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New Puerto Rico electric utility chief’s track record includes rate hikes

By on March 21, 2018

SAN JUAN – The new executive director and chief executive officer of the Puerto Rico Electric Power Authority (Prepa), Walter Higgins, has a history of advocating for increases in energy rates, according to stateside reports.

In 2003, Higgins confronted the Nevada Public Service Commission to obtain $195 million in increases to pay for fuel and energy expenses incurred during the previous year. In 2002, Sierra Pacific Resources, where Higgins was CEO, requested $922 million in increases to recover the previous year’s electricity expenses, a request that had to be appealed.

In 2004, Sierra Pacific Resources requested an increase of $95 million that included a staggered increase of 14% for irrigation, which angered farmers, with one complaining that while the energy rates were being increased, Higgins’ salary rose to more than $1.5 million.

U.S. executive appointed to head Puerto Rico power company

As the CEO of Ascendant Group and its Belco subsidiary in Bermuda, Higgins, who retired in 2016, requested an increase in the residential electricity rate by 7% as well as a 15% hike for the commercial rate.

Higgins was appointed executive director of Prepa and will also be its main CEO, a newly created position at one of the largest power utilities in the U.S. He will be paid $450,000 even though Prepa is in the process of bankruptcy with liabilities of $14 billion, including $9 billion in bondholder debt.

Gov. Ricardo Rosselló and Walter Higgins III (Courtesy)

On Wednesday, Gov. Ricardo Rosselló asked Prepa’s governing board to justify the salary offered to Higgins, one of several officials who have been brought from the U.S. mainland by the current administration to manage local agencies.

“Part of my responsibility and commitment is to oversee that Prepa be an efficient corporation. In the past, we saw how tens of millions were invested in a restructuring officer [Lisa Donahue] that did not have positive results. This, I assure you, will not be the case,” the governor said in a statement.

Higgins arrives at a time when the Legislature is evaluating a bill to sell Prepa’s assets.

“Prepa in bankruptcy process and the largest salary in its history being approved. [It is] Part of the change that the government wants to push on us with privatization,” the Irrigation & Electrical Workers Union (UTIER) tweeted in reaction to Higgins’ appointment.

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