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Puerto Rico fiscal board appoints ‘chief transformation officer’ at power utility

By on October 25, 2017

Revitalization Coordinator Noel Zamot  (Juan J. Rodríguez/CB)

By Philipe Schoene Roura & Luis J. Valentín Ortiz

SAN JUAN — Puerto Rico’s financial control board announced Wednesday its “intent to appoint” Noel Zamot as “chief transformation officer” for the Electric Power Authority (Prepa), as first reported by Caribbean Business.

More than one month after a wind beast named Maria rode roughshod over Puerto Rico, a $300 million contract with Whitefish Energy, a Montana-based firm with a two-person front and meager track record, became the catalyst to appoint Promesa’s revitalization coordinator as emergency manager for the island’s power utility.

“The appointment of Noel is an essential step in achieving the goals of reliable, competitively priced electricity and attracting the private capital we need to revitalize the economy of Puerto Rico,” said Natalie Jaresko, executive director of the board. Zamot’s first task is to oversee the recovery of the island’s power grid amid the devastation left by Hurricane Maria.

At least two sources told Caribbean Business that members of the commonwealth’s financial control board briefed Republican and Democrat members of the U.S. Senate in separate meetings early Wednesday afternoon on the languid and disorganized reconstruction efforts being spearheaded by Prepa and the board’s efforts to have Zamot take over the utility’s reigns. The Wall Street Journal first reported the intent of the board to appoint an emergency manager for Prepa.

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“They held the briefings to essentially inform leadership on both sides of the aisle of the course they intend to pursue in naming Revitalization Coordinator Noel Zamot to become an emergency manager for Prepa,” one source with ties to the GOP on the Hill said.

“They also requested immediate support from all federal agencies to send experts to work with Zamot. He is going to be in charge of whatever has to do with Prepa. The U.S. government will provide expertise as the board deems necessary,” the source added.

On July 27, the board announced the appointment of Zamot—a Puerto Rican who is an expert in aerospace and defense infrastructure with more than 25 years’ experience—as revitalization coordinator under Title V of the federal Promesa law. The latter provides an expedited permitting process, both locally and federal, for those infrastructure projects that are certified as critical by the board.

“The authority to name an emergency manager for Prepa is being invoked under Promesa,” the Capitol source affirmed. “Congress is pressuring the board to take action to stem the tide of preventable deaths occurring because of the crippled grid.”

Members of the oversight board already briefed the chairman of the House Natural Resources Committee, Rob Bishop (R-Utah), who expressed “the wish that the board had done this sooner,” another source said. Congress will reportedly be taking a more active oversight role with the first action coming in the visit of Bishop to Puerto Rico later this week.

Prepa is currently under a court-ordered, debt-restructuring process pursuant to Title III of Promesa. To that end, Jaresko stated it is “common practice” to appoint a “chief restructuring officer to effectively manage the entity while it is in bankruptcy.”

Revitalization Coordinator Noel Zamot and fiscal board Executive Director Natalie Jaresko (Jaime Rivera/CB)

A group of Prepa creditors recently sought to have federal Judge Laura Taylor Swain —who oversees Puerto Rico’s bankruptcy cases under Title III— allow them to pursue the appointment of a receiver at the utility. Judge Swain denied the action amid fierce opposition from both the commonwealth government and the fiscal control board.

“As the representative of Prepa under Title III of Promesa, the board believes the successful exit of Prepa from Title III requires adapting the pre-hurricane transformation plans with ongoing federal reconstruction efforts,” Jaresko stated.

 

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