Monday, June 24, 2019

Prepa Expected to Submit Alternative Proposal to Transition Charge

By on June 6, 2016

SAN JUAN – The Puerto Rico Electric Power Authority Revitalization Corp. is slated to submit to the Puerto Rico Energy Commission (PREC) an alternative proposal for the rate design of its transition charge, which will be used to pay for the utility’s securitized debt, Caribbean Business has learned.

According to a PREC resolution, the content of the proposal will be the subject of a conference call slated for June 9 in which the utility will have the opportunity to get recommendations. As a result, the PREC gave the Revitalization Corp. and all interventors until June 10 to submit their final briefs on the transition charge for the PREC’s review.

Prepa headquarters in San Juan (CB photo/Eduardo San Miguel Tió)

Prepa headquarters in San Juan (CB photo/Eduardo San Miguel Tió)

Prepa restructuring officials filed the rate transition case and the supporting materials before the PREC in April. The transition charge is slated to be used to pay for the utility’s securitization.

As it is right now, the estimated transition charge per residential customer is $11.98, or 12.1% of 2015 monthly revenues, while the estimated charge per kilowatt-hour (kWh) for non-residential customers is $.03055, or 11.6% of average revenue per kWh. The charge will be adjusted every three months, and during the next two years will fluctuate, reaching 4.2 cents per kWh in 2018, according to the Revitalization Corp.’s “Verified Petition for Restructuring Order.”

During technical hearings held in late May, the PREC, its advisers and other interventors suggested modifications to the transition charge rate design. The charge has been criticized by business groups that claim it could increase rates by 20%.

The PREC is also evaluating a new energy rate structure recently submitted by Prepa.

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