Tuesday, May 26, 2020

Energy Commission Rules Prepa Must Submit at Least two Options for Rates

By on May 12, 2016

SAN JUAN—The Puerto Rico Energy Commission has determined that the Puerto Rico Electric Power Authority (Prepa), the island’s electric utility, must provide to the panel “at least two alternatives” for the implementation of provisional electricity rates, including one for each customer class.

A provisional rate is defined as a temporary base rate that is authorized and approved by the Commission as part of a rate review case. Prepa is slated to submit on Friday its request for a hike in the utility’s base rate as part of the process for the restructuring of its $9-billion debt, as agreed with bondholders.


Puerto Rico Electric Power Authority central offices in Santurce

In a ruling Thursday, following a clarification requested by Prepa, the three-member Energy Commission said that the first alternative for a provisional rate “must contemplate the application of a uniform percentage change in base rate across all customers”.

The second alternative must contemplate “the application of a specific percentage change in base rate for each customer class, provided that said percentage change must be applied uniformly within each class.”

The commission said all alternatives must be accompanied by an explanation detailing the implementation, administration and impact on existing base rates and any other pertinent information.

It also ordered Prepa to provide alternatives for a mechanism for the utility to track, credit or collect from customers the difference between the provisional rate and the permanent rate.

The utility has not changed its base rates since 1989. The rates for residential customers are $4.35 for the first 4.25 cents per kilowatt-hour (kWh) of consumption and 4.97 cents per kWh for anything above that. The rate includes a fixed rate of $3, while the rates for commercial and industrial customers are higher and they vary.

In a separate process, Prepa is also seeking the commission’s approval of a transition charge that will be used to pay for the restructuring and of an integrated resource plan.

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