Ex-fiscal board member calls for privatization of PREPA

Former Financial Oversight and Management Board member Justin Peterson

By The Star Staff

President Donald Trump’s plan for the Puerto Rico Electric Power Authority (PREPA) should entail the utility’s privatization and allowing exploration and drilling for offshore oil, former Financial Oversight and Management Board member Justin Peterson says.

Earlier this month, the Trump administration terminated five members of the oversight board created by Congress in 2016 to facilitate the restructuring of the island’s mountain of debt and help the island government institute financial reforms.

“As a former member of the FOMB [oversight board] who was appointed by President Trump in his first Administration, I applaud the President’s actions to rescue Puerto Rico from a Board that has presided over the disintegration of the island’s electrical grid and that has failed in its most basic duties to the people of Puerto Rico,” Peterson said in column published by the Daily Caller.

Peterson, who criticized the oversight for “keeping PREPA in bankruptcy,” referring to the board’s insistence on the public utility not paying $12 billion in debt, including interest, described five steps to make Puerto Rico “great again.”

“End PREPA’s bankruptcy,” he said. “This can be done swiftly by reaching a consensual deal with creditors who have reached numerous agreements in the past only to have the FOMB walk away from the negotiating table. A restructuring which treats all parties fairly and does not place an undue burden on ratepayers can be obtained through a combination of sources, including a contingent value instrument (CVI) and Commonwealth funds.”

Peterson also said Puerto Rico’s electrical grid must be privatized and rebuilt by qualified operators as a second step.

“The world class energy infrastructure we build for Puerto Rico should be powered by American natural gas and nuclear (SMRs), not by green hype or solar panels which will be blown away in the next hurricane,” he said.

Bring back pharmaceutical manufacturing to Puerto Rico, the ex-fiscal board member said regarding step 3.

“President Trump’s leadership to re-balance global trade and to re-shore U.S. manufacturing is key to this, along with creating a reliable energy infrastructure,” Peterson said.

Permit exploration and drilling for offshore oil and natural gas, with future royalties from production to be shared by the federal government and Puerto Rico, would be the fourth step, he said.

For the fifth and final step, Peterson said: “Terminate the FOMB following a successful restructuring of PREPA, which is the only restructuring left to complete.”

“Congress never intended the FOMB to be permanent, and billions of taxpayer funds are being wasted,” he said. “Puerto Rico should be governed by its elected leaders.”