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Puerto Rico Senate passes resolution to provide liquidity to water, power utilities

By on January 26, 2018

SAN JUAN – The Senate unanimously approved Thursday a resolution authorizing the Treasury Department until June 30 to grant loans and disbursements to Puerto Rico’s Electric Power (Prepa) and Aqueduct & Sewer (Prasa) authorities to cover operating expenses as well as work related to repairs of damages from hurricanes Irma and Maria.

Senate Joint Resolution 196, authored by the upper chamber’s president, Sen. Thomas Rivera Schatz, will prevent the public corporations from becoming insolvent as of February, as Gov. Ricardo Rosselló had warned when he requested Senate Bill 806 be addressed.

That measure, introduced by his administration, was left for “future discussion” and the joint resolution for consideration by the House was approved instead.

In the debate on the measure, Rivera Schatz asked the governor to pressure agency executives to pay the $212 million owed to Prepa. He added that federal agencies in Puerto Rico also owe large amounts of money to the public corporation.

Measure to provide liquidity to Puerto Rico power utility left for ‘future discussion’

“I’m going to ask the governor, in the same spirit that he asked us to address [the liquidity issue], to tell his agency heads to pay [Prepa’s] bill. This Legislative Assembly approved a budget that contained resources to cover the cost of energy and drinking water, and some heads of agencies do not want to pay, or are not paying as often, and with the due diligence. That is in the hands of our governor,” Rivera Schatz said.

With the approval of the joint resolution, Prepa could receive up to $550 million, while Prasa could receive $80 million. The money must be used to cover operational expenses, including payroll and the purchase of fuel, materials and needed equipment. In addition, it is to be used to pay for services rendered by contracted entities for maintenance and repairs.

Veto override

SB 745 was approved with 25 votes in favor, which overrides the governor’s veto of the measure. The bill amends the Municipal Financing Act of 1996 and the Municipal Revenue Collection Center (CRIM by its Spanish acronym) law to make municipalities’ use of the excess funds more flexible, beyond what is required for the Municipal Public Debt Redemption Fund.

The measure was sent to the House for consideration and, if approved, would become law.

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