The San Juan Daily Star
Bondholders group releases data it says shows errors that sully PREPA debt deal mediation

By The Star Staff
The Ad Hoc Group of Puerto Rico Electric Power Authority Bondholders, which holds a majority of some $8.3 billion in outstanding bonds issued by utility, released information last week from the mediation over the island power utility’s debt restructuring plan that the Financial Oversight and Management Board did not want to disclose.
Pursuant to the terms of its nondisclosure agreement, the Ad Hoc Group made certain materials public that it noted show errors in management consulting firm McKinsey & Company’s calculations.
The first is titled Analysis Group Presentation on the Share of Wallet Analysis, which is focused on errors made in McKinsey’s share of wallet analysis at PREPA. The bondholders noted that McKinsey compared average household consumption with median household income.
“Average consumption is inflated by the higher electricity consumption of households earning more than the median level of income,” the Ad Hoc Group noted. “A household earning a median income consumes less electricity than households in higher income cohorts.”
It noted that McKinsey’s calculation incorrectly uses an “Average Monthly Bill,” which overstates electricity consumption of the median income-earning household.
The other report, titled Analysis Group Presentation on the Share of Wallet Analysis, focused on households earning $10,000 to $20,000 per year.
The share of wallet analysis is used to calculate how much a consumer spends on a specific brand and in the case of PREPA, it helps calculate revenues.
Separately, U.S. District Judge Laura Taylor Swain appears to be exerting pressure to move the utility’s bankruptcy closer to a final resolution.
The Financial Oversight and Management Board late last week submitted the latest adjustment plan to restructure PREPA’s $10 billion debt. PREPA has been in bankruptcy since 2017.
The judge, who is overseeing Puerto Rico’s Title III bankruptcy cases, advised PREPA stakeholders on Monday that she plans to hold a hearing to determine the adequacy of information in the disclosure statement for the utility’s debt adjustment plan by Feb. 28. She will give the parties a Feb. 3 deadline to object to the disclosure statement and a Feb. 10 deadline to file replies.
She overruled an objection from the Ad Hoc Group of PREPA Bondholders, who hold about $8 billion in claims against PREPA, to the proposed briefing schedule.
Meanwhile, PREPA is holding a public meeting in Fajardo today to answer the public’s questions about the utility.