Proposals for Puerto Rico power company concessions expected to be revealed in 1st quarter
SAN JUAN – In hearing held Tuesday by the Puerto Rico House Committee on Economic Development, Planning, Telecommunications, Public-Private Partnerships and Energy, Christian Sobrino Vega, the executive director of the Fiscal Agency & Financial Advisory Authority (AAFAF by its Spanish acronym) said the proposals for the transmission and distribution of the Electric Power Authority (Prepa) will be available in the first quarter of next year.
His statement came after testimony over House Resolution 1030, authored by the committee’s chairman Rep. Victor Parés Otero, which seeks to examine compliance with Act 120, known as the “Law to Transform the Puerto Rico Electric System.”
In a written statement, Sobrino Vega said the island’s energy sector “is going through a process in which the variables change constantly,” including federal disaster recovery and mitigation funds, and future negotiations in the privatization of the public power corporation.
Regarding the restructuring of the utility’s debt, Sobrino said it is “estimated that the terms of the preliminary agreement will achieve more than $3 billion in savings in debt service payments during the next 20 years.”
The administrator of Prepa’s Restructuring Office, Fernando Padilla, said that “we are collaborating to carry out the market study and requests for information processes so we can obtain the information that allows carrying out a robust analysis that supports the transactions of the priority projects promoted by this legislation.”
Parés Otero inquired about the utility’s projected revenue for this fiscal year, to which Padilla replied $3.2 billion. In addition, he announced that, in “the past three months, we have been, on average, at approximately $300 million…. Basically, we are really close to the projection.” To which the director of AAFAF argued that the projections reflect that the energy sector is “good business” for Puerto Rico.
“What we’re looking for is that there be transparency in the process and that, in the end, we have an electrical system in Puerto Rico that is resilient, robust and that the kilowatt-hour cost, which is the most important for residential, commercial and industrial customers, be a competitive one,” Parés Otero said, adding that the regulatory framework for the sale of Prepa’s generation is expected to be passed during the current legislative session.