New Fortress Energy Faces Disqualification, Debt Crisis, and Energy Future Uncertain in Puerto Rico.
EnergiesNet
HOUSTON
EnergieSNet.com 05 21 2025
New Fortress Energy has been disqualified from Puerto Rico’s temporary power generation auction, where it sought an 800 MW contract to help stabilize the island’s grid. The company called for a reconsideration, arguing that it was the cheapest and most efficient option, but its bid was labeled “non-conforming” without further explanation.
Meanwhile, New Fortress Energy has extended its gas supply contract with the Puerto Rico Electric Power Authority (PREPA) for one year, securing continued natural gas shipments in a $110 million deal. Despite this, the U.S. Department of Energy (DOE) has redirected $365 million toward grid resilience projects in Puerto Rico to improve power flow and emergency response capabilities.
Financially, the company is struggling, with its stock plummeting 62.7% after reporting a Q1 loss of $0.73 per share, raising fears of debt restructuring or bankruptcy. With $9 billion in debt, New Fortress Energy has begun selling assets, including its Jamaican LNG import terminal for $1 billion, as part of its attempt to regain stability.
Despite setbacks, New Fortress Energy has secured a 3-year charter for an LNG regasification unit in the Dominican Republic, signaling a potential expansion in the Caribbean. However, analysts warn that without a major financial turnaround, the company could face serious long-term viability challenges.
Puerto Rico Energy Situation
Puerto Rico’s energy situation remains fragile, with ongoing blackouts, financial instability, and grid modernization efforts. In April and May 2025, the island experienced two major outages, affecting over 1.4 million customers. To address the generation shortfall, the U.S. Department of Energy ordered the activation of 35 fossil-fueled units to prevent further disruptions. LUMA Energy is facing a $600 million liquidity gap, raising concerns about its ability to maintain operations. The Puerto Rican government has announced plans to terminate LUMA’s contract due to technical and administrative failures
Looking ahead, FEMA has allocated $5 billion for infrastructure upgrades, including $630 million for substations and transmission lines. The island plans to expand solar and battery storage, but progress has slowed after $365 million in funding was redirected to immediate grid stabilization. With LUMA’s potential exit, Puerto Rico is exploring alternative companies to manage transmission and distribution.
FEMA is financing reconstruction efforts but depends on LUMA and other entities for execution. LUMA has faced criticism for delayed repairs and financial instability, leading to uncertainty about its future role. Puerto Rico’s energy future hinges on new investments, administrative changes, and infrastructure improvements.
Sources: Bloomberg, Reuters, Seeking Alpha, Houston Chronicle, Power Magazine, Energy.gov., Daily Energy Insider, El Nuevo dia, AI.
Writing by Elio Ohep, EnergiesNet.com
