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House makes way for multimillion-dollar aid for Puerto Rico power utility

By on January 26, 2018

SAN JUAN – The Puerto Rico House of Representatives followed in the footsteps Friday of its sister legislative body by approving a resolution to provide $630 million in aid to the Electric Power (Prepa) and the Aqueduct & Sewer (Prasa) authorities, to address their liquidity crisis until the end of the current fiscal year.

Joint Senate Resolution 196, approved Thursday, stipulates that public corporations’ operational expenses that may be covered under this measure are, among others, “employee payroll expenses, purchases of fuel and energy, materials” and operational equipment.

Senate President Thomas Rivera Schatz said Thursday during discussion of the resolution that the legislation from La Fortaleza was “deficient,” with problems of a legal nature, and “did not have the transparency that should permeate all transactions” of the government.

House Speaker Carlos “Johnny” Méndez (Yoel Parrilla / CB)

According to the resolution, which will be valid until June 30, the Treasury secretary will be the official in charge of authorizing assistance to public corporations “to cover operational expenses.” The Office of Management & Budget must identify the budget items.

Regarding the period for the law’s validity, House Speaker Carlos “Johnny” Méndez stressed it is established so as to not provide a “blank check” to the administration of Gov. Ricardo Rosselló. If additional help is needed, “they have to come to the Legislative Assembly.”

Popular Democratic Party minority Rep. Luis Vega Ramos said the resolution provides “what little remains of the General Fund,” which he said was around $500 million, to “lend beyond what it has” and also recalled that the government’s payroll requires about $300 million.

“If they lend the existing $500 million, there’s no money for the payroll,” he said.

Puerto Rico Senate passes resolution to provide liquidity to water, power utilities

The spokesman of the Puerto Rican Independence Party (PIP), Rep. Denis Márquez said “the budgetary impact it is going to have on agencies and creditors” is unknown. He added that the resolution does not make clear “if the assigned funds are really going to be there.”

On Wednesday, the Senate rejected the executive branch’s bill to provide liquidity to Prepa and Prasa, which raised questions about the governor when he demanded action by the Legislature on the matter, and said that Prepa’s operations would be interrupted if it doesn’t receive a cash injection.

Currently 68% of the power utility’s customers have service, while energy generation is at 82.9%, according to government data. Prasa is providing service to 97.36% of its customers.

Municipalities closer to hiring grid-repair crews

House Bill 1380 was also passed. It proposes to amend the Autonomous Municipalities of Puerto Rico Act, to allow towns to hire Prepa and Prasa brigades during an emergency period such as the one caused by the Hurricane Maria in September.

“[Prepa] will have to certify such repairs–of the municipality evidencing that it made them in accordance with the prevailing standards in the industry or according to [Prepa] specifications–so it can benefit from those reimbursements or available aid,” the measure reads.

Authored by Speaker Méndez and Rep. José “Quiquito” Meléndez, does not force mayors to accept the proposal, but allows them to “voluntarily carry out all the relevant procedures” to restore both services in their towns.

The measure now goes to the Senate for consideration, without public hearings. PIP’s Márquez had previously mentioned to Caribbean Business the need for the measure to have public hearings, due to the impact of the changes it proposes and Prepa’s position remaining unknown.

Márquez said the bill “will not have the support of this legislator,” because “Puerto Rico’s electricity system is not divided into 78 municipalities. […] It’s a unified electrical system.” He added that a process planned jointly with Prepa is necessary.

“It’s good that [Prepa] receives help from the municipalities. But in an orderly, planned way, ensuring the health and safety of the people who work there, and cannot be with a blank letter, an open letter to the municipalities,” Márquez said on the House floor.

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