Puerto Rico Electric Power Authority granted rate hike postponement
SAN JUAN – The Puerto Rico Energy Commission (PREC) has granted the Puerto Rico Electric Power Authority’s (Prepa) request to postpone until Oct. 1 a permanent rate hike that was slated to go into effect this month.
Meanwhile, the provisional rate PREC approved in 2016, of 1.299 cents per kilowatt-hour (kWh) will continue in effect until the permanent rate goes into effect in October, but the commission urged Prepa to consider filing a request for it to modify the provisional rate so it is consistent with the $171.7 million base revenue deficiency identified by the regulatory panel early this year.
That revenue gap will be closed if Prepa seeks a modification to the provisional rate to lower it to 0.9948 cents per kWh.
“The modified provisional rate would enter into effect on August 1, 2017. In between the time in which the modified provisional rate enters into effect and the time the permanent rate is finally implemented, Prepa would determine the exact amount to be reconciled, based on the difference accumulated between the original provisional rate (1.299 ¢/kWh) and the modified provisional rate (0.9948 ¢/kWh),” PREC said.
In January, PREC had authorized a permanent rate hike of 1 cent per kWh, which is lower than the provisional hike of 1.299 cents per kWh. After going through certain procedural matters, including a compliance filing, PREC ordered Prepa in May to implement the new rate on July 1.
The public power utility asked PREC for an extension in June, arguing it lacked the internal resources to implement the permanent rate and that such tasks require renewing Prepa’s contracts with Oracle Corp.
Prepa further said other events delayed its ability to implement the permanent rate, including that its rates weren’t approved until May 31, that the Office of Management and Budget (OMB) delayed the approval of Oracle’s contract renewal by several months, and that the utility is experiencing personnel shortages in the information technology and customer service departments.
The PREC order was issued even though the governor signed a law in April that created a commission made up of the Treasury secretary and the heads of the OMB and the Fiscal Agency and Financial Advisory Authority to modify utility rates in accordance with the government’s fiscal plan.
Currently, Prepa is also without a governing board after it was dismissed, but the governor appointed three new members in late June.