BY ELECTRONIC MAIL 

June 7, 2022 

Richard Cruz Franqui 

General Counsel

Puerto Rico Electric Power Authority

Re: Puma Fuel Oil Purchase Contract Amendment

Dear Mr. Cruz Franqui: 

In accordance with the contract review policy of the Financial Oversight and Management Board 

for Puerto Rico (“FOMB”) established pursuant to Section 204(b)(2) of PROMESA (the “Policy”), 

we have reviewed the proposed amendment to the Fuel Oil Purchase Contract between the Puerto 

Rico Electric Power Authority (“PREPA”) and Puma Energy Caribe (the “Proposed 

Amendment”). 

After reviewing the Proposed Amendment, the FOMB concludes “Approved with Observations.” 

Observations related to the Proposed Amendment are set forth in Appendix A attached hereto. 

Our review is solely limited to compliance of the Proposed Amendment with Section 204(b)(2) of 

PROMESA, which seeks to ensure proposed contracts promote market competition and are not 

inconsistent with approved Fiscal Plans. For the avoidance of doubt, the review performed by the 

FOMB does not cover a legal review of the contractual documentation or the contracting process, 

including without limitation: (i) compliance with contracting requirements under applicable laws, 

rules, and regulations, both federal and local; and (ii) compliance with applicable laws, rules, and 

regulations governing procurement activities, both federal and local. In addition, the FOMB has

not engaged in any due diligence or background check with respect to the contracting parties nor 

whether the contracting parties comply with the requirements under the applicable contract. Any 

material changes to the Proposed Amendment or the original contract must be submitted to the 

FOMB for review and approval prior to execution. 

This letter is delivered as of the date hereof and we reserve the right to provide additional 

observations and modify this letter based on information not available when the review was 

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Exhibit D Page 1 of 4
Mr. Cruz Franqui

June 7, 2022

Page 2 of 2

conducted. In addition, during the course of our review, we may receive information which we 

may refer to the relevant authorities. 

This letter is issued only to PREPA and solely with respect to the Proposed Amendment.

Sincerely,

Jaime A. El Koury

General Counsel

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APPENDIX A

(Page A-1)

PUERTO RICO ELECTRIC POWER AUTHORITY – PUMA ENERGY CARIBE, LLC

Fiscal Plan Alignment

This review covers the proposed amendment to the Fuel Oil Purchase Contract (the “Contract”)

between the Puerto Rico Electric Power Authority (“PREPA”) and Puma Energy Caribe, LLC

(“Puma”) (the “Proposed Amendment”).

The Contract stemmed from a competitive procurement process awarded on September 22, 2021

and contemplates the supply and delivery of residual No. 6 Fuel Oil (“HFO”) for the San Juan, 

Palo Seco, Aguirre and Costa Sur steam plants (together, the “Units”) via barge vessel or 

pipeline transfer. Notably, the Contract was approved by the FOMB on October 21, 2021. 

The Contract has a term lasting one year from the date of execution, on October 29, 2021, with an 

optional one-year extension to be exercised at the sole discretion of PREPA and under the same 

terms and conditions as the Contract at least 120 days before its expiration.

1 Within this initial 

contract term, HFO shall be delivered to the Units at a rate of up to 1,650,000 barrels per 

month, with the price to be paid for each barrel of HFO consisting of an escalator plus a fixed 

price differential, otherwise known as an adder, of $2.88. Accordingly, the approximate total 

cost established in the Contract is $605,923,692. Moreover, the Contract allows PREPA to 

purchase 25% of HFO from other suppliers if it identifies market sources with lower pricing. 

The First Amendment to the Contract was executed on December 31, 2021, and modified the 

formula used to establish the Contract’s escalator due to recent changes in the way market price is

calculated and reported by Platt’s Oilgram Price Report. Notably, the First Amended was not 

submitted to the FOMB for review and approval in contravention of our contract review policy 

(the “Policy”). We remind PREPA that (i) the Policy applies to all contracts or series of related 

contracts, inclusive of any amendments, modifications, or extensions, with an aggregate expected 

value of $10 million or more, and (ii) PREPA must submit any amendments, modifications, or 

extensions to contracts exceeding the $10 million threshold regardless of their amount, to ensure 

compliance with the Policy.

The Proposed Amendment modifies the Contract’s approximate cost to reflect recent fuel cost 

hikes that have incremented the Contract’s escalator, principally due to the current international

state of affairs and market conditions. Specifically, the Proposed Amendment increases the 

Contract’s approximate cost by $959,407,755, from $605,923,692 to $1,565,331,447, without 

altering the adder ($2.88) established in the original Contract. 

PREPA has certified that (i) the increase is a pass-through expenditure with no budgetary impact, 

and (ii) the funds to pay for the Proposed Amendment are unrestricted, unobligated and available 

without future encumbrances or restrictions, and will not be obligated except for the payment of 

the Proposed Amendment. Payments will be charged to PREPA’s budget account number 1-2321-

23215-000-000. 

1 We remind PREPA that, in the event it intends to execute any optional extension allowed under the Contract, such 

extension must be submitted for review and approval prior to execution, in accordance with the FOMB’s contract 

review policy.

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APPENDIX A

(Page A-2)

PREPA is expected to inform the FOMB of any budgetary differences other than those specified 

in Appendix A (Contract Submissions Questionnaire) and to request a re-review of the Proposed 

Amendment should any changes occur.

This contract review was conducted on the basis of information submitted by PREPA. The FOMB 

has not independently verified the information included in the submission. Should the FOMB 

become aware of any inaccuracies or misrepresentations – whether intentional or not – it would 

re-evaluate its assessment. 

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