PREB approves 19.2 percent reduction in electricity rates for June
Prepa-requested cut due to March oil price drop, governor says
SAN JUAN – Gov. Wanda Vázquez Garced announced Saturday that the Puerto Rico Energy Bureau (PREB) approved a 19.2 percent decrease in electricity bills that will go into effect starting next month.
After the Puerto Rico Electric Power Authority (Prepa) submitted a report on spending and savings at the public utility in the last quarter, PREB issued resolution and order MI-2020-0001, which sanctions a reduction of 4.1337 cents per kilowatt hour in electricity bills—from the current 21.59 cents per kilowatt hour to 17.46 cents per kilowatt hour—during the month of June, the governor said in a press release, noting that the reduced rate will take effect as soon as Monday, June 1.
The announced decrease in electricity rates would cut Prepa bills by about 19.15 percent.
Last week, Prepa Executive Director José Ortiz said he expected electricity bills to decrease, attributing the cheaper power to a drop in petroleum prices in March, when the barrel of crude oil plunged nearly 30 percent, to below $20, as demand dried up due to the Covid-19 epidemic crisis and a price war between Saudi Arabia and Russia. He also noted that utility customers could also see further savings after July with a recently renegotiated contract with the privately run 500-megawatt (MW) Ecoeléctrica natural gas-fired powerplant in Peñuelas.
“After the fall in oil prices as a consequence of the Covid-19 pandemic, I ordered [Ortiz] to take all the necessary steps so that any savings that the public corporation had on a monthly basis, would translate into savings for our people,” Vázquez said in a statement. “In compliance with the aforementioned, [Prepa] presented [PREB] a request for adjustments to the Fuel Purchase Adjustment Clause and the Energy Purchase Adjustment Clause to achieve a rate reduction.”
The governor said that, for example, a nonsubsidized residential customer who consumes 450 kilowatt hours of electricity a month will see a reduction of $18.60 in his June bill – falling from $97.18 to $78.58. Similarly, she said, a nonsubsidized residential customer who consumes 1,200 kilowatt hours per month will see a $49.60 decrease in his June bill – dropping from $259.16 to $209.56.
Vázquez said that the decision by PREB, which is a component of the Public Service Regulatory Board (JRSP by its Spanish initials), will generate a positive economic impact on the economy of Puerto Rico worth an estimated $55 million during the month of June.
“I thank the president and the associate commissioners of [PREB], whom our administration has recognized not only for fulfilling their ministerial duty to evaluate Prepa’s proposals and plans fairly, but also for going the extra mile to identify factors that would allow even greater relief for customers,” the governor said. “I trust that in subsequent months similar reductions will be evaluated for the benefit of the people.”
Created in 2014, PREB establishes energy policy and monitors Prepa rates, operations and services to customers.