Intel stock extends gains after report of possible U.S. government stake
Investing.com -- New Fortress Energy (NASDAQ:NFE) stock dropped 7.4% after Puerto Rico’s financial oversight board rejected a proposed $20 billion natural gas supply contract that would have given the company significant control over the island’s energy market.
The Financial Oversight and Management Board expressed "profound concerns" about the 15-year contract between Genera PR, a New Fortress subsidiary that operates Puerto Rico’s power plants, and the company’s gas delivery unit. In a letter to Puerto Rico’s energy czar Josue Colon, the board stated the deal would create a "monopolistic arrangement" that could jeopardize energy security.
The oversight board criticized several aspects of the contract, including exclusive supply rights that would limit market competition and a take-or-pay structure that could force Puerto Rico to purchase more liquefied natural gas than needed. The board also raised concerns about the procurement process, suggesting it "was inherently the result of direct negotiations with NFE rather than a true competitive procurement."
According to the letter, the contract would have established binding obligations for Puerto Rico to pay for gas regardless of actual consumption, potentially resulting in unnecessary costs that would ultimately be passed on to ratepayers. The board also highlighted an "uneven allocation of risk" that disproportionately favored New Fortress at the expense of the Puerto Rico Electric Power Authority.
The oversight board indicated it would consider extending the current gas supply agreement as a temporary measure to ensure continuity of service while a more balanced arrangement is negotiated.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.