que traiga esta situación inaceptable. Por fin periodismo investigativo y serio, y –sori– en inglés. Pa’ que resuene y salga de nuestras fronteras, pues mucho se queda en ná porque no hay manejo del idioma nuestro.

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