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(Bloomberg) — New Fortress Energy has been disqualified from an auction held by the Puerto Rican government to secure temporary power generation, the latest setback for billionaire Wes Edens’ troubled company.
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The liquefied natural gas and logistics company asked to be reconsidered for the 800-megawatt contract to help shore up the US commonwealth’s shaky electric grid, according to a letter it sent to the Puerto Rico governor’s office. New Fortress argued that it would be the cheapest power supplier and could provide clean fuel and a fast start-up time, adding that the company already operates turbines on the Caribbean island.
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New Fortress Energy’s market value has plunged nearly 80% this year as its revenue sags and the company struggles under a heavy debt load. Edens told analysts during an earnings call last week that the company expected to grow sales in Puerto Rico, but added that the auction requirements were “stringent.” He did not mention the rejected auction bid on the call.
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New Fortress Energy confirmed sending the letter to Puerto Rico Governor Jenniffer González-Colón but declined to comment further. The company’s letter did not specify why it was disqualified from the auction, saying only that its bid was deemed “non-conforming.”
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The letter was first reported by Noticel.
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Earlier this year, Puerto Rico’s government asked for proposals to provide temporary generation to help keep the lights on this summer. The island has some of the least reliable and most expensive electricity of any US jurisdiction, and blackouts are common.
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Puerto Rico Energy Czar Josue Colón said Sunday that the field of seven bidders had been narrowed to just two firms. Colon added that negotiations were ongoing but did not provide a time line for when a winner would be announced.
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In the May 19 letter, Edens said that two firms — Javelin Global Commodities and Miami-based company Power Expectations LLC — were selected to proceed in the auction. In addition to requesting reconsideration, Edens asked that any relationships between bidders’ lobbying firms and the government be disclosed.
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Puerto Rico’s governor’s office, energy czar and the Puerto Rico Public-Private Partnerships Authority did not respond to requests for comment.
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—With assistance from Liam Vaughan and Archie Hunter.
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