Documents: New proposed debt adjustment plan for PREPA may add charges to power bill
By The Star Staff
As the Financial Oversight and Management Board is expected to present a debt adjustment plan for the Puerto Rico Electric Power Authority (PREPA) today, confidential documents posted to the markets show details of some of the charges that may result from the proposed deal.
The oversight board proposed to PREPA fuel line lenders, which are owed over $700 million, that the volumetric charge that would be added to electricity bills be applied to the first 500 kilowatt-hours (kWh) consumed by each customer.
“Classes will have a volumetric charge applied to the first 500kWh they use and a separate charge for energy consumption above 500kWh; in many cases, the volumetric charge is the same,” a presentation containing confidential information exchanged with fuel line lenders, and disclosed Tuesday by PREPA in a filing to the municipal markets, shows.
In addition to the volumetric charge, certain customer classes may be subject to a monthly fixed charge depending on whether the customer is a residential, commercial or industrial client, which will help ensure revenues in the event demand for energy goes down.
The oversight board announced on Dec. 1 that it had reached an agreement with holders of fuel line loans to PREPA. The agreement would reduce the fuel line lenders’ claim by 16% through newly issued PREPA bonds upon the effective date of a plan of adjustment.
Also this week, the U.S. Supreme Court gave the oversight board until February 2023 to answer a petition from the government in which it argues that the board has gone beyond its role in stopping laws enacted by the commonwealth and is preventing it from governing.
The Puerto Rico Fiscal Agency and Financial Advisory Authority filed a writ of certiorari on Nov. 18 asking the top court to overturn a lower court ruling giving the oversight board the power to override laws enacted by the commonwealth that go against fiscal plans.