Speaker 2 | 06:56
Welcome, everyone. Yes, I see Eddie, I am missing my Prepa team, I'm missing Lionel. I just sent him a heads up. I'm gonna go ahead and call him one second.
Speaker 3 | 07:36
A patient Thomas.
Speaker 4 | 07:39
Thomas pay how are you.
Speaker 5 | 07:43
Thomas? I'm good, how are you, Abraham?
Speaker 4 | 07:46
Fine, here in ibnito ibonito Puerto Rico.
Speaker 6 | 07:53
All right.
Fabian Velez | 07:57
How are you? Eddie.
Speaker 2 | 08:12
Spoke with Lionel. He'll be connecting in the next few seconds, so let's just give him a be there in a minutetakul.
Speaker 4 | 08:30
I din a day.
mgarcia@recomspr.net | 08:31
Yeah. I seek.
Speaker 2 | 08:51
There he is. The news.
Speaker 8 | 09:06
Good afternoon, everybody. Sorry for the delay.
Speaker 2 | 09:09
Good afternoon, Miro Santanoon.
Speaker 8 | 09:20
This was I the only one missing?
Speaker 2 | 09:25
We extended the invitation to Miro Gonzalez. I don't know, I haven't received confirmation whether he's going to be able to participate.
Speaker 8 | 09:34
Let me think I can talk to him. I spoke to him earlier today so I know he's already in Boston.
Speaker 2 | 09:43
But true, he has his son's graduation. That's right.
Speaker 8 | 09:51
I was just asking him if he's available to join. If now we'll continue, that's him.
Speaker 2 | 09:56
Okay.
Speaker 5 | 10:34
A second.
Speaker 8 | 10:55
There's nobody else here from Prepa?
Speaker 2 | 10:59
No. All responsibility has fallen upon you. [Laughter].
Speaker 8 | 11:19
Okay, he's gonna try and join later, we can proceed then.
Speaker 2 | 11:24
Fantastic. Well, first and foremost, thank you all for joining. We really appreciate it. The expectations team being here to be able to discuss a proposal that was submitted with the amendments. We have reviewed your terms and conditions as well as the technical aspects, and we do have some clarification to be done for us to be able to understand
the options and the terms and conditions that are willing to accept and see if we can find some middle ground. Then, we can have a discussion. So, Miguel, can you please present the issues list that we have established, with the different terms of conditions that were presented on the contract so we can discuss. Thank you.
Okay, so in this little table that we have prepared, can everybody see.
Speaker 8 | 12:17
Yes.
Speaker 3 | 12:17
Well.
mgarcia@recomspr.net | 12:18
Can you enlarge it, please?
Speaker 8 | 12:23
Mariela. Before we go on, I think I can save for everybody on this call sometime. I want to let you know beforehand, we had the opportunity to meet with management. And basically, management's position is that the RFP was an RFP for the procurement of power or a power purchase agreement and basically for paying for kilowatt hours delivered, basically.
Obviously, our target cost is 24 cents. So, with that in mind, if you want to go on through all of these points, obviously, there may be some things which may change management's point of view, but basically, that's
prepas right now. And we should not stray too far away from it, if you get what I mean. But could you please continue?
Speaker 2 | 13:58
Yes, sure, of course. Okay, so the issue number one, regarding article two, the proposal includes a minimum annual energy commitment of 8,000 hours. Eddie, will you be handling the explanation and what are the expectations of our expectations?
Speaker 3 | 14:18
Yes. So Thomas is going to take over anything that has to do with the PPA. Thomas.
Speaker 5 | 14:26
Sure. So the minimum commitment. This goes to the point that sense for a kilowatt hour is really a function of the number of hours that are used and the total duration of the contract in addition to just the pure variable cost.
Maybe I could, Mister Santa, if I could better understand the 24 cents, is that... Are you saying that, let's say, it's a one-year contract, and you would run 500 hours, and it would be 24 cents.
Speaker 8 | 15:06
Okay, in order for me to answer that question, I have to make a question. I'm just the attorney here. I'm a necessary evil. So, from the technical standpoint, a normal year 2047 dispatch or the regular dispatch because we know that in the year, it may not run 2047 365 days because there may be some sort of maintenance going on, some sort of outage or whatever it comes up, right?
But in normal, ordinary, or ideal terms, how many hours would be comprised of 500?
Speaker 5 | 16:00
No, what we're saying is that there's some minimum number of hours that we need to run to get to the prices that we have given you guys. Okay, we sent that matrix, right? It's a function of the total duration of the contract and the minimum number of hours. We can change the duration and the minimum hours, and that impacts the price. Does that make sense?
Speaker 8 | 16:27
Yes, I understand. So, from your perspective, you would... So, what you're saying is that you would have to run a minimum of 8,000 hours in order to get to the 24 cents.
Speaker 5 | 16:48
Now to get to the different prices, maybe we can pull up that matrix. Do you have Pason? Do you have that or Landon, the most recent.
mgarcia@recomspr.net | 17:01
It gives me a.
Speaker 5 | 17:07
And the one we sent over, the most recent one was.
mgarcia@recomspr.net | 17:11
I believe yesterday I got that. That's the one, correct?
Speaker 5 | 17:16
Yes, I think it is. Well, it may or may not be the one, but I think this is the one that still has that.
mgarcia@recomspr.net | 17:24
That's the last one that was sent over. Okay.
Speaker 5 | 17:33
So to achieve these prices, it assumes a minimum of 8,000 hours a year. We can go again, you can go to 4,000 hours a year, and the price goes up. 1,000 hours a year goes up even more. Right? So, that's the way this was structured.
Speaker 8 | 17:55
Okay, let me rephrase my question then, because, you know, I'm sorry, but I still don't know what I'm aiming at. What I'm aiming at is, there are so many hours in a year, right? So, what I'm aiming at is, if our contract ran for a full year and you dispatch hopefully and ideally full-time, how many hours would that be?
Speaker 5 | 18:26
We're saying that would be 8,000 hours. So.
Speaker 8 | 18:29
Okay, it would be.
Speaker 5 | 18:31
There would be another approximately 10% of the hours for different reasons we weren't dispatched or there was maintenance or whatever might occur. Is that fair And.
Speaker 8 | 18:43
Yes. So, you're saying, though, that 10% is contemplated in those 8,000 hours. Yeah, 24 yeah.
Speaker 5 | 18:53
Four years is 8,760 hours, so we would basically be running 90% of the hours.
Speaker 8 | 19:01
Okay, so, yes, that makes a lot of sense. That is something that can be worked on, and if you ask me, of course, I can't guarantee it. But you'll be here for more than a year. Things don't move as fast as we would like them to move.
So my expectation and Prepa's expectation and P Three's expectation is that this is going to be more than a one-year contract. But in the scenario we have in front of us, let's talk about one year, okay?
So, no, thank you for the explanation. I fully understand that we can move on then.
Speaker 5 | 19:55
Okay, thank you.
Speaker 6 | 19:59
Just a quick question on the issues list. I just want to make sure if this is based off of the red line that was sent on Thursday?
Speaker 2 | 20:08
Yes.
Speaker 6 | 20:09
Okay, thanks.
Speaker 2 | 20:11
And if you have any, if you don't see an alignment here with what you propose, please let us know. Okay? Thank you. Issue number two, articles 4 and 9. If the contract includes a request for mobilization payments and escrow arrangements, we would like to better understand the timing, the triggers, and the financial structure.
So can you go back to the table again that you presented with the numbers, please? Okay, so if it's our understanding that you're requiring three months of power generation to be given to our expectations as initially
proposed, but again, three other months, they deposited on an escrow account, and the sum of that, just for a... It's 61,900,000,000 dollars. 346,387... Am I correct?
Speaker 3 | 21:09
No. That has nothing to do with our... With your PPA away with your three months. No, Thomas, maybe you can elaborate on that.
Speaker 5 | 21:21
If you want to educate PA, and we'll go over that.
Speaker 6 | 21:24
Yeah, well, I mean, this came from you and Abraham, I think. I think the concept was to deposit money in escrow for the first three months.
Speaker 3 | 21:38
Right? So, Mariela, one of the things that we are coming across right when we go out to build a facility of this size is that we have to go and secure funding. We use Blackstone and the Carlyle Group. Huge private wealth funds. One of the things that they're demanding is that the island of Puerto Rico have at least three months of PPO in an escrow account. This way, they're secured for their capital recovery.
All right? If they're putting up, say, a billion dollars worth, we're literally building new power plants, right? I mean, this is equipment that will not be moved ever again, okay? So, they have to make sure that their asset can be paid for.
So, one of the things that they've been really adamant about and very clear about is that Emera and New Fortress have a bad credit rating. This is hurting Puerto Rico. Okay, and banks are reluctant to do business here.
So, there are certain stipulations that they want, and one of those things is to make sure that we have at least repayments in an escrow account and that has some skin in the game.
Speaker 6 | 23:08
So. I'm just taking a look at the contract, and Dan, just correct me if I'm wrong here, but I think what I came across to you all is essentially there's an obligation to put all this... This is going to be entirely funded. The scheme of money is my understanding, and the obligation is for all that money to go into escrow.
Speaker 8 | 23:30
Okay, time out. Let me here a second, and I apologize for that. Not well, it may not all be FEMA funded. Most of it will not be FEMA funded. I just want to clarify a couple of things. I really wanted to explain to you the assessment that New Fortress credit rating is affecting Puerto Rico.
Again, I'm just a lawyer. I'm not a numbers guy. I use my phone to multiply and divide. So, for clarification purposes, we have two private operators who do not insert one cent of private capital into their operations.
Okay? Neither the ome with Aa nor the one with Luma. Makes them... Well, these are two of the best contracts that any contractor has ever gotten. Puerto Rico because all responsibility relies upon... Falls upon B, not the central government, but Prepa, and none of it falls on Henera or Luma. Actually, we're responsible for their acts and omissions as agents for Prepa, and there is not one cent of private capital coming in either from Henera or Luma, and contractually, they're not obligated to do that either.
Okay, so but that we can... I'm just curious. I'm not criticizing your comment. I'm just curious to what's out there and how people are perceiving it. Okay, but going back to this point in particular...
So, from the common man's point of view, then I'd have to ask you this. So, we're not really talking about a mobilization cost. We're talking about a guarantee here. And that's why you're mentioning an escrow account with at least three months deposited there.
Right.
Speaker 6 | 25:56
I want to back up. There are two concepts here. There's a mobilization thing, and that is a separate concept. What is written in the contract is this concept of escrow. The escrow, as it's written right now, actually is requiring... Whenever there is money available for this particular project or these projects, it is put into escrow. There is an additional concept that I think maybe got lost in translation a little bit that does say to make an advance payment upon the execution of this agreement equivalent to the first three billing periods.
But maybe what that should be saying is, "It is that of the money that's put into escrow that there has to be at least three months' worth of billing periods in that escrow." As opposed to it actually getting paid out.
Speaker 8 | 27:03
Okay. Because we cannot prepay anything, but we can work, and we can consult management, and I think from my perspective, it's doable. We can work with an escrow account, which will give you some sort of peace of mind, of course.
Right. But what we cannot do is pay you upfront. Another sticky point is the mobilization or demobilization cost, because we expected this to be all in your RFP offer, but anyway, Well.
Speaker 6 | 27:46
Let's just ring-fence the escrow issue. It sounds like maybe what we can do is maintain the escrow language, change the three billing periods from an advanced payment to just a minimum requirement of funds that need to be set esc.
Speaker 8 | 28:11
Okay. For clarification purposes, this is not a proper management position. I'm just trying to be reasonable here and find something that works for all parties involved. So, I'm more than willing to recommend that.
But I cannot guarantee that that's going to be the case. Okay? But I'll just get behind it and push as far as I can.
Speaker 9 | 28:42
You going to talk about the mobilization fee, Pason?
Speaker 6 | 28:48
I mean, we can jump there. So, I just take a few minutes to rus.
Speaker 5 | 28:54
We go to the issues list. Who is Miguel.
Speaker 2 | 29:01
Thank you. Okay, so just to be clear on the chat, I put that in the agreement. As we may see, the way that is written, it's to support a front-capital deployment by... Shall be one deposit of three months of estimated payments into a designated escrow account prior to COD and make an advanced payment equivalent to the first three billing periods.
So, that's something that we're going to be rephrasing to establish that it's going to be an average of the three months of energy, and it's going to be deposited in an escrow account. So no, deposit for no prepaid advance payment.
Speaker 6 | 29:47
Yeah.
Speaker 2 | 29:48
Okay, so thank you. Okay, good. Thank you for the clarification.
mgarcia@recomspr.net | 29:52
And.
Speaker 9 | 29:52
And language had said that all amounts received from the funding sources would go into escrow. Are we still keeping that concept or is it now limited to three months?
Speaker 6 | 30:05
And I was suggesting is that we keep that in that. But at a bare minimum, there has to be three months.
Speaker 8 | 30:14
Okay? But to clarify further, I don't want to get bitten from behind here. So, that deposit in that escrow account would be used at the end, whenever that happens, to fund the last three months. Or are we envisioning the escrow account as money that you will take home later after everything is ended?
Speaker 6 | 30:50
No, it's not like an incremental payment, it's just to ensure that there are funds to.
Speaker 8 | 30:56
It's like the bond. Okay, got it.
Speaker 2 | 31:05
Okay, well, I would like to clarify. I don't know. I think there's a little bit of confusion whether the FEMA funding for this project. There really is, as of this point, no FEMA funding for this project.
Fabian Velez | 31:15
This point is no FEMA coming on either on Oremized the costs independently.
Speaker 2 | 31:17
But it was the interconnection is going to be done either at Carlisle or at Costsor. There is an active project worksheet number for here in Maria on those two sides. And ideally, one of the things that we're trying to do and the reason why we have asked proponents to itemize the interconnection costs independently is that we are not disregarding the intention to try to pass the interconnection costs through the PW through mitigation efforts.
Fabian Velez | 31:37
They said we are not supporting, we intend to try to lead that mitigation cost, the government mitigation efforts. So that's something that Reba is trying to see how the account goes to see if we can get that that's something that the Grama is trying to see how the account goes to see if we can get that money.
Speaker 2 | 31:49
So that's something that Reba is trying to see how they can accomplish to see if we can get that money from the interconnection from FEMA but at this point, the way it's contemplated, I think there was an addendum that established where payments were coming from.
Fabian Velez | 31:56
And the internation quickly. But that's really a waste on the plan. And I think there was an... That established that data was coming from it that quite spars money at this point.
Speaker 2 | 32:06
It's the ratepayers' money at this point.
Fabian Velez | 32:08
So I just wanted to make sure that everyone was clear that Japan for the first mas.
Speaker 2 | 32:09
So I just wanted to make sure that everybody was clear on that.
Speaker 6 | 32:13
That's helpful. Thank you. So it should be the first part of this issue too, was the mobilization payments. So, Eddie, I don't know if you want to tackle the mobilization for bad fees.
Speaker 2 | 32:34
The, when you say top of the mobilization fees, what do you want to talk about, the quantity or the.
Fabian Velez | 32:37
When you see several of the sessions please write what about the quantity or that it's not getting into the s and.
Speaker 2 | 32:43
Or the fact that it's factored into the price per key. What? I'm not sure where.
Speaker 6 | 32:49
Well, I just heard so I've heard.
Speaker 9 | 32:51
I heard.
Speaker 6 | 32:54
What I thought I just heard was that Profile had an issue with the mobilization payments.
Speaker 2 | 32:59
Well, I think it's well yes, it was we definitely it was not a little bit unclear on whether the monetization payments were included in the price for the KWh. Am I staying in that right KWh hour.
Speaker 3 | 33:19
So.
Fabian Velez | 33:19
And so to conclude the contract was established today with what we will see in the amendments for the terms of limitations and the monetization percentage of right?
Speaker 3 | 33:19
Okay.
Speaker 2 | 33:20
And, so, the way the contract was established, when we received the amendments for the terms and conditions, it had the mobilization cost at zero, right?
But then when we saw the technical side, obviously, there was the monetization fee and the ARAYA, and then with the language that it said, we had to do three months of payments as an advance and then three months of payment into an escrow, and then the price for a kilowatt was exactly the same.
Fabian Velez | 33:37
And then at the same time, on some, as an advance, and then three months of David with escrow, and then the five-part one is exactly the same, so that we want to have a feel on.
Speaker 2 | 33:49
Well, then we were a little bit confused on whether that was a quotation apart.
Fabian Velez | 33:51
But that is your part. So, that's my difficulty to clarify that.
Speaker 2 | 33:54
So. that's why we definitely need to clarify that in this meeting.
Fabian Velez | 33:57
And this mean.
Speaker 6 | 34:00
So just to be clear. Yeah, so that in the contract that was sent over on Thursday, there was the three months prepayment, but we fixed that. So, there was a totally separate concept called the mobilization fee.
And I think what we... I think, yes, the original way we sent the dollar per kilowatt hour basis basically amortized that fee across the kilowatt hours. And we have subsequently, I think, it's been submitted to provide a new kilowatt dollar per kilowatt hour rate that excluded that mobilization fee.
Speaker 3 | 34:47
Right? So on the... If the mobilization fee is paid down, I believe that the new chart shows that your price per kilowatt hour goes down two to three cents a kilowatt. So, for instance, on that three-year PPA, your price would be somewhere about 25 cents a kilowatt. On a five-year, it would be as low as 20 cents a kWh.
So it goes down two to three cents a kilowatt.
Speaker 5 | 35:18
And I think this is the price with that taken out, I think the mobilization fee is now out of these prices, correct? Pason.
Speaker 6 | 35:27
Yeah, that's what I'm trying to.
Fabian Velez | 35:27
See. the impact of our marketing.
Speaker 6 | 35:28
Yeah.
Speaker 5 | 35:28
And I'm looking at the most recent one, and this has the mobilization fee taken out of the dollar per kWh price.
Fabian Velez | 35:31
This has.
Speaker 9 | 35:37
Okay.
Speaker 6 | 35:39
Yeah, we're not.
mgarcia@recomspr.net | 35:41
So quick question, for my part, does the $0.28 is based on the 1000000008 809 million? Is it 1.8 billion? Is that based on that number of the $0.28 of the capital cost?
Speaker 6 | 35:59
Yes, I'm pretty sure it is because.
mgarcia@recomspr.net | 36:01
That capital cost is the sum of the mobilization and generation's.
Speaker 6 | 36:09
No need to demo there.
mgarcia@recomspr.net | 36:11
No demo, just mobilization and generation.
Speaker 6 | 36:16
So sorry.
Speaker 5 | 36:18
Yeah gotcha.
Speaker 6 | 36:19
I got interested in.
mgarcia@recomspr.net | 36:21
So that would mean that the 28 cents is including it.
Fabian Velez | 36:26
Maybe there's a problem with.
Speaker 5 | 36:27
Maybe there's a problem with the way this is displayed. I know the mobilization fee has been taken out of these numbers. This could be a problem with just that capital cost line item.
Speaker 6 | 36:39
Let me... I'm just doing some quick math.
Speaker 2 | 36:41
Let me... Another thing that maybe kind of threw us out a little bit was that when we calculated based on 8,000 hours per year on 28.
mgarcia@recomspr.net | 36:58
But we lost you, Miro Dela Vil.
Speaker 8 | 37:06
Are you froze?
Fabian Velez | 37:09
Sorry that make the as like everything everyone takes and cons the number and it comes to six months and six.
Speaker 2 | 37:10
Sorry, I lost connection. Sorry. So that's maybe something we assumed. Miguel, and I'm not sure, but when we tried to calculate everything and we went 8,000 hours times 28 and times six, the calculation for those six months did represent $6,000,000.
So we were thinking that was a mobilization cost, and maybe that's something that we were wrongly assumed.
Fabian Velez | 37:28
That. And maybe that's.
mgarcia@recomspr.net | 37:35
Yeah, we tried to make sense of what was sent to us. And that's why a couple of questions arose because we weren't sure if those new prices included the mobilization. And obviously, when we go to capital cost, that is the mobilization and the generation cost.
But the sum of these two costs is the capital cost that you're saying here. But we didn't know if these prices per kilowatt represented that.
Speaker 5 | 38:12
Me. Check on something very quickly.
Speaker 6 | 38:43
So I'm getting 20 Thomas, I'm getting 23 cents.
Fabian Velez | 38:45
To.
Speaker 6 | 38:48
When you said eliminate nine just a second.
Speaker 5 | 38:51
So this does have no time.
mgarcia@recomspr.net | 38:56
I and I don't want to obviously disturb you on your calculations, but that price on generation does include the fuel, correct?
Speaker 8 | 39:11
Yes.
Speaker 5 | 39:15
Yes, it does. It's my car. This is the second, but we have. Okay, I mean.
Speaker 6 | 39:28
I'm saying that the 23 cents is without multation.
Speaker 5 | 39:34
23 cents on which term and which side.
Speaker 6 | 39:37
333 go back. Sorry, can you pull it up? It's a three-year term. Can you pull up the first ones in the cost to serve or I don't know which one was Megan.
Speaker 2 | 39:55
Are you waiting for me?
Speaker 6 | 39:56
Can you yeah, can you hold that back up?
mgarcia@recomspr.net | 40:00
Sorry, was I yeah.
Speaker 8 | 40:03
Yeah.
Speaker 6 | 40:05
Wait a second, that's five years.
Speaker 5 | 40:08
I'm getting from Josh right now, that's what I'm saying. Okay, so.
mgarcia@recomspr.net | 40:17
Okay, so let's... We obviously can calculate that, but let's... We have a fairly long list. We want to get that done. We're going to have to get back to it.
Speaker 2 | 40:33
Yeah, we can always.
mgarcia@recomspr.net | 40:35
Circle back. Yeah. We can circle back.
Fabian Velez | 40:38
So we oft and pricing appears to be consolidated into a flat rate above the cost of... That's basically what we're discussing.
Speaker 2 | 40:38
Okay, so we're in issue number three article. Pricing appears to be consolidated into a flat rate per kilowatt without cost separation. That's basically what we were discussing.
Fabian Velez | 40:49
So okay, number six, according to but beg going on and the red line processing water events such as language usage and supply as functions and that relying on expectations are rational but performance.
Speaker 2 | 40:50
So, yeah, okay, article 4A, issue number six, article... Again, you lost me.
Okay? And eleven, the red line. Force major classes introduce broader events such as labor shortages and supply disruptions. We'd like to align on expectations for operational continuity.
Any comments on this issue number four?
Speaker 6 | 41:20
I don't remember, I'm trying to find that article.
Speaker 2 | 41:24
11 shortages. Yeah, I have the contract here, let me see if I can pull it up and put it in the chat.
Speaker 6 | 41:33
I don't see a red line on that.
Speaker 9 | 41:41
I don't think we.
Speaker 6 | 41:41
Revised that at all.
Speaker 8 | 41:57
11.
Speaker 2 | 42:02
Okay, well, maybe this was okay. I don't see a red line there either.
Fabian Velez | 42:03
This was okay. I don't hear a red line there either.
mgarcia@recomspr.net | 42:23
It might not be the red line.
Speaker 2 | 42:25
But it was just it was highlighted a fine.
mgarcia@recomspr.net | 42:31
I'm looking for it.
Fabian Velez | 42:48
You begin if you find something that is to get to.
Speaker 2 | 42:49
Okay, maybe. And if you find something that is, I'll.
Fabian Velez | 42:54
Okay. So.
Speaker 2 | 42:55
Okay. So on issue number twelve and issue number five.
Fabian Velez | 42:56
Number.
Speaker 2 | 43:05
And the red line introduces a dispatch shortfall threshold. Before I apply, we'd like to compare how the structure was developed and its applicability to reliability goals.
Speaker 6 | 43:19
Will we get there?
So can you point out maybe specifically what you all are? Introduces a dispatch default threshold for as? What specifically are you referring to? There.
Fabian Velez | 43:50
This is the test.
Speaker 2 | 43:51
I wonder if this is the correct list.
Fabian Velez | 43:53
I sense.
Speaker 2 | 43:54
The final.
mgarcia@recomspr.net | 44:03
So it's definition.
Fabian Velez | 44:04
I remember looking at.
Speaker 2 | 44:05
The definitions. I remember looking at it in the definitions. Okay, so let me see, let's go back to the definitions.
Deployment period. Can you see it? It's on page eight and HP. Yes, I'll put it here. I will say that.
Speaker 8 | 44:51
Yeah.
Speaker 2 | 44:52
Okay.
Speaker 6 | 44:59
So what specifically in here.
Speaker 2 | 45:02
The red line.
Speaker 6 | 45:05
Basically the whole thing. So I mean, just a recap of what it's saying, right? It's essentially saying that we put in this target date of July 2025. However, our ability to hit the ground running is dependent on receiving that mobilization payment.
The mobilization payment is due five days after the execution of the contract.
Fabian Velez | 45:38
Extended conversation is.
Speaker 6 | 45:38
So to the extent that the mobilization payment isn't received within that time frame, there is an extended day for day extension past the July 20th date.
That's what I'm saying in the first part of the red line. If we did so that makes sense, whether or not you all agree that makes sense. Then the second part is essentially carve outs for not being able to meet that July 20th date. That July 20th date is obviously very aggressive given the time period that therapy can to get off the ground where we are in the summer right now. Certain issues at the sites that we identified in the walkthrough sites, and specifically some electrical infrastructure, maybe a little bit of some potential remediation issues specifically at GIR.
And you know, obviously, we're relying on expedited... I don't know if it's just expedited permitting or some waivers of some permits, but relying on that, but that doesn't happen.
Fabian Velez | 47:02
Suggesting to.
Speaker 3 | 47:14
What Paces is trying to say. So we have a game plan to be able to deploy and be commissioned, okay, in the time needed, but we can't... We don't have the power to do things that we have no control of, right? Permitting. This whole process has taken longer than we thought it was going to take. We know what we can do. Mariela, so, yes, we understand the scope of work. We understand that if we have to run those sites 24 hours a day to get the job done, we have the manpower, we have the experience. We have all the equipment.
Okay? But there are things that we are out of our control.
Fabian Velez | 48:03
Makes sense of the A and the finals.
Speaker 2 | 48:04
Miro Santa, I don't know if the my only concern o you see is that this is it is an emerg generation I fee, right?
Fabian Velez | 48:06
You know this is an emergency, and generations of people process now, and we are definitely in fees going to the... We are accelerating any thinking plan.
Speaker 2 | 48:12
We do want to move as fast as we can. You are going to be in charge of the permitting. We are definitely, when I say we, the government of Puerto Rico, will definitely try to facilitate anything we can.
Fabian Velez | 48:23
But obviously, parting there is inserted, it's like a big thing from extension. He said you feel... For as near to that.
Speaker 2 | 48:24
But obviously, the wording there that is inserted is like a day-to-day extension. Miro Santa, I don't know how you feel about that class. Would you like to express on you're... Miro Santa?
Speaker 8 | 48:39
I'm just sorry, I was just trying to switch devices here because everybody's starting to break up on me, so I think I'm a problem. But still, I caught the concept of what you're talking about and certainly if.
Fabian Velez | 48:57
And suddenly he can agree to the concept that he waspons.
Speaker 8 | 49:01
Okay. If we can agree to the concept that the responsibility for the permitting falls on you guys.
Fabian Velez | 49:13
I don't have a problem recommending that the fact that the letter is.
Speaker 8 | 49:15
I don't have a problem with recommending language to the effect that whatever is...
First of all, that we are not only Prepa P3, but the whole government of Puerto Rico is committed to helping this project.
Fabian Velez | 49:35
Mess fast as possible.
Speaker 8 | 49:38
Whatever it takes. We're going to do everything within our grasp to move it along as fast as possible.
And that that's you know, that calls for waivers, that calls for expediting, permitting.
Fabian Velez | 49:46
Accounts for.
Speaker 8 | 49:56
So I and we can work on some sort of language that whenever a delay is not in your hands, it's not caused by you or your lack of action.
Fabian Velez | 50:19
We can.
Speaker 8 | 50:20
We can work around those dates and we can extend those dates without penalty.
Fabian Velez | 50:21
We can.
Speaker 8 | 50:26
But we do need some sort of dates to be sure that you know that you're going to move along as fast as you can, obviously.
Fabian Velez | 50:34
It's like SE repeating that I'm suggesting is you.
Speaker 8 | 50:34
But it's at least from my point of view. And. And you know, as I said in the beginning, everything that I'm suggesting is things that I find reasonable and that I'm willing to recommend fully recommend to management.
Fabian Velez | 50:55
And if we can run such language drs doing something that the eyes smell the lights and thats so I think I mean.
Speaker 8 | 50:55
So we can work on such a language, that would be great. It's not obviously, if it's something that it's completely out of your control, you shouldn't be penalized for that. So we can work around those deadlines and provide some sort of cushion for you guys.
Speaker 6 | 51:21
I think... Obviously, we've got this July 20th date in there, which, like I said, we fully realize. It's extremely important. It's an emergency deployment. There are things that can happen outside of our control, like we just discussed.
I think the best approach here would be to put some language in here that we're going to use our commercial best efforts to get this done in that time. And yeah, maybe to the extent that I think along the lines of what you were just saying, to the extent that it is evident that we are not using those commercial best efforts to get this done, there can be some recourse.
Fabian Velez | 51:55
It's evident that we are not.
Speaker 8 | 52:08
Okay, we can just give that some thought and come back with some language which is agreeable to both parties.
Speaker 2 | 52:17
Okay, we.
Speaker 5 | 52:19
I've got the tables. If you want to do a quick go back on the with and without mobilization.
Speaker 2 | 52:25
Okay?
mgarcia@recomspr.net | 52:27
Go ahead, you can. Are you... Do you want me to present the table or are you going to present it yourself?
Speaker 5 | 52:33
I have the table with and without mobilization. I just had to make sure that it was the most recent one. I'll go ahead and share it.
mgarcia@recomspr.net | 52:41
Okay, go ahead.
Speaker 5 | 52:42
So that's one with this. This is the with mobilization, this is without mobilization. So the shorter the term, obviously, the bigger the delta, right? When you go out in time, the delta between the two gets kind of narrowed.
It's around a penny and here it's basically at four pennies or 4A. So these are the ones we should be using.
The three years is a little bit tighter with regards to that. 24 cents, but you have a lot of headroom on the 57 and 10. Okay, any question?
Fabian Velez | 53:45
This is the.
Speaker 5 | 53:46
And this is the correct number that you guys are right.
So this one had the 1.8. This is the 1.189 and the 4.0. Just the straight drop-down. And that does include fuel, so I just wanted to make those clarifications perfect.
mgarcia@recomspr.net | 54:00
Thomas, can you... It doesn't have to be now, but you can send it to us?
Speaker 5 | 54:06
Yes, Landon, I'll get it to Landon and I'll get it to you guys. Okay.
mgarcia@recomspr.net | 54:10
Perfect. Thank you.
Speaker 2 | 54:11
Thank you. That certainly clarifies a lot. Thank you so much. Can you please go back to the issues list if you can? Thank you.
Fabian Velez | 54:24
Okay, so each number is six master courses.
Speaker 2 | 54:26
Okay, so it's issue number six, Blackstar and dual fuel features are mentioned but not itemized in pricing.
We would like to understand their impact on service delivery and cost.
mgarcia@recomspr.net | 54:40
Nine and 10, 1044545.
Speaker 2 | 54:47
Yeah, I'm sorry, yes.
Speaker 6 | 54:51
I don't remember marking this up.
Speaker 2 | 54:53
So that's the same.
Speaker 8 | 55:07
Yes, I was here.
Six.
Speaker 6 | 55:37
I don't remember the concept of Black Star ba.
Fabian Velez | 56:04
Sit down.
Speaker 2 | 56:05
Not see how time I'm find.
mgarcia@recomspr.net | 56:15
Yeah, I'm looking for it.
Speaker 6 | 56:21
But just do a search function on Blackstar. Yeah.
Speaker 2 | 56:27
Okay, well, let's continue then to the other be.
mgarcia@recomspr.net | 56:35
Okay, one less.
Speaker 2 | 56:37
One less. Okay, the issue of indemnity language includes carves out and limits on consequential damages.
Fabian Velez | 56:42
Indity acts as and limits on consequential damages. You make quite an easy learning. We just want to make sure that everyone is lying.
Speaker 2 | 56:50
Everybody is aligned. We just wanted to make sure that everybody's aligned on risk sharing.
Fabian Velez | 56:52
Is shaaring.
Speaker 6 | 56:57
I mean, I think carve-outs for consequential damages is a pretty typical contractual arrangement.
Speaker 8 | 57:04
So I agree.
Speaker 2 | 57:08
Miro Santa.
Speaker 8 | 57:10
I agree.
Speaker 9 | 57:11
Okay.
Speaker 2 | 57:12
Perfect. No problem there. Okay, issue number eight jurisdiction remains in Puerto Rico, but with some procedural suggestions.
Speaker 6 | 57:26
Did we change that? No, I don't think that.
Fabian Velez | 57:29
Cannot powerb.
Speaker 2 | 57:32
Okay, let's go to nine. Okay, the proposal assigns different other duties by site. I have a question on the LNG side aspect. So I know that the proposal for Costsor is LNG supply and AG, we will clarify that it was LNG SOP. I was advised that you were planning on doing a reclassification and system and to be able to supply that, and I'm not, I don't know a lot about this, but would that affect the timeline in the execution of the work?
Speaker 3 | 58:15
No, not at all. We by Monday, our GAs provider will have a full detailed plan on gasification. Everything will be in there on Monday. They're completely giving us everything for you, so I'll have that in to you by Monday. Miro.
Speaker 2 | 58:34
Do you? It would be too much for us if the... We would like the logistics of that if the fuel supply. Just to make sure that what you're proposing really aligns with our timeline.
Speaker 3 | 58:49
Yes, 100%.
Speaker 2 | 58:51
Miro Santa, do you have any comments on that?
Speaker 8 | 58:54
No.
mgarcia@recomspr.net | 58:55
Okay. Yes, and RFi and an RFi just went out today to you, and I'm just looking for some information for the new units that were proposed for a hearing and a gasification of those units. I know that this new drawing just states that reaclassification is... This line is going to be planned somewhere around here. I don't know if that's final, spinal.
It's just put there just as a markup just to have it. But yeah, again, if I just went out for you guys, I think that for... I have to answer it by Monday.
Speaker 3 | 59:41
Yes, Monday at three o'clock.
mgarcia@recomspr.net | 59:44
Yeah. Just as clarification of the units of the new Rolls Royce and the ST T 600 turbines that are new to the proposal, obviously. And the availability of these units.
Speaker 3 | 59:58
We availability can you specify that?
mgarcia@recomspr.net | 01:00:03
I mean, do you have them on site? Are they available immediately? What is the condition of them?
Speaker 8 | 01:00:10
So.
Speaker 3 | 01:00:11
Miguel, everything that we have on this is on hold, ready to be delivered. There's nothing that needs to be... Nothing here needs to... We have no lead time where it has to go into production. Everything is ready on the ground to be put on ships to be brought here. Everything, absolutely everything.
Speaker 2 | 01:00:35
Okay.
mgarcia@recomspr.net | 01:00:36
And okay, so.
Speaker 3 | 01:00:37
And what we're.
mgarcia@recomspr.net | 01:00:39
What we're looking for is, and obviously, it's not that I don't believe you, it's what we're looking for. Obviously, we need to portray this to the government of Puerto Rico. Where we're looking for is any clarification on your end saying, "We own these, so we have them in this warehouse right here." No.
Speaker 4 | 01:01:01
Miro.
Speaker 2 | 01:01:03
Yeah, I can hear you.
Speaker 4 | 01:01:05
Okay? "Aa deta la. Yeah. So no, so Dr. Podemo prove or Bella or forget, say I'm okay, a competitor. Dela terremo, bucaramana pozel sal bag la a form of pot, haular as soulqual menteo, sotro damo saltifoca denemo la loo perro non snmo segro EEE psal don dean't around when I guarantee like effect the contrary and dement come uplo comegarantia lepomo prover mahaa the.
mgarcia@recomspr.net | 01:02:13
Either nosi ante or de dee ante de fma contrato age, Prepa legaclai. It's probably okay.
Speaker 3 | 01:02:28
And let me be just very clear. And the reason why this is an issue for us. Okay. Because we certain people that were in the at proponents on this, when we submitted our proposal went to our providers to try to get our equipment.
Okay. So these have become intellectual trade secrets. These are our... So I have no problem signing any legal document verifying. I have no problem as long as we're protected, okay? That nobody's going to come and go to our providers and try to... You understand that,
us.
mgarcia@recomspr.net | 01:03:17
Yes, I understand.
Speaker 8 | 01:03:20
Okay, so to try and meet you halfway here, let's say without disclosing the supplier.
Speaker 3 | 01:03:36
Correct?
Speaker 8 | 01:03:37
Without disclosing the location of the facilities. If you can guarantee us, maybe through a sworn statement that the equipment is ready to go, that it's been it's on hold. That it will be delivered. As soon as this is signed. Et cetera.
Speaker 10 | 01:03:57
You know.
Speaker 8 | 01:04:00
That would be fine.
Speaker 4 | 01:04:02
Listen, lepunto see the podrama cl laguna the cla hua. Yeah, so effectota plantiano equ seno chevario juria film bahramento.
Speaker 3 | 01:04:27
So the reason is right now, with the demand, procurement is becoming an art form. But we're aware of data centers. Everyone's fighting it. It takes us... Every time I lose something, it takes us an immense amount of manpower to find this equipment and lock it down. We have deposits on equipment that we won't get money back if somebody comes in and makes side deals with us. Unfortunately, in this industry, there are people involved that are not nice people.
So we're just trying to protect ourselves and the people of Puerto Rico that we can get this stuff to you guys on time without someone else coming in and swiping.
Speaker 8 | 01:05:11
Our equipment. And I thought. I thought lawyers was the. You know, were the only profession that.
Speaker 3 | 01:05:19
You have to.
Speaker 8 | 01:05:20
You have to keep your clients safe from the other members of the profession. But I guess this happens in this industry, right? I pray.
Speaker 3 | 01:05:30
Every day. I pray every day that no weapon formed against me shall prosperous.
Speaker 8 | 01:05:35
Okay, so you know that we can work with... Okay, let's move on, please.
Speaker 3 | 01:05:41
Yes.
Speaker 2 | 01:05:42
Okay, yeah, I think Francisco has his hand up. I don't know if he has a comment.
Speaker 10 | 01:05:47
Yes, we, Francisco, are part of the legal team for the recoms. Appreciate the chance. Great conversation. I think you hit the points on the fact that we could, of course, accept a sworn statement. What I would like to add to that fact is that both parties want to make sure that they are protected on our part under the assumption that we want the best.
Speaker 8 | 01:06:20
For the for our.
Speaker 10 | 01:06:21
Our client... That is Prepa and P3 and the goal of Puerto Rico. What we just want to make sure is maybe in that document we can really... We don't get into the nitty-gritty, of course, or where they're located or any kind of trade secrets that you don't want to share.
But we would love to have at least that inventory of those machines that are already... We refer to them as "these machines." Without going into too many details, we make sure that we can identify once the contract is signed and we receive the equipment that was offered was the equipment that was on the SN statement.
Then that fact would basically at least cover us in the fact that we don't want to receive what we have been feeling or negotiating. I know that you're negotiating in good faith. On our behalf, we just want to make sure that ducks are in a row and cross the T's and make sure that everything is as transparent as possible. That would be my recommendation on that document.
Speaker 3 | 01:07:32
Yes, I have the documentation already made. I just sent it to Abraham to overlook. But it'll be... I added we just bought a barge with an American barge with 300MW on it as well.
That is available in case of an emergency or in case that we have to put it anywhere. So we've added that as well. So I do have that, and you guys are going to be Monday? Yes, okay.
Speaker 10 | 01:08:02
Great news.
Speaker 2 | 01:08:08
O so sorry if another issue arose and they're asking something that needs to be turned in immediately. Okay, where do we leave it with the LNG? Okay.
mgarcia@recomspr.net | 01:08:29
Ten.
Speaker 2 | 01:08:29
Okay, I think, yeah, the performance security was addressed using standard terms. I don't see a big issue there. Okay. We saw that the contractor introduces the term "excused events" for supply disruptions outside the seller's control. We would like to understand how this differs from force majeure and how it impacts the reliability and accountability.
Speaker 6 | 01:08:58
So the main difference, I guess, from the force majeure is it. It's immediately triggered versus reporting requirements with Force Majeure. Essentially, it's saying that to the extent that we're unable to deliver the power because something happens on the electrical utility side and something happens on the gas disruption side, it stays... Tanker sinks off the coast of LNG. Tanker sinks off the coast of Puerto Rico and never makes it shore or something like that.
Those are things that are outside of our control and we can't be held accountable.
Speaker 2 | 01:09:53
Mister. Santa?
Speaker 8 | 01:09:57
No, I don't have much to add. I would be willing to recommend that to management. It's only reasonable.
Speaker 2 | 01:10:10
Perfecto. Let's move on to the next issue, the deployment period. The deployment period is tied to multiple conditions and allows for several extensions. Basic clarity and enforceability of a 30-day deployment and how extensions will be validated.
Fabian Velez | 01:10:26
[Laughter].
Speaker 2 | 01:10:32
That is it. You can find it in the definition.
Speaker 6 | 01:10:34
So that's the same one we did. We already addressed that.
Speaker 8 | 01:10:37
We're talking about yes, we did.
Speaker 2 | 01:10:40
And this, I think we discussed this. The country requires 95% availability going in, but introduces exclusions. We'd like to ensure compliance, monitor and verify that constitutes an allowable exclusion. We went over this with the 8,000 hours and the 10% discount, et cetera.
Right, okay, perfect. E-liquidity damages provisions are pre-agreed and include daily shortfalls and service interruptions. We already went through that, mobilization payment. I think we went through this one. The amount and conditions for the me solution are unclear. Orre qualifications.
Yeah, we already discussed that one, and we're going to be receiving the table. The new table that was prepared clarifies all these issues in a written manner, and I believe that this is the end of the document. Miga, do we have anything there or not?
Speaker 6 | 01:11:52
Thought it was over?
Speaker 2 | 01:11:56
No, not yet. Okay, the shortfall is defined as a generation falling 30% below schedule and where what is your positions on this is this something I think we already discussed this we have a you want a commitment of $8,000 an hour.
mgarcia@recomspr.net | 01:12:21
This is a shortfall. This is different. This is the shortfall. This implies if they cannot produce.
Speaker 2 | 01:12:32
Okay.
mgarcia@recomspr.net | 01:12:32
Let's say it is defined as 30% as a... Let's say obviously the recommended 600. So, what the language is saying is that the chart form would be applicable 30% below that 600, correct?
Speaker 6 | 01:12:51
That's correct, yeah. So, Prepa ostensibly is going to dispatch our assets or the assets. So, let's say a 600 MW, they want to discuss an hour. If we don't meet, only if we only dispatch 300 of that...
That's 50%. So we fell below the 30% threshold, which turns into... Miro Sa.
Speaker 2 | 01:13:21
Do you have any comments?
mgarcia@recomspr.net | 01:13:22
No, I don't see that as an issue.
Speaker 8 | 01:13:27
I don't either.
Speaker 2 | 01:13:29
Okay, well, we got that one out of the way. Okay. And 17 terminations. Payment is defined in Exhibit One, but no quantified.
Speaker 6 | 01:13:42
So yeah, the draft we sent over Thursday should have the definition of that included. So you probably have to go to the definitions. Termination payment.
But all it is essentially at the time of termination, it's the payment that's equivalent to whatever's due and owing through the end of the term from the actual terminations to when the term would have ended.
Right? So, let's say you had a three-year term for whatever reason, you know, whatever. Profit defaults in Europe too. They would be paying the balance of payments to year three plus the demobilization. That's not the latest and greatest.
mgarcia@recomspr.net | 01:14:43
So that's all we have now.
Speaker 2 | 01:14:53
Me have an exhibit there that we can verify and see if what he just mentioned is there. I'm not sure if the exhibits are here. Yeah.
Speaker 6 | 01:15:03
Yeah. You didn't receive the red line on Thursday. Was it Thursday or Wednesday? I think it was yesterday.
Speaker 2 | 01:15:17
So you sent it yesterday.
Speaker 5 | 01:15:21
Yeah, we sent it a updated red line yesterday. I don't well land and it did go over to you know.
Speaker 2 | 01:15:28
Okay, well then we'll verify that.
Fabian Velez | 01:15:29
[Laughter].
Speaker 2 | 01:15:30
Okay, that's okay, we'll go back, get back, and if we don't find it, we'll get back to you. Yeah, okay, let me just note that one termination is issue number seventeen.
Look, issue eighteen. Okay. For the operational scope, the seller assumes a full design and integration responsibility, including switch gear and regulatory permitting. And you already confirmed that, right? Okay, Miguel, I'm having a lot of pressure. Apparently, the governor wants right now a letter that we need to send her. Miguel, can you please continue with this issue list?
I think that on my end, the biggest issues have been addressed, at least on my part of my concerns. So I'm gonna go ahead and make sure that I can send that letter to the governor, and I'll come back as soon as I can, okay?
So I'm sorry, I'll be as soon as I can for you for just a few minutes. Thank you.
mgarcia@recomspr.net | 01:16:44
Okay, so let's say okay, A 19 response responsibilities differ by site by assumes LNG duties like conser so a ge e we request confirmation on risk allocation and readiness.
Speaker 6 | 01:16:59
We think we addressed that already.
mgarcia@recomspr.net | 01:17:02
Yeah, I think so. Yeah, I think so. Yeah. I think we addressed this one as well. Majority says we exclude certain delays that are not cost by the seller. Same as this escrow and advanced payments equivalent to the three billing periods I proposed. We got that one out of the way. Okay. Buyer assumes full environmental liability and indemnity for legacy site conditions. We seek legal confirmation on the scope of and exposure.
I will address this as best as I can. Legal is not my strong suit, Francisco. And Miro, Sampa can help you with this.
Speaker 6 | 01:18:02
Well, I can just say that all that we were doing in our red line was to say because there wasn't an obligation for us to provide an indemnity to the extent that we caused any pollution. But obviously, given that we're going to be doing work on sites that have been power plants for quite some time, there could be some preexisting environmental conditions that we had nothing to do with, and we want to be identified and indemnified from any of those preexisting conditions that we didn't have any part of.
mgarcia@recomspr.net | 01:18:38
I understand that if any pre-existing conditions exist, they will obviously be addressed at the site when the site is chosen for before you know and any construction starts, and that could be added, but definitely anything afterwards will be responsibly inside of what the seller is contracting, and it will be the responsibility of the seller.
Speaker 8 | 01:19:09
Well. I'm not an environmental attorney, but from my experience in Prepa, a lot of these issues are not that evident when you start working somewhere. That's why you have to do some sort of due diligence.
I think it's... It may not be that difficult to be able to determine if something is pre-existing or something just occurred. So again, that issue I'm not so concerned about because we can work some sort of language which can be satisfactory to all of us.
Speaker 3 | 01:20:08
But what my colleague is trying to say is that we identified some structures that we are able to move if we need to place some of our equipment. And the concern of the team that was on the ground and I was on the ground as well is that some of those buildings may contain asbestos and other hazardous conditions.
That was a concern, and always saying is if it's a precondition, it's something that it doesn't fall on us. Obviously, it's not our fault that it's been there for years, and that's all.
Speaker 8 | 01:20:49
So. that can be worked around in terms of you can either include an exhibit, maybe insert some language into the contract in terms of the obligation on both parties to do some sort of due diligence and some walkthroughs prior to removing or moving anything from the site.
Right, so that there can be a recording of what is there, of the risks of the already existing conditions. So that you can go to bed a little bit easier. Okay? Yes, sure, that should not be a problem.
Okay, thank you. I'm sorry, guys, I just have to call Mariela. I just have to mention something to her regarding the letter she just mentioned a second ago. So, we'll be with you in less than a minute.
If I can find my mute button here. I mean, my quirk. Okay, here we are.
mgarcia@recomspr.net | 01:22:30
I'm sorry, guys. We don't have any background music to fill the space.
Speaker 6 | 01:22:39
Do you sing at all?
mgarcia@recomspr.net | 01:22:41
No, not well, everybody sings. I don't sing well, so I cannot help you with that. We have to incorporate language that any meeting after five needs to include Okay.
Speaker 3 | 01:23:15
Miguel. the good thing is that Thomas has become a Bad Bunny fan. He's got front-row seats to the concert this summer.
Speaker 6 | 01:23:22
Absolutely.
Speaker 3 | 01:23:23
Yes.
Speaker 5 | 01:23:24
Absolutely I wouldn't miss it.
Fabian Velez | 01:23:26
We'll see you there.
mgarcia@recomspr.net | 01:23:27
We'll see you there.
Speaker 3 | 01:23:29
There you go. There you go.
Fabian Velez | 01:23:35
[Laughter] Put Miguel's favorite artist, Michael Bolton.
mgarcia@recomspr.net | 01:23:38
We got something.
Speaker 6 | 01:23:42
Said said you would leave.
mgarcia@recomspr.net | 01:23:45
Someone swept.
He's taking this chance to catch up on all the comments.
Fabian Velez | 01:23:58
It is just to catch up from all the comies.
Speaker 8 | 01:24:08
Okay, we're back, there you go. Let's continue, please. Alright.
mgarcia@recomspr.net | 01:24:18
Late payments accrue interest at WSJ Prime plus 3%. We'd like to confirm align with public sector payment procedures or for.
Speaker 8 | 01:24:33
For the benefit of those in the room who may not know what WSJ Prime is and somebody cares to explain, please.
Speaker 6 | 01:24:47
That's the prime interest published by the Wall Street Journal.
Speaker 8 | 01:24:52
Okay, Wall Street Journal. Okay, thank you. Okay, and Y plus 3%.
Speaker 6 | 01:25:05
And you inserted that, but I think that's just sort of standard.
Speaker 8 | 01:25:10
Yeah, I mean.
Speaker 3 | 01:25:12
Again, it's something that we can speak about. I mean, it's not written in stone, but we can definitely have a conversation about that.
Speaker 8 | 01:25:21
Well, sure, that shouldn't deprive us of any sleep, actually, because we're not foreseeing. You can ask around in terms of power suppliers, in terms of fuel providers. If you want to look at our track record, even after being in bankruptcy, you can look around, you can ask around, and we've never let anybody hang out to dry. We do have certain issues with one of our private operators, but neither of them can say that their fixed fee has not been paid at some point or has been paid timely because it has. We've had issues regarding replenishing of service accounts, which are required through the contract for operation and maintenance of the system.
But that's a whole different issue because you know the revenue source for that. And part of the reason for that is because we've always paid our power suppliers and our fuel providers first, right? If there's no fuel, you can't generate power, and if there's no power, there's nothing to transmit and distribute.
So, our revenue source is the collection of debt. The fact that we have to pursue people who illegally connect to our system, which Prepa used to do in the past. We would recover millions of dollars from that and from reimbursement of federal funds for FEMA and HUD, except that our private operator has been way behind.
That's why they're the only ones who have to pay that price up to now, right? But we made sure that our suppliers, fuel power producers, they've always gotten paid on time. So this is not something that bothers me. I just wanted to have it clear.
Speaker 3 | 01:27:54
We. We appreciate that, but. Yeah, that again. That's something there that is up to discussion. It's nothing written and done.
Speaker 8 | 01:28:01
Okay, good to know.
Speaker 2 | 01:28:04
I think Mr. Ramil has his hand up. Does he have a comment, Francisco?
Speaker 10 | 01:28:10
Yes, just to make sure that I don't know if you have that info, but here in Puerto Rico, the legal interest rate is 6.6%. It is already established, kind of like in our ordinance and in our contracts.
So, it's great to have that Wall Street Journal prime rate, but we're probably in the negotiations going more for the legal interest.
Speaker 9 | 01:28:36
Is that the default interest rate or is it usurious to agree to a higher interest rate?
Speaker 10 | 01:28:43
Default interest rate.
Speaker 9 | 01:28:45
And we have that here too, but the reason I suggested that plus three is that right now, primes I think are at 6 something. It's really to give you an incive to pay a lower interest rate. People you unwillingly become the lender and you want to have a motivation to pay.
So it probably should say. If it doesn't say the, you know, the lesser of the legally permissible rate or the prime rate in case they that law there.
Speaker 8 | 01:29:19
Yeah, that's good. Yeah, but.
Speaker 9 | 01:29:21
But, if it's permissible to charge prime plus three, I don't think that's an unreasonable ask, but you all can talk about that.
Speaker 8 | 01:29:32
Okay? That will break the deal. Let's continue, please. Okay.
mgarcia@recomspr.net | 01:29:40
Sellers' red line allowed termination payment on default or convenience. We request clarification on how liability caps and remedies are structured.
Speaker 6 | 01:29:53
So specifically to the termination payment on the default for convenience. So, we talked about the termination payment earlier. That is essentially the balance of payments from terminations through the end of the term of the contract plus the utilization.
So, that is essentially all that is structured. The liability caps currently, believe, are uncapped liabilities on indemnity obligations. There are, let's see, trying to find the specific language that caps indemnities related to loss of power.
Well, excluded damages, consequential indirect damages, including lost profits, loss of power, but those are all.
Speaker 9 | 01:31:06
And I don't think we changed that. I think that was their language.
Speaker 6 | 01:31:09
That's their language. Yeah, thanks. Yeah. So, I think really the only thing we did was add the termination payment on terminations for convenience. I'm missing anything on that down.
Speaker 9 | 01:31:29
I think... So, I mean, we did add that if they default and it's terminated, then they have to pay the termination payment as well, so we treat that the same as is noted in that comment.
mgarcia@recomspr.net | 01:31:52
Okay, let's just... Any comments on that?
Speaker 8 | 01:31:58
Sorry, I missed part of that. I was reading again, can you please explain it to me again? Sorry.
Speaker 6 | 01:32:05
Yeah, all that we did was add this termination pay concept, right? Which is if you or the project terminates for convenience, then you owe a termination payment equivalent to the balance of payments due from the point of termination to the end of when the term would have naturally expired
plus the demobilization. That is true not only if you have a termination for convenience, but if there's a termination because the profit defaults on the contract.
Speaker 8 | 01:32:43
Okay, I'll have to review the termination for convenience terms, but we'll get back to you on that. We should move on.
mgarcia@recomspr.net | 01:32:54
All right, just one more. Then it proposes that cost increases from legal changes will not affect the price. We would like to confirm the location and funding implications.
Speaker 9 | 01:33:12
Well, we propose that they affect the price. Then, you got that the contract would be adjusted if there's a legal... I mean, if Puerto Rico comes in and says, "Hey, we're going to charge you X number of pennies per kilowatt that you're producing or make some change that hurts the seller, that the buyer would effectively... They'd be responsible for that." We'd change the price.
Speaker 8 | 01:33:47
That's okay.
mgarcia@recomspr.net | 01:33:51
That's fine. We just wanted clarification. Okay, is Marlaize there? Anything else?
Speaker 2 | 01:34:00
Well, I think that what proceeds is let's circle back with our management team and we'll let them know what we discuss here today. We will verify the information that you will be sending via email for clarification on our technical team. I don't know if you received an NDA. I haven't spoken with Favian today. We're going to be circling some NDS to start communications with Luma. We'll start the technical aspects and the interconnection because we don't want to be well behind in the technical side and advancing on the legal side.
If you have not received that, you will be receiving that, and as soon as you sign it, we'll start the conversations with the appropriate stakeholders. Does that make sense?
Speaker 3 | 01:34:48
Yes, it does.
Speaker 2 | 01:34:50
Okay, well, I think from my side.
Speaker 8 | 01:34:52
I my side, I want to thank you all for your time and effort. We really appreciate it, and I guess we'll be talking very soon.
Speaker 3 | 01:35:01
We thank you, Miro Santa. Thank you, Mariela. Thank you.
Speaker 2 | 01:35:07
Absolutely thank you, my expectations.
Fabian Velez | 01:35:09
Bye. Bye.
mgarcia@recomspr.net | 01:35:10
Thank you.
Fabian Velez | 01:35:11
Thank you.
Speaker 3 | 01:35:11
Thank you.
Speaker 2 | 01:35:13
Be he.