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Governor considers privatizing Puerto Rico electric utility

By on August 31, 2017

SAN JUAN – Despite the public dispute between Gov. Ricardo Rosselló and fiscal control board Chairman José Carrión III about cutting public sector work days, there is something in which they seem to agree: to put the Puerto Rico Electric Power Authority’s (Prepa) privatization on track.

However, regarding the board’s criticism of Act 47 of 2017, which would give patients greater say when it comes to filing health plan complaints, the governor said an estimate of the law’s economic impact will be provided. The board says the legislation does not align with the fiscal plan.

Fiscal board focused on privatizing Puerto Rico electric utility ‘as soon as possible’

The governor said Thursday that the privatization or “outsourcing” of Prepa services, such as energy production, is being considered by the government and will possibly implemented.

“Everything we believe the private sector can do more effectively, everything we believe can be done by non-profit organizations more effectively and that allows the government to be more focused and more effective, we are going to consider and we will carry out,” the Rosselló replied when asked about the public corporation’s privatization.

The issue came about because Carrión said in a NotiUno radio interview that the focus of the board and the revitalization coordinator, Noel Zamot, is “to privatize Prepa as soon as possible,” as it is an “economic development issue to have access to electricity at a reasonable cost.”

The governor said that he has been “clear” that his administration is evaluating government-provided services to be transferred to the private sector or to non-profit entities to reduce costs and improve their quality.

“Regarding privatization and outsourcing, I have been clear since the beginning. Our government is identifying how we can outsource services, how we can go to the private sector. We already have seven APPs [Spanish initials for private public partnerships] that we are [evaluating] for this next fiscal year [2019], “said Rosselló Nevares.

Act 47’s impact assessed

On Wednesday, the fiscal board sent a letter to the government indicating that Act 47 is “significantly inconsistent” with the certified fiscal plan because its economic impact that could reach $85 million.

The governor defended the legislation because “it was good…public policy for Puerto Rico” and was framed by the “new health model we are going to implement.”

“We will be sending [the board] our analysis and, of course, the board will have to make a determination about it,” the governor said without going into detail when it would be sent.

The government must deliver its estimate within seven days after the patient’s advocate issues the corresponding regulation, as provided by Act 47. If the requirement is not met, the board reserves the right “to take such actions as we deem necessary […] including preventing the application or validity of Act 47.”

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