Energy Negotiator orders external audit after identifying “multiple inconsistencies” in EEA data

The process of purchasing, acquiring, transporting, storing and consuming fuel in the Electricity Authority (AEE) has been the subject of an external audit for the past three years, after the public corporation submitted to the Puerto Rico Energy Negotiation information with “multiple inconsistencies” that the regulatory body could not reproduce or validate.

The audit is being conducted by Arizona-based law firm Larkin & Associates, and is due to conclude “sometime this year,” Angel Rivera de la Cruz, one of the negotiator’s associate commissioners, said yesterday.

“We need to ensure the healthy operation of the Authority and we decided that it was prudent to conduct a fuel audit. Apart from the inventory and the financial, we will look at other processes that the Authority has to determine if they are efficient. and they are within the rules and practices of what needs to be done, ”Rivera de la Cruz told El Nou Dia.

The Negotiator recommended the audit on September 29, when it had before it the reconsideration of the adjustment clauses for fuel purchases for the period from June to August 2020. By law, the EEA must submit quarterly to the negotiated its projections of income and expenses adjusted to the price of the barrel of oil. The regulatory body reconciles the figures submitted by the EEA.

By then – and still – the price of a barrel of oil had not recovered from the fall in the COVID-19 pandemic in April. However, the EEA reported that it bought fuel at the rate of $ 102 per barrel for the San Juan plant and $ 76 for the Pal Sec plant. According to Rivera de la Cruz, these figures “are inconsistent with the prices that were being seen in the market” at the time ($ 59 per barrel).

“When the authority made its filing, it requested a $ 91,600,000 reconciliation for fuel purchase. But if it presented higher-than-expected costs, the difference may be less.” , he said, after noting that the Negotiated has not yet decided on the conciliation for June, July and August 2020.

In the meantime, the Negotiator approved, on November 20, a resolution and order formalizing the audit and informing that it would be conducted by Larkin & Associates. The regulatory body demanded “full cooperation” from the EEA.

“The Negotiator opened an investigation case and covers the fiscal years 2018, 2019 and 2020. It is an extremely complex audit, with a lot of information to be handled. We have already made several information requirements to the Authority and “We are in the process of analyzing this first wave of information to determine what else is needed to complete the process,” Rivera de la Cruz said.

Due to the pandemic, the work is done remotely.

In a separate interview, EEA Executive Director Efran Parets confirmed that there were already two meetings with Larkin & Associates staff as part of the audit. “I’m open to any audit, because part of my job is to see things done the way they should be. We’re cooperating,” he said.

Parets attributed the “multiple inconsistencies” identified by the Negotiator to a delay in data entry time on the internal Asset Suite platform, which affected the price of a barrel of oil. “I don’t think there is a problem beyond the accounting reconciliation of the matter,” he argued.

He added that, as a corrective measure – and simultaneous with the audit – he ordered “the development of a data entry protocol in our accounting base, in the fact that plants can report both barrels of fuel that come in like costs. ” As part of this protocol, data must be entered into Asset Suite daily, instead of every 72 or 96 hours (three or four days).