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Prepa Postpones Presentation of Rate Case Until May 13

By on April 29, 2016

SAN JUAN – The Puerto Rico Electric Power Authority (Prepa) announced Friday that it will submit its rate petition to the Energy Commission (PREC) on May 13 and close its $111 million relending bond purchase May 12.

prepa billPrepa was slated to submit its basic utility rate modification request Friday. Earlier this month, the utility submitted a request to PREC, seeking to establish a separate transition charge on the utility rates that would be used for the securitization of bonds that will be used to restructure its $9 billion debt.

The utility had said it was going to issue 2016A bonds on April 27 and 2016B bonds on May 2 totaling $111 million if conditions specified in the bond purchase agreement (BPA) dated Jan. 27 were met.    

The publicly owned power provider announced it had amended its previously announced restructuring support agreement with the Ad Hoc Group of Prepa bondholders, its fuel line lenders, the monoline insurers and the Government Development Bank for Puerto Rico.

The proposed transition charge has been in the spotlight recently as it is slated to result in an increase in the electricity bills paid by consumers, stirring much public concern.

PDP gubernatorial candidate David Bernier

PDP gubernatorial candidate David Bernier

“My appeal to the Board of Directors of the Electric Power Authority [Prepa] and its executive director is to exercise their good judgement and avoid such a heavy burden for users. It is what is reasonable and fair,” Popular Democratic Party gubernatorial candidate David Bernier said.

“I recognize the need to direct the restructuring of Prepa to restore the fiscal health of that public corporation with the purpose of directing it toward an energy policy that it is consonant with the objective of reducing every day the dependence on oil and move toward a system that prioritizes the use of renewable energy, lowering costs for residential and commercial customers,” he added

“The proposed temporary rate has nothing to do with this restructuring nor with this priority objective in public policy. It is an excessively burdensome increase for customers,” Bernier said. New Progressive Party gubernatorial hopeful Ricky Rosselló also expressed Friday his opposition to the proposed electric rate increase.

NPP gubernatorial hopeful Ricardo Rosselló

NPP gubernatorial hopeful Ricardo Rosselló

“One of the factors that negatively affect our economic competitiveness is the high cost of electricity. Puerto Rico is one of the jurisdictions that pays most for power consumption. If we want to boost the economy by creating an optimal investment climate for job creation, we need to lower the cost of electricity, not increase it,” Rosselló said in a statement Friday.

He alluded to his “Plan for Puerto Rico,” which he proposed as part of his campaign when noting he “has contemplated many ideas submitted by experts to meet the energy situation. This has enabled us to discern and develop a new energy model based on balanced diversification, and administrative and operational efficiency.”

“Increasing the rate to maintain an inefficient system, at the expense of people’s pockets is a poor economic strategy,” the candidate said.

He suggested that were he to win the primaries and subsequently the election, “the development of two powerplants that run on natural gas will help ease the burden of energy costs. To do this, we will apply our Public-Private Participatory Partnerships model, integrating the investment of external capital with the interests of employees and customers.”

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