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Sen. Seilhamer: Power Bill Hike with Bill’s Passage to only Benefit Creditors

By on February 11, 2016

SAN JUAN – New Progressive Party (NPP) Sen. Harry Seilhamer denounced Thursday that Senate Bill 1523 to restructure the debt of the Puerto Rico Electric Power Authority (Prepa) will represent an increase to the electric bill and is not balanced, since creditors are protected and the risk is assumed by residential, commercial and industrial customers, he said.

“The consequence of this bill is the impending power rate hike; precisely the securitization chapter imposes an increase to the rate, which will lead to the collapse of our economy,” Seilhamer said.

He added that “payment of the new issuance is guaranteed by the increase in the bills of Prepa’s customers for the next 35 years.”

The senator also said the risk is for the people, not the investors since the the legislative minority’s participation was not included.

“It is the residential, commercial and industrial customers who will take the brunt. I must warn that both the structured rate as well as the securitization will come into effect, according to calculations of the provisions in the bill, after the general elections in November,” the legislator said.

He also denounced that for the analysis of such a complex measure, “the legislative majority of the Popular Democratic Party only held one public hearing, and the minority was not considered at the meetings to work on amendments and evaluate the measure.”

Likewise, he said the bill sets a negative precedent for future negotiations with Puerto Rico creditors. “The governor’s economic team is negotiating with Cofina [Spanish acronym for Sales Tax Financing Corp.] bondholders and those with constitutional protections debt cut of 30 percent to 40 percent. However, this bill provides a cut of only 15 percent of the debt to Prepa’s creditors.”

The Senate’s NPP spokesman said the measure also includes a board whose members are selected by a private company.

“The governor will have to select six people from a list given by that private firm. We do not know who answers to that company, and this definitely takes constitutional powers away from the executive and legislative branches, because it usurps exercising the power to appoint, and advise and consent that the governor and the Legislature have,” he said.

Finally, Seilhamer warned that “at a time when public employee entitlements are cut by Act 66, compensation that is not established in the bill, much less whether it will be capped, is being legislated. In times of economic crisis, this is a nefarious measure that will represent a serious blow to the people.”

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