La Fortaleza: Prepa restructuring agreement can’t stop governor from removing board members
SAN JUAN – La Fortaleza’s Public Affairs secretary, Ramón Rosario, said the Puerto Rico Electric Power Authority’s (Prepa) restructuring agreement will not stop the governor from removing any of its current governing-board members.
“No agreement can force us to renounce our power to legislate. You cannot say through a contract that you will not change this through legislation. Therefore, no agreement can force us to keep a specific board,” he said.
Caribbean Business sources said Prepa’s bondholders are opposing the administration’s attempts to change the composition of Prepa’s board to include public officials because it reverses efforts to depoliticize the public corporation and have a more “professional” board. The current board was appointed last year by the governor following recommendations from a search firm.
The House approved Tuesday a measure to change the board, which will now go to the Senate and aims for Gov. Ricardo Rosselló to integrate the Puerto Rico Fiscal Agency and Financial Advisory Authority’s (FAFAA) president, the Economic Development & Commerce Department (DDEC) secretary, and the chairman of the Public-Private Alliance Authority (APP) in Prepa’s Governing Board.
Currently, the law establishes that the Governing Board comprise nine members, six of whom are named by the governor and require the advice and consent of the Senate.
With the approval of H.B. 475, only three of the six members designated by the governor must be approved by the Senate and the remaining three would be executive branch officials. The legislation would also eliminate the board’s compensation.
Rosario said the current board is an obstacle toward the implementation of energy reform and that, for that reason, the governor exercised his constitutional right to remove it so Prepa can become a tool for economic development and to strip members of their “excessive” salaries.
“They are there once a week and have salaries that go from $60,000 to $70,000. That’s something we can’t have,” he said.
Regarding as to whether the changes to the board were discussed with Prepa’s creditors, Rosario said FAFAA has made efforts to deal with the utility’s debt problem but that the current board has been hindering efforts for the entity to seek a better debt restructuring deal. The current restructuring deal with 70% of Prepa’s bondholders cuts the $9 billion debt by 15%.
“In that sense, the creditors have been told it is an obstacle and that it will be resolved…. Maybe they are not happy,” he said, suggesting that La Fortaleza was moving on with efforts to remove the current board despite creditor objections.
-By Eva Lloréns Vélez and Luis J. Valentín