US grants permit for project to bring power to Puerto Rico from Dominican Republic, developer says

By Laila Kearney

Feb 27 (Reuters) - The U.S. Department of Energy has granted a permit for a $2.5 billion power project to send electricity to Puerto Rico from the Dominican Republic, the company leading the development told Reuters on Friday, adding that this will be the Caribbean's first cross-border energy facility.

Puerto Rico has been plagued with widespread power outages since Hurricane Maria decimated the island's electrical grid nearly a decade ago in one of the deadliest storms in America's history.

"We're extremely excited about obtaining the presidential permit," said Rafael Vélez, president of Puerto Rico-based investment firm Atabey Capital, which is the founding investor and principal partner for the project's developer. "It's like the first green light of the project in terms of permits."

The Caribbean Transmission Development Company is the developer of the planned facility, Project Hostos, which will be privately funded.

As part of Project Hostos, a 500-megawatt combined-cycle natural gas-fired power plant will be constructed in San Pedro de Macoris, Dominican Republic. The generating station would send power through three separate power lines: a 90-kilometer cable from the plant to the coast and a 150-kilometer submarine cable stretching across the Mona Passage waterway, linking the Dominican Republic to Puerto Rico.

The final stretch of power lines is a 6-kilometer cable from the port of Mayaguez in Puerto Rico, which would be largely underground, and finally connect to the Puerto Rico grid.

The project would be able to provide enough electricity to power roughly 600,000 homes in Puerto Rico, or more than one-third of the island's residences. It is expected to be up and running in 2031, Vélez said.

The Department of Energy issued its presidential permit for the cross-border portion of the project, allowing CTDC to move forward with other permits and a power purchase agreement with the main Puerto Rico utility.

Storms in 2017, including Maria, caused the deaths of some 3,000 people and wiped out large swaths of the island's infrastructure. Power remained down in some parts of the island for nearly a year.

By adding stability to Puerto Rico's power system, Vélez said he hoped Project Hostos would spur the area's economic activity.

"In Puerto Rico, you cannot talk about economic development without electricity," he said. "What we lived through with Maria -- months without electricity -- it was like we were back in the Stone Ages."