PREC Approves Transition Charge for Prepa Customers
SAN JUAN – The Puerto Rico Energy Commission approved Tuesday night a transition charge and adjustment mechanism that the Puerto Rico Electric Power Authority Revitalization Corp. had proposed to pay for the utility’s securitized debt.
The transition costs will cover only 70% of the utility’s more than $9 billion debt, but customers will still have to pay for debt not covered in the debt restructuring agreement.
The PREC acknowledged that there will be confusion because it is approving the Transition Charge at the same time. Prepa has a separate petition seeking to increase its base rates, which have not been raised since 1989. “Prepa customers could experience an increase in their base rates at the same time they see the new Transition Charge on their bills,” the entity said.
The commission’s ruling follows several technical hearings and requests for clarification.
After its initial petition, filed in April, the Revitalization Corporation submitted a revised transition charge for residential customers based on energy usage history instead of a per servicing agreement charge. The modified petition imposed a transition charge on the net usage of “grandfathered” customers who have or are eligible to enter into net-metering agreements that satisfy the requirements of the Revitalization Act.
The corporation projects the initial Transition Charge to be 3.10 cents per kilowatt-hour (kWh). It will apply to the gross kWh consumption of all Prepa customers, with two exceptions. For fixed block public housing customers, the transition charge will apply only to kWh consumption exceeding the applicable consumption based block of power usage.
For grandfather net-metering customers, the transition charge will apply only to their net-metering consumption. Non-grandfathered customers will pay a transition charge calculated and adjusted based on gross usage.
Grandfathered net-metered customers are those (whether residential, non-residential or governmental, as specified) who had a net-metering agreement with Prepa as of Feb. 16, when the Revitalization Act came into effect. Any customer who increases the capacity of their renewable energy system up to a 20% cap, as provided in the Revitalization Act, will cease to be considered a grandfathered net-metered customer the moment the increase in capacity to Prepa’s system was completed.