Thursday, December 8, 2022

Customers have Until Aug. 19 to Challenge Prepa’s Restructuring

By on July 7, 2016

The Puerto Rico Energy Commission gave the public until Aug. 19 to challenge in court the validity of the Puerto Rico Electric Power Authority’s restructuring.

On June 28, 2016, Puerto Rico Electric Power Authority Revitalization Corporation approved Resolution No, 2016-2009  authorizing the issuance of Restructuring Bonds in a total principal amount that should not to exceed $9.6 billion, and which will be comprised of a combination of various types of bonds.

In connection with the issuance of the Restructuring Bonds, the Corporation will impose Transition Charges of 3.1 cents per kilowatt hour for all Puerto Rico Electric Power Authority customers based on application of formulae approved in the Restructuring Order, beginning immediately after the issuance of the Restructuring Bonds.

“Notice is hereby given that any party interested may, not later than August 19, 2016, appear and contest in the San Juan Part of the Court of First Instance, the legality or validity of the aforementioned Restructuring Resolution and any matter related thereto. No court shall have jurisdiction over any such action relating to the challenge to or validity of the Restructuring Resolution if such purported action is filed after the date specified in the preceding sentence,” the notice published Wednesday reads.

Any interested party, including any customer of the Authority, may appear and contest before the Court, the following matters:

1) the validity of the Restructuring Order, the issuance of the Restructuring Bonds by the Corporation, including provisions for the payment of the Restructuring Bonds, the validity of the Restructuring Bonds, and of the outstanding debt of the Authority that may be refinanced, retired, or defeased through the Restructuring Bonds, the creation of the Restructuring Property, and the validity of the formula or formulae used to establish the amount of such Transition Charges for each Customer class, including the allocation of Financing Costs among Customer classes;

  1. the validity and applicability of the Transition Charges and the Adjustment Mechanism and the revocability of the Corporation’s right to impose and collect Transition Charges;
  2. that neither the issuance of the Restructuring Bonds (including the use of such Restructuring Bonds by the Authority to defease its outstanding debt) nor the amount of the Transition Charges results in the breach or impairment of any contract or agreement executed between the Commonwealth or the Authority and the bondholders or other creditors of the Authority, any fraudulent conveyance or any taking of property by the Commonwealth without just compensation or is otherwise subject to annulment or rescission; and
  3. any or all other matters relating to the foregoing, including any matter of United States or Commonwealth Constitutional law.

“If you are an interested party and you do not contest any of the matters described in this notice in the above-described proceeding, you may be prevented or precluded in the future from contesting such matters. In addition, if a final judgment is entered, it may enjoin interested parties from raising any issue that could have been raised in the above-described proceeding, and as to which the judgment is binding and conclusive,” the notice reads.

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