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Bill would eliminate wages for Prepa Governing Board members

By on March 7, 2017

SAN JUAN – The bill that proposes eliminating the salary of Puerto Rico Electric Power Authority (Prepa) Governing Board members was rejected Tuesday by the president of that entity, Luis Benítez, and Prepa Executive Director Javier Quintana, as both argued it is a threat to the public corporation’s professionalism and management.

In a public hearing before the Senate’s Government Committee, presided by Sen. Miguel Romero, Prepa’s chairman established that the utility’s agreement with bondholders included the board’s depoliticization, which is why the entity hired independent individuals with deep knowledge of the energy industry.

“The changes in Prepa’s administration were well-thought-out and -weighted, which were required by creditors and are tied to the agreement with creditors, known as the Restructuring Support Agreement. Thus, any amendment made unilaterally to the decrees of Act 4-2016, with respect to its governance, would undermine the credibility and trust reached between the parties and could represent noncompliance of the agreement,” Benítez argued.

Sen. Miguel Romero leads public hearing on bill to eliminate wages to Prepa Governing Board members. (Limarys Suárez/CB)

Sen. Miguel Romero leads a public hearing on the bill to eliminate Prepa Governing Board members’s salaries. (Limarys Suárez/CB)

The Prepa governing board chairman expressed his opposition to designating elected officials to the entity, stressing that the precedent is for them to be absent to meetings and voting processes.

House Bill 475, which is now before the Senate’s consideration after being approved in the lower chamber, amends Prepa’s Law to reorganize its Governing Board to prohibit paying a salary to its members, while fixing a maximum $30,000 for stipends and/or reimbursements.

Why is your recommendation for the board to not include ex officio members, who are the people who occupy government seats, the committee chairman asked Benítez.

“I spent time with several ex officio members and I am recommending not to include them because Prepa requires daily involvement in board affairs; voluminous information is worked with constantly, and each member works 60 hours or more a month. The issue with elected officials is that, due to their responsibilities, they end up assigning someone who doesn’t can’t vote and represent them on the board, and here at Prepa we require that for the sake of the processes’ continuity there should be involvement that, in my understanding, ex officio members don’t have,” he responded.

See also: New Regulations to hasten interconnection to Prepa grid

According to the bill, Prepa’s governing board will be comprised by nine members, including three people who will be named by the governor; Fiscal Agency & Financial Authority Act (FAFAA) Director Gerardo Portela; Economic Development Secretary Manuel Laboy; and Public-Private Partnerships Authority Executive Director Omar Marrero.

“Prepa ended up in a crisis because of ex officio members who were absent to meetings because they didn’t have time,” Benítez said, adding that the board’s duty is to enact the government’s public policy, and its members are focused on that direction.

For his part, Prepa’s executive director warned that the bill could jeopardize the utility’s agreement with bondholders, which is why he recommended the Senate Government Committee request FAFAA to consult with creditors.

“Prepa must abstain from endorsing or promoting any legislation that is inconsistent with the restructuring plan. The agency must operate with the highest efficiency, and that is why it was agreed that the board should be configured to view Prepa as a business, and its members should be experienced in energy companies in the Caribbean and the United States,” Quintana explained.

Sen. Aníbal José Torres, a Popular Democratic Party spokesman in the Government Committee, emphasized that the board’s professionalism was one of the requisites in Prepa’s agreement with bondholders.

See also: Higher Rates Possible Without Investment Grade In Prepa Bond Exchange

“As drafted, the bill doesn’t indicate that Prepa’s Governing Board members’ salaries are a problem. This is a smoke screen to change a professional governing board in Prepa to a board that responds to the governor’s interests. [The administration] wants to politicize Prepa again,” Torres denounced.

After listening to testimony, Romero said “there is no problem here with following the Government’s melody,” and what should be assured is to “not follow parties’ melodies.”

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