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Puerto Rico energy regulator testifies at hearing over utility’s privatization

By on April 5, 2018

SAN JUAN – Public hearings over the privatization of the Puerto Rico Electric Power Authority (AEE) that the Senate Special Committee on Energy Affairs is holding began Wednesday with the appearance of the Puerto Rico Energy Commission’s (PREC) interim president, who underlined the importance of the regulatory agency’s participation in the transformation of the island’s energy sector.

PREC chief José Román asked the committee presiding over Senate Bill 860’s hearings to allow the regulator to be directly involved in the transformation of Puerto Rico’s electric power system.

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

“What we are requesting is that PREC be allowed to do its job and duty as a regulator throughout the entire process. If the regulator is removed, as a specialized entity, it cannot be guaranteed that the result will be beneficial for the people. The objective of this process must be to provide the people of Puerto Rico with the best energy product, in the most efficient way and with the best performance,” the official said.

Román explained the main role of the commission as an independent government entity in charge of regulating, supervising and ensuring compliance with the government’s energy policy.

Hearings to privatize Puerto Rico power company begin

He also said the purpose of regulation is to oblige the best performance from entities, producing benefits of public interest.

“Regulation must produce results comparable to those that would be produced effective competition: reasonable costs and high-quality services. The objective is the same no matter if you are regulating a monopolistic provider or if you are forging competitive markets,” he said.

Román said that just as in all jurisdictions around the world, the regulator is in charge of carrying out rate reviews, the orderly planning of resources and the transformation or restructuring of the energy system.

PREC is the entity responsible for making decisions about the island’s energy market, or the performance of the Puerto Rico Electric Power Authority (Prepa) and other providers of power generation and electrical services.

The official’s testimony included several concerns regarding provisions of S.B. 860 and in which he proposes excluding PREC from the initial negotiation phase with private entities.

Among the most relevant points discussed during the hearing was the environment for creating abusive rates, a disorderly transition, balancing the sale with the modernization of the grid, and the market structure.

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As final observations, PREC recommended that the Senate’s Special Energy Commission follow an orderly process to produce the best performance in the restructuring of the energy system.

Public hearings to discuss House Bill 1481 began Wednesday in the lower chamber. The measure to establish the legal parameters to create a public-private partnership with Prepa, privatize and open the energy market on the island, began with the testimony of the public utility’s deputy director, Justo González.

Justice Secretary Wanda Vázquez, and officials representing the Government Development Bank, the Fiscal Agency and Financial Advisory Authority, and the Public-Private Partnerships Authority also testified in Wednesday’s House hearing and praised the legislation’s viability.

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