Monday, September 24, 2018

Puerto Rico energy regulator announces hearings over new utility rates

By on May 9, 2018

SAN JUAN – The Puerto Rico Energy Commission (PREC) announced Wednesday the start of hearings to set new power rates at the Puerto Rico Electric Power Authority (Prepa).

The hearings will be held just weeks before the regulator’s interim chairman, José Román, is expected to leave. La Fortaleza has already appointed a new chairman, Edison Avilés, who has yet to be confirmed.

In January 2017,  PREC issued an order setting new rates that were slated to go into effect in fiscal year 2017. The rate order established procedures for determining rates applicable to fiscal 2018 as well as procedures for subsequent three-year rate cases and one-year budget examinations.

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“The 2017 hurricanes have drastically affected Prepa’s costs, revenues and expectations of future sales, making it unlikely that the rates in effect today satisfy the statutory just and reasonable standard. The commission, therefore, initiates this proceeding to set new rates for the period starting July 1, 2018 to June 30, 2019,” PREC said.

The hearings also come after the island’s Financial Oversight and Management Board expressed in the fiscal plan for the government its intent to do a conduct an integrated resource plan that should be ready by October with its own input rather than PREC handling the process.

During the Puerto Rico Grid Revitalization and Investment Forum that took place Tuesday and Wednesday, Román said that while the fiscal board has the power to make fiscal determinations about Prepa, it is the commission that makes policy decisions.

Puerto Rico Energy Commission interim Chairman José Román (CyberNews photo)

The regulator took the fiscal board to court to try to define each entity’s authority, but Judge Laura Taylor Swain declared herself without jurisdiction to decide because she said PREC was seeking a legal opinion. PREC withdrew its suit.

“The action of exceeding its authority has confused Prepa and now they don’t know which agency to respond to,” Román said.

Regarding Román’s departure May 27, the executive director of the Institute for Competitiveness and Sustainable Economy, Tomas Torres, said he hopes the government takes the opportunity to transcend partisan politics. The government is thought to be seeking to create another energy regulator.

“The commission needs experts with experience in regulation who transcend the traditional political partisan focus,” he said.

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