Prepa Revitalization Act to Lead to Higher Power Rates
SAN JUAN – The Senate revealed Tuesday its final version of the Puerto Rico Electric Power (Prepa) Authority Revitalization Act, which makes way for the utility’s Restructuring Support Agreement with a majority of its bondholders. The legislation creates a separate corporation that will issue so-called restructuring bonds that will be exchanged for the current Prepa bonds.
Once the bill becomes law, a 180-day process begins to revise the utility’s current rate structure through public hearings with the Energy Commission. The rate will include charges for fuel and a transition charge that will be used to pay for the restructuring.
Prepa customers who fall behind in their payments to the utility will not be reported to the credit bureaus. However, the utility will verify the credit of new customers. If the consumer has poor credit, Prepa will be allowed to impose certain deposits and fines to ensure payment. The legislation creates a new Prepa bill that will list each charge separately, including what the consumer pays for contribution in lieu of taxes and subsidies (CELI by its Spanish acronym).
The legislation also creates a new CELI structure with the island’s 78 municipalities. Each city will have a maximum amount of electricity it will be allowed to use based on the average use of power in the three previous years. Each town will be required to reduce its consumption by 15% over the next three years. If the city exceeds its power usage by the maximum amount, it will have to pay for that excess to Prepa.
The legislation also replaces Prepa’s current board with nine new members, three of which will represent consumers. However, the number of members will be reduced to seven, and include two consumer representatives.
The legislation is slated to go to a vote Wednesday.