Measure to provide liquidity to Puerto Rico power utility left for ‘future discussion’
SAN JUAN – After extensive debate Wednesday, the Senate left for “future discussion” a measure that would allow Puerto Rico’s Electric Power (Prepa) and Aqueduct & Sewer (Prasa) authorities to obtain lines of credit or loans to avoid an interruption of operations while recovering from the crisis caused by Hurricane Maria.
Senate Bill 806 establishes that “the Office of Management & Budget will determine the budget items where the capital will come from” to provide the so-called emergency assistance. The Treasury secretary will be in charge of authorizing liquidity loans.
Before decreeing a two-hour recess, Senate President Thomas Rivera Schatz warned, “For my part, [SB 806] will undergo substantial amendments.” However, the measure was not addressed during the session and, instead, a recess was decreed until Thursday at 1 p.m.
Rivera Schatz indicated the bankruptcy-like Title III process underway for both public corporations under the federal Promesa law “imposes restrictions and controls on those corporations that we cannot ignore–we, as the Legislative Assembly or the executive. In that spirit, SB 806 is pending future discussion, to determine if we can [pass it].”
“If it were necessary to approve a joint resolution for the payment of fuel, so there are no generation problems, we have no problem coming and approving it so [Prepa] does not run out of fuel and can provide the energy service,” Rivera Schatz told the legislators.
The measure was filed by the governor’s office last week after it was announced the federal government established a cash flow policy to disburse the island the $4.7 billion loan approved by Congress to assist with recovery work after the hurricane.
According to the letter addressed to the Fiscal Agency & Financial Advisory Authority, the government must have specific cash flow to receive the loan. The letter, dated Jan. 9, stated that the cash balance was more than $1.7 billion in December. The legislation’s statement of motives indicates that it is “reasonable and necessary to authorize the Government to provide emergency assistance to certain public corporations to ensure the continuity of essential services,” even if they do not have access to federal funding or funding is delayed.
“This auxiliary measure will maintain the operation of the Government and its corporations during the emergency period while the legal structure is established with the [U.S.]l Treasury to access federal funds approved by the United States Congress,” the legislative proposal reads.
On Tuesday, Gov. Ricardo Rosselló announced that Prepa was forced to reduce its operations at the Aguirre and Cambalache powerplants to “save fuel,” due to the “precarious” situation the public corporation faces, and could run out of cash in February.
The situation “raises the flag on the need for this public corporation to have access, as soon as possible, to the loans we have proposed and that would give it liquidity to continue its operations,” the governor said, stressing the urgency of preventing the “operational collapse of PREPA.”