A delay of several weeks in deliveries of liquefied natural gas (LNG) forced Puerto Rico to burn diesel to sustain electricity generation, a substitution estimated to have cost about $32 million for residents and businesses between September 16 and October 12, 2026, according to estimates from the Puerto Rico Electric Power Authority (PREPA (AEE), or PREPA). Diesel costs more than LNG, and its unplanned use raises pressure on generation costs, with possible repercussions for households, businesses and industries.
The dispute centers on a contract between PREPA and NF Energía LLC (NFE), in force since December 2025 and approved by the Oversight Board. The agreement aims to guarantee LNG supply to power plants. A central provision requires NFE to allow LNG deliveries by outside suppliers through its port facilities when the company cannot supply the fuel.
In those circumstances, an agreement must be formalized with an alternate supplier under the tolling term sheet included in the contract. For the Oversight Board, this mechanism was an indispensable condition for approving the agreement. Its aim is to keep a commercial dispute or a failure by one party from interrupting access to fuel the electric system needs.
Having more than one supply source can reduce exposure to costlier substitute fuels, encourage competition and limit costs that ultimately fall on consumers and businesses. The Board said it will back PREPA and the Public-Private Partnerships Authority in their efforts to enforce the contract. It also announced it will work with the government to bring the relevant parties together and coordinate measures to prevent future interruptions.