Puerto Rico fiscal board says federal law gives it purview over power utility restructuring
SAN JUAN – Puerto Rico’s Financial Oversight and Management Board (FOMB) reminded the court Tuesday that it has ruled that it has no jurisdiction to review the type of challenge to board determinations such as the one brought by the Puerto Rico Energy Commission (PREC).
“PREC is improperly seeking to inject itself into a process that Promesa [federal law] commits to the Oversight Board’s sole discretion; and PREC is seeking an impermissible advisory opinion about what types of things the FOMB (Board) can and cannot put in certified fiscal plans,” the fiscal panel said.
“The fact that PREC does not have a chance of prevailing on its claims and has not shown any irreparable injury does not mean that the Oversight Board believes that PREPA [Puerto Rico Electric Power Authority] should not have a strong, independent regulator. To the contrary, the Oversight Board has always maintained that such a regulator is needed. But an independent regulator still does not have the right to dictate to the Oversight Board how Prepa should be restructured under PROMESA,” the board added.
PREC sued the fiscal board and the public power company Sunday to reassert its authority over the utility. Prepa’s fiscal plan proposes actions that affect the island’s electric power policy in matters of power supply mix, capital and operating expenditures, internal operations, revenue requirements and rate design, all of which lie within the energy commission’s purview under the law, the regulator says.
Its complaint requests the court to declare that the fiscal board can neither mandate nor authorize Prepa to take actions that infringe on PREC jurisdiction.
“Prepa has submitted this Fiscal Plan to FOMB without presenting its substance to the Commission for its review—a review necessary to determine whether the proposed actions are consistent with Commonwealth statutes, as interpreted and applied by the only agency legally authorized to interpret and apply those statutes. FOMB has declined to provide the document to the Commission,” the energy regulator’s legal recourse reads.
A clarification from the court, PREC argues, would result in the fiscal board dropping “its unexplained, nine-months-long resistance to collaborating with the Commission to create sensible decision-making protocols” the regulator said would make effective use of each entity’s legal powers.
Although the fiscal board asserts it has the power to mandate or authorize Prepa activities, thus influencing power restoration efforts on the island, utility operations and the sought after transformation of Puerto Rico’s electric industry, its position conflicts with the commission’s duties, PREC reiterated.
“Both the assertion and application of that power (as FOMB sees it), and the resulting legal uncertainty, is currently, and will continue to be, harmful to the Commission, PREPA’s electricity customers, existing and future bondholders and the public interest,” the commission wrote.