La Fortaleza, San Juan, Puerto Rico — December 4, 2025 — Governor Jenniffer González-Colón has secured final approval from the Financial Oversight and Management Board for Puerto Rico (FOMB) for the new natural gas supply agreement with New Fortress Energy (NFE).
“This new agreement that we negotiated with NFE, and that the FOMB approved today, forms part of the broader energy transformation we are advancing. It includes diversifying our energy sources and ensuring continuity of supply, among other measures, to stabilize the system and ultimately deliver lower electricity costs for residents and businesses,” said the Governor.
On Friday, November 28, the FOMB issued a conditional approval of the new contract negotiated by the Governor, requiring the Government to revise the Liquefied Natural Gas (LNG) Tolling Term Sheet for greater clarity. The following day, Saturday, November 29, Puerto Rico Energy Czar and Executive Director of the Public-Private Partnerships Authority (P3), Josué Colón, addressed the condition.
Today, Thursday, December 4, the FOMB granted its final approval to the agreement, which earlier this week was described by the Governor’s Chief of Staff and Executive Director of the Fiscal Agency and Financial Advisory Authority (AAFAF, for its Spanish acronym), Francisco Domenech, as the “result of months of rigorous technical work. The Government insisted on better terms, stronger guarantees, and reasonable costs. The people of Puerto Rico deserve an energy system that is stable, reliable, and economically sustainable, and this agreement brings us significantly closer to that goal.”
“The technical, fiscal, and operational results of this agreement place us in a stronger position for the transition to a modern, resilient system aligned with Puerto Rico’s strategic interests. This is a critical step toward system stability,” stated Puerto Rico Energy Czar Josué Colón.
The new agreement, negotiated under the Government of Puerto Rico’s current energy policy, is expected to substantially reduce energy costs, lessen electricity rate impacts, and shorten contract duration, resulting in savings that will directly benefit ratepayers.
In summary, this agreement completely replaces the commercial terms proposed by NFE in the original mid-2025 proposal, which included a 15-year term, contractual exclusivity, and an estimated cost exceeding $20 billion.
Key benefits of the approved agreement include:
1. Reduced Contract Term and Cost
The new contract has a base term of 7 years, with an optional 3-year extension, less than half the length of the previous proposal. Its estimated cost is approximately $4 billion, representing direct savings of $16 billion compared to the original proposal.
2. More Competitive Pricing that Lowers Energy Costs
The Government successfully negotiated substantial reductions in charges:
o Temporary units: Reduced from $10.29 to $7.95, a 22% decrease.
o San Juan Units 5 and 6: Maintained at $6.50, consistent with the 2019 contract rates.
Based on this new pricing structure, estimated savings compared to current contracts include:
o Over $54 million in annual savings (22% reduction).
o Over $375 million in cumulative savings during the contract term.
These savings will directly benefit all customers by lowering generation costs.
3. Elimination of Exclusivity
The agreement removes the exclusivity clause that previously restricted supplier diversification. Puerto Rico will now be able to diversify natural gas supply across multiple facilities, ensuring continuity of service in the event of an NFE supply interruption.
4. Enhanced Consumer Protections
The new contractual framework incorporates significantly stronger legal protections than those included in the 2018 and 2019 agreements. It safeguards Puerto Rico’s interests even in scenarios involving bankruptcy or receivership by ensuring the Government’s right to continue using the terminal, regasification facilities, and natural gas distribution infrastructure. This dramatically reduces litigation risk, prevents supply disruptions, and ensures operational stability even under adverse financial conditions.
If NFE is unable to supply natural gas, the Government of Puerto Rico will be able to use the San Juan terminal—operated by NFE since 2018, under a lease agreement with the Puerto Rico Ports Authority—through a Tolling Agreement at $0.50/MMBtu, ensuring natural gas supply and uninterrupted operation of the generation units.
